Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: So let's stick with the consumer as focus shifts toward
Speaker 2: the new year. Data telseia with Telsey Advisory Group writing
Speaker 2: heading into twenty twenty six, we expect events, hire, reef,
Speaker 2: tax refunds, and more accommodative interest rates to drive a
Speaker 2: continued recovery and discretionary spending, especially among younger consumers. Data
Speaker 2: joins us now in person, thank you so.
Speaker 1: Much for being here, Thank you for having me.
Speaker 2: It's wonderful to get your insights as we all look
Speaker 2: at our gifts from the holidays, decide which ones we
Speaker 2: need to return. What's to read on how well this
Speaker 2: season really did perform for retailers broadly across the sphere.
Speaker 1: I think holiday season was solid. I think those increases
Speaker 1: three point nine four point two percent very much in
Speaker 1: line with expectations. These ten days after Christmas are very
Speaker 1: important too, whether for returns, for gift card redemptions, all
Speaker 1: very important to see what it looks like. But the
Speaker 1: product newness drove to demand, and with the case shaped
Speaker 1: economy that we have, you're definitely seeing at the higher
Speaker 1: end and the lower end looking for value. And that's
Speaker 1: where you saw some of the traffic, whether it's the Walmart's,
Speaker 1: whether it's the Tjx's. They were there the last ten
Speaker 1: days before Christmas, as always, is where you got the
Speaker 1: real bump up in terms of top line.
Speaker 3: I'm fascinated by the bifurcation between Walmart and Target because
Speaker 3: I had seen them previously in kind of the same box.
Speaker 3: But Walmart has done so well this year and Target
Speaker 3: has disappointed.
Speaker 2: Why.
Speaker 1: I think overall what you've seen from Walmart and Target
Speaker 1: store standards have fallen. You haven't seen the same innovation
Speaker 1: and product newness. You haven't seen the same forward momentum
Speaker 1: of movement, particularly with technology, where Walmart is anticipating what
Speaker 1: the customer needs and they really have modernized their whole
Speaker 1: store format. The Walmart of today is not the Walmart
Speaker 1: of five or even ten years ago.
Speaker 3: If we see a CA shaped toomy, do we get
Speaker 3: Dollar Tree? You know these family dollar kind of discount
Speaker 3: stores doing well, because if I look at the stock performance,
Speaker 3: I don't see Dollar Tree taking off.
Speaker 1: I think overall you will see those dollar stores perform.
Speaker 1: Keep in mind that in twenty twenty five, the focus
Speaker 1: on tariffs who imports goods from China was impactful certainly
Speaker 1: to the dollar stores, and now lapping tariffs should be
Speaker 1: a benefit to them over time. Who you saw is
Speaker 1: share gainers. It was all the off pricers, I mean,
Speaker 1: whether it was Burlington Ross Stores or TJ Max. With
Speaker 1: the diversification of the assortment that they had, they captured customers.
Speaker 2: What's fascinating to me is you're talking about how this
Speaker 2: was a solid holiday season, and yet we're talking about
Speaker 2: a bankruptcy potentially at the end of this month of
Speaker 2: one of the biggest retailers, of saxopith Avenue, which faces
Speaker 2: more than one hundred billion dollars of a debt payment.
Speaker 2: A lot of people are wondering whether that will actually happen.
Speaker 2: Can you square this story the idea that we're talking
Speaker 2: about robust sales, a steady consumer I'll be a picky
Speaker 2: or choosier or whatever you want to say, at the
Speaker 2: same time that we could see a bankruptcy of one
Speaker 2: of the biggest retailers out there.
Speaker 1: Well, when you think of who's gaining share from that,
Speaker 1: you look at the new brands that both Bloomingdale's and
Speaker 1: Nordstrom are putting on their shelves, stocking in their stores,
Speaker 1: they're gaining share. Just across the street on fifty ninth Street,
Speaker 1: Bloomingdale's just opened a new extension to their fourth floor
Speaker 1: with newer brands, whether it's Victoria Beckham, whether it's Valentino Totem.
Speaker 1: They have a whole new assortment of goods out there that, frankly,
Speaker 1: perhaps if not for this change, you would not see
Speaker 1: those brands in Bloomingdale's, and you're seeing it in Bloomingdale's
Speaker 1: and a Nordstrom.
Speaker 2: How much is this a pattern that you expect to
Speaker 2: be repeated, that we're going to see wholesale bankruptcies of
Speaker 2: some retailers that are not keeping up with a new product,
Speaker 2: while others I'm thinking of Walmart or I'm thinking of
Speaker 2: Bloomingdale's continue to gain share. Sort of the big get
Speaker 2: bigger can invest in technology, and you see wholesale bankruptcies.
Speaker 2: On the other.
Speaker 1: Side, financial leverage is very important in order to keep
Speaker 1: the operations of a retailer running smoothly. You get into
Speaker 1: trouble with financial leverage, that's an issue. It always takes
Speaker 1: a lot to kill a retailer. They don't just die overnight.
Speaker 1: Take a look, for example at Blockbuster from many years ago,
Speaker 1: and certainly we'll have to see what happens with that
Speaker 1: debt payment of Sacks that's coming to very shortly. But certainly,
Speaker 1: when one is weak, others can gain strength, and that's
Speaker 1: what you're seeing in Bloomingdale's. In Nordstrom, we.
Speaker 3: Talk about Bloomingdale's. Obviously it's a great store, it's an
Speaker 3: iconic department store across the street here, but it's owned
Speaker 3: by Macy's and that stock is down thirty percent this year.
Speaker 3: What's Macy's doing wrong that it's Bloomingdale's is doing right?
Speaker 1: I think overall the bold new chapter strategy that the
Speaker 1: CEO of Macy's, Tony Spring, is put in place, they're
Speaker 1: making advancements and you're seeing some change in Macy's. Also.
Speaker 1: You look this year at Macy's and what they've done
Speaker 1: where it's backstage with the off price, in their assortment,
Speaker 1: whether it's what they're doing with luxury, whether it's what
Speaker 1: they're doing with their own brands, and frankly, the store experience,
Speaker 1: the investments that they've made into the top one hundred
Speaker 1: and twenty five hundred and fifty stores is outperforming the
Speaker 1: core and I think you're going to continue to see
Speaker 1: the assessment of the footprint of Macy's continue to be
Speaker 1: architected towards their best performing stores over time.
Speaker 3: So you like Macy's. I mean, is this a buying
Speaker 3: opportunity than this dip.
Speaker 1: I think Macy's is an opportunity. I think when you
Speaker 1: think about next year and you frankly think about the
Speaker 1: enhancements that they've made to assortment, both in Macy's and Bloomingdale's.
Speaker 1: It's not expensive for where it is, and you look
Speaker 1: at the landscape of department stores that are public companies,
Speaker 1: it's Macy's, Coals, and Dillard's. Macy's has an opportunity on
Speaker 1: valuation to move higher.
Speaker 2: Dana, do you think that early next year we're going
Speaker 2: to see pretty big price increases across the board for
Speaker 2: retail goods.
Speaker 1: You're going to see more price increases coming, But keep
Speaker 1: in mind this innovation and newness that we have. You
Speaker 1: don't have a comparative, so we'll have to see what
Speaker 1: those prices look like. Consumers are cautious and discerning, but
Speaker 1: they'll buy what they don't have.
Speaker 2: Dana Telsea, wonderful, Thank you, thank you so much for
Speaker 2: being having us today. Happy New Year, Dana Telsea Telsey
Speaker 2: Advisory Group,