Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Christmas trees.
Speaker 2: Have you go?
Speaker 1: No, of course not. I buy my Christmas tree honor
Speaker 1: about my birthday, which is early one. Yes, but we've gone.
Speaker 1: I've gone both ways over the years. Because my kids
Speaker 1: were younger, they had some allergies, we would go for
Speaker 1: several years we went to fake tree. I'm kind of indifferent.
Speaker 3: Yeah, we got a bit of both. Do we got
Speaker 3: like we get one real one for the smell and
Speaker 3: one fake one for the downstairs.
Speaker 4: Right five? So let's how you do it?
Speaker 1: All right? It all works out. People have their their
Speaker 1: play there. Chris Butler joints US National Tree Company CEO
Speaker 1: joining us here, I believe from Cranford, New Jersey, which
Speaker 1: is a cool little town there. So Chris talk to
Speaker 1: us about kind of Christmas decorations. What are people doing
Speaker 1: these days? What's different today versus I don't know, ten years,
Speaker 1: fifteen years ago. It seems like people are going nuts
Speaker 1: for Christmas decorations.
Speaker 4: They are going nuts.
Speaker 2: Yeah, and I like what both of you guys you
Speaker 2: switch between the artificial and the reel. We're big fans
Speaker 2: of real as well as artificial. Obviously, eighty percent of
Speaker 2: US consumers by artificial trees, and so you know, the
Speaker 2: reel is definitely the minority. But again, obviously we're big
Speaker 2: fans of trees in general, but you know it's the
Speaker 2: the pre lit now, So trees come pre lit. Obviously,
Speaker 2: there's no mess, they're a lot cheaper, the materials are
Speaker 2: a lot better, there's a lot of functionality with the
Speaker 2: lights that you can get today, and so so that's
Speaker 2: really what we're seeing. And there's a lot of extra
Speaker 2: wreaths and garlands and things being bored as well. And
Speaker 2: I think with the Instagram generation, the show me generation,
Speaker 2: people are really now decorating to kind of show their
Speaker 2: friends and show their followers just how beautiful our homes
Speaker 2: can be. And so you know, as you said, Carolyn,
Speaker 2: they have a lot of trees in a lot of
Speaker 2: different rooms and so you know, maybe the kids have
Speaker 2: a tree now, the kitchen has a small tree putting
Speaker 2: the mantlepiece with garlands and small trees. So you know,
Speaker 2: we're seeing a lot of incremental decorating with a lot
Speaker 2: of different items and in terms of getting back.
Speaker 4: To that swell thing.
Speaker 2: So you're right, the main reason people buy a real
Speaker 2: tree is for that real Christmas smell. We bought a
Speaker 2: company called Sensicles a few years ago and they are
Speaker 2: a scented ornament which smells just like Christmas. So if
Speaker 2: you hang your scentered ornament on an artificial tree, you
Speaker 2: get that real tree.
Speaker 3: That real tree smell as well and noalergies. I'm looking
Speaker 3: at accord on to your website. First thing, holiday magic begins.
Speaker 3: Enter a week, win a gift card, Blackout Friday blowout
Speaker 3: deals up to eighty percent off. How much are you
Speaker 3: having to think about discounting how much amid perhaps fear
Speaker 3: of some that where you're getting your supplies from the
Speaker 3: costs might have to go up in the future.
Speaker 4: Yeah, that's a great question.
Speaker 2: So look, Black Friday through Cyber Monday this year obviously
Speaker 2: is one week later, so the holiday season is a
Speaker 2: week later. So I think every retail ourselves included, are
Speaker 2: really discounting to make sure that we can take it
Speaker 2: kind of capture those sales that we might have missed
Speaker 2: otherwise given the week's delay in terms of the tariffs. Look,
Speaker 2: you know, we've been on a diversification kind of trend
Speaker 2: over the last few years now anyway, trying to diversify
Speaker 2: ourselves out of just one source of manufacturing, which which
Speaker 2: would be China. You know, I think if the tariffs
Speaker 2: go through, who knows what the tariffs will be or
Speaker 2: when they will go into effect, but you know, from
Speaker 2: our standpoint, obviously it's impactful, and so we're trying to
Speaker 2: diversify a manufacturing base between now and you know, now
Speaker 2: in kind of twenty twenty six. You know, the promotional
Speaker 2: things we're doing right now really aren't in answer to that.
Speaker 2: It's really more just to kind of capture those sales
Speaker 2: for this season. But if you are a consumer and
Speaker 2: you're looking for a tree and you're thinking of buying
Speaker 2: a tree or other holiday de corps, this year is
Speaker 2: a great time to buy it, because if those tariffs
Speaker 2: go into effect, prices will definitely go up.
Speaker 4: In the next year or so.
Speaker 3: Can you give us a breakdown of sort of how
Speaker 3: much your supply chain is dependent on China?
Speaker 2: Yeah, it's very large today, so I can't give you
Speaker 2: the exact numbers, but it's very large. But we are
Speaker 2: diversifying out. We've been on this diversification journey for a
Speaker 2: few years now, and so you know, probably by the
Speaker 2: end of twenty twenty six, we could be completely out
Speaker 2: of China, which you know is a significant change.
Speaker 1: So anything particularly the hot cellar this year, Chris.
Speaker 4: Yeah, you know, so it's funny.
Speaker 2: So my wife loves the sparkly trees, the snowy trees.
Speaker 4: And many consumers love those things. But you know what we.
Speaker 2: See year after year after year is that green triangle,
Speaker 2: you know, the kind of the staid, good drink green triangle,
Speaker 2: solid materials, great lights, multi multi function lights. So you know,
Speaker 2: it's not a trend driven it's not a trend driven industry.
Speaker 2: I will say this year disco is back. So who
Speaker 2: doesn't love a bit of disco with their Christmas trees?
Speaker 2: So disco is back. Definitely seeing some sales on some
Speaker 2: of our kind of disco themed items. But again it
Speaker 2: is you know, people still do prefer that traditional green
Speaker 2: tree with either the white lights, clear lights, the multicolor
Speaker 2: or again we have the dual color functionality. So that's
Speaker 2: what we see every year.
Speaker 1: Are you white lights, Caroline? Are you a different colored?
Speaker 3: I think one of ours has multicolored, but I think
Speaker 3: in general I'm a boring person. I like a white
Speaker 3: light with only red and gold vibes going on. And
Speaker 3: then our thing is we collect Christmas decorations from any
Speaker 3: city that we go, so and then you have to
Speaker 3: remind yourself where the hell you've got some of these
Speaker 3: random items. But I'm really interested in not just about
Speaker 3: the idea of what color lights or what you're whether
Speaker 3: you're doing sparkly or disco. But you must be talking, Chris,
Speaker 3: to people in your industry that are doing the real
Speaker 3: tree situation too. How much you're going to have help
Speaker 3: this year by the fact that we're here in the Northeast,
Speaker 3: we've had terrible lack of water, We've had droughts, and
Speaker 3: the local Christmas free tree farms next to me have
Speaker 3: been struggling.
Speaker 2: Yeah, you know, it's a great question. Eighty percent of
Speaker 2: like I said, eighty percent of consumers already by artificial
Speaker 2: trees versus twenty percent of consumers buying the real trees.
Speaker 2: So it's a small market already. And yeah, unfortunately with
Speaker 2: you know, with some climate change or with some just
Speaker 2: weather in general is definitely hurting. Look Oregon a few
Speaker 2: years ago got hit. You know, there's some fungus issues
Speaker 2: in the Carolinas. So it's it's a tough business to
Speaker 2: be in making the kind of doing those real trees
Speaker 2: and look, we're here to pick up the pieces when
Speaker 2: when you know, they falter with some of their supply chain.
Speaker 1: Chris, is there any regionality in your business? Do people
Speaker 1: in the South, I don't know, spend more on their
Speaker 1: decorations per capita than the Midwest or anything like that
Speaker 1: as a pretty standard across the board.
Speaker 4: It's pretty standard.
Speaker 2: You know, we do see the coastal towns going more
Speaker 2: for kind of Christmas by the Sea type themes. But typically,
Speaker 2: you know, our sales are driven by population centers, so,
Speaker 2: you know, very good sales in the Northeast, obviously California, Texas, Florida.
Speaker 2: It's really population driven. We don't necessarily see big regional
Speaker 2: differences in our sales. Anyway we sell, you know, most
Speaker 2: of our sales are online, so we sell through Amazon, Wayfair.
Speaker 4: Home depot based, et cetera.
Speaker 2: And so we really see sales driven by, you know,
Speaker 2: by where people live.
Speaker 1: Hey, Chris, thanks so much for joining us. Really appreciate it.
Speaker 1: Chris Butler, National Tree Company CEO,