1 00:00:00,120 --> 00:00:02,960 Speaker 1: Michael Berkowitz. He is Norwegian Will founder and CEO, is 2 00:00:03,000 --> 00:00:05,200 Speaker 1: a specialist in quiet lectury. We learned about it, of 3 00:00:05,240 --> 00:00:07,400 Speaker 1: course from succession. Michael, welcome back, good to. 4 00:00:07,320 --> 00:00:08,640 Speaker 2: Heavy here, great to be back. 5 00:00:08,720 --> 00:00:11,640 Speaker 1: So how did your Quiet Luxury do this holiday season? 6 00:00:12,000 --> 00:00:13,280 Speaker 2: This hero is fantastic. 7 00:00:13,640 --> 00:00:15,640 Speaker 3: The whole year was quite strong, and then these last 8 00:00:15,680 --> 00:00:19,040 Speaker 3: few months were really really very strong, way beyond what 9 00:00:19,079 --> 00:00:22,560 Speaker 3: we actually expected, really to the point where usually we 10 00:00:22,600 --> 00:00:24,960 Speaker 3: tell our customers that if you were to shop with 11 00:00:25,079 --> 00:00:27,960 Speaker 3: us late January February, we would still have most of 12 00:00:27,960 --> 00:00:31,000 Speaker 3: those core items still available. I just looked over our 13 00:00:31,000 --> 00:00:33,600 Speaker 3: inventory and for many of our core styles we only 14 00:00:33,600 --> 00:00:36,040 Speaker 3: have one or two pieces left in each size. 15 00:00:36,400 --> 00:00:37,960 Speaker 2: So that's a good problem to have. 16 00:00:38,040 --> 00:00:39,560 Speaker 3: But I guess if you want one, to get it soon, 17 00:00:39,640 --> 00:00:42,880 Speaker 3: because we're thankfully it was very very strong. 18 00:00:42,960 --> 00:00:45,160 Speaker 1: Well that's good news. But how's the supply chain looking? 19 00:00:45,200 --> 00:00:47,040 Speaker 1: Can you replenish this inventory? 20 00:00:47,200 --> 00:00:47,879 Speaker 2: Not for this year? 21 00:00:48,000 --> 00:00:50,640 Speaker 3: No, we have what we have for this fall winter 22 00:00:51,159 --> 00:00:54,280 Speaker 3: and already soon we placed the order with our factories 23 00:00:54,280 --> 00:00:57,600 Speaker 3: in Italy for next year. So that's it for this year, 24 00:00:57,640 --> 00:01:00,240 Speaker 3: and then we sort of close up shop. We'll do 25 00:01:00,320 --> 00:01:02,640 Speaker 3: a little bit more of our spring summer collection come 26 00:01:02,760 --> 00:01:06,479 Speaker 3: March April time, but no, the big stuff happens again 27 00:01:06,520 --> 00:01:06,960 Speaker 3: next year. 28 00:01:07,120 --> 00:01:09,160 Speaker 1: Do you have a sense of how the retail segment 29 00:01:09,400 --> 00:01:12,600 Speaker 1: overall did? I mean it's specifically luxury. How did luxury 30 00:01:12,600 --> 00:01:14,000 Speaker 1: do as opposed to mainstream? 31 00:01:14,319 --> 00:01:18,040 Speaker 3: So it's interesting our customer you could sort of separate 32 00:01:18,080 --> 00:01:19,440 Speaker 3: into two types of customers. 33 00:01:19,480 --> 00:01:21,000 Speaker 2: The typical luxury guy. 34 00:01:20,920 --> 00:01:25,240 Speaker 3: Or girl who is usually spending luxury prices, usually shopping 35 00:01:25,319 --> 00:01:29,080 Speaker 3: in luxury stores, and that is overall doing very very well. 36 00:01:29,600 --> 00:01:30,640 Speaker 2: And then there's. 37 00:01:30,480 --> 00:01:33,320 Speaker 3: Also the splurger, the person who usually is a little 38 00:01:33,360 --> 00:01:36,040 Speaker 3: bit more bargain hunting, who doesn't typically spend at our 39 00:01:36,080 --> 00:01:39,040 Speaker 3: price points, but for items like US or other items 40 00:01:39,080 --> 00:01:40,679 Speaker 3: where they feel like they keep on buying and they're 41 00:01:40,720 --> 00:01:42,800 Speaker 3: not getting what they want, they'll splurge and say, I 42 00:01:42,920 --> 00:01:44,880 Speaker 3: need I finally need a coate that does what it's 43 00:01:44,880 --> 00:01:46,960 Speaker 3: supposed to do. I need a quote that looks nice 44 00:01:47,120 --> 00:01:49,760 Speaker 3: and is warm, it'll keep me dry. We actually just 45 00:01:49,840 --> 00:01:52,440 Speaker 3: had a customer from Blackstone who bought from us, and 46 00:01:52,480 --> 00:01:55,800 Speaker 3: he said that coats need to do three things, keep 47 00:01:55,800 --> 00:01:57,680 Speaker 3: you warm, keep you dry, and look nice and goes 48 00:01:57,720 --> 00:02:01,160 Speaker 3: yours check off all three of customers who usually don't 49 00:02:01,160 --> 00:02:04,880 Speaker 3: spend that much. They're the splurge car, the splurge customer, 50 00:02:04,920 --> 00:02:05,800 Speaker 3: and they'll come to us. 51 00:02:06,160 --> 00:02:08,720 Speaker 2: And in both of those worlds, we're seeing it very strong. 52 00:02:08,880 --> 00:02:11,440 Speaker 3: However, I think some of the other retail, some of 53 00:02:11,440 --> 00:02:13,560 Speaker 3: the other vendors are not seeing it quite as strong 54 00:02:13,960 --> 00:02:16,680 Speaker 3: if they don't have the performance aspect, Especially for that 55 00:02:16,760 --> 00:02:20,320 Speaker 3: splurge customer. You have to have compelling features, you have 56 00:02:20,400 --> 00:02:22,840 Speaker 3: to have a little bit more to the story, or 57 00:02:22,880 --> 00:02:26,240 Speaker 3: else they might be veering away from some of the spending. 58 00:02:26,320 --> 00:02:29,280 Speaker 1: Right now, the US consumer's done remarkably well so far. 59 00:02:29,400 --> 00:02:31,680 Speaker 1: There's reports that it might be weakening a little bit. 60 00:02:31,760 --> 00:02:34,040 Speaker 1: It sounds like you're not seeing that yourself. But do 61 00:02:34,040 --> 00:02:36,200 Speaker 1: you think you're taking market share away from others as 62 00:02:36,240 --> 00:02:38,440 Speaker 1: opposed to the overall tide continue to rise. 63 00:02:39,040 --> 00:02:42,800 Speaker 3: No, Actually, a lot of the competitors, if you will, 64 00:02:42,880 --> 00:02:45,239 Speaker 3: from twenty thirty years ago sort of left this space. 65 00:02:45,280 --> 00:02:48,239 Speaker 3: A lot of the big brands that people at home 66 00:02:48,280 --> 00:02:52,160 Speaker 3: will be pretty familiar with have really geared themselves more 67 00:02:52,160 --> 00:02:55,360 Speaker 3: into urban wear, more into streetwear, and have left more 68 00:02:55,360 --> 00:02:58,200 Speaker 3: of this quiet luxury behind. So we're picking up a 69 00:02:58,240 --> 00:03:00,680 Speaker 3: lot of those people who are shot and don't know 70 00:03:00,720 --> 00:03:01,320 Speaker 3: what to get. 71 00:03:01,639 --> 00:03:02,440 Speaker 2: There are a lot of people. 72 00:03:02,480 --> 00:03:04,320 Speaker 3: We've heard this from some of the big department stores 73 00:03:04,360 --> 00:03:06,560 Speaker 3: we sell to, that we are picking up a lot 74 00:03:06,560 --> 00:03:08,800 Speaker 3: of customers who would have walked out empty handed if 75 00:03:08,800 --> 00:03:11,280 Speaker 3: it wasn't for a Norwegian wool. So I don't think 76 00:03:11,280 --> 00:03:13,640 Speaker 3: we're necessarily pulling away market share. I think we're getting 77 00:03:13,639 --> 00:03:16,360 Speaker 3: all these customers who weren't going to buy code if 78 00:03:16,360 --> 00:03:17,399 Speaker 3: they didn't know about us. 79 00:03:17,800 --> 00:03:20,000 Speaker 1: One of the big stories has been returned to office. 80 00:03:20,280 --> 00:03:24,040 Speaker 1: A lot of employers who've been really urging their employees 81 00:03:24,080 --> 00:03:26,480 Speaker 1: to come back. How is that affecting your demand? 82 00:03:26,800 --> 00:03:29,000 Speaker 3: So we're certainly seeing that's happening a lot. I would 83 00:03:29,000 --> 00:03:31,480 Speaker 3: say there are even some customers. They may not be 84 00:03:31,560 --> 00:03:33,520 Speaker 3: back five days a week, but they're certainly back three 85 00:03:33,560 --> 00:03:36,560 Speaker 3: four days a week, and their closet has to reflect that. 86 00:03:37,400 --> 00:03:40,200 Speaker 3: One thing we're seeing is a lot of shopping from 87 00:03:40,440 --> 00:03:44,360 Speaker 3: the suburbs. We always see the big cities Boston, Chicago, 88 00:03:44,600 --> 00:03:47,680 Speaker 3: d C, New York, and the European big cities, and 89 00:03:47,760 --> 00:03:50,160 Speaker 3: this year the zip codes have extended well beyond the 90 00:03:50,160 --> 00:03:53,560 Speaker 3: big cities into a lot of the luxury suburban markets, 91 00:03:53,600 --> 00:03:56,560 Speaker 3: more so than in previous years. And I think it's 92 00:03:56,600 --> 00:03:59,360 Speaker 3: because a lot of those customers were city people who 93 00:03:59,400 --> 00:04:02,640 Speaker 3: bought home in a lot of these places, and now 94 00:04:02,680 --> 00:04:04,560 Speaker 3: they're coming back to the office and they're commuting for 95 00:04:04,600 --> 00:04:06,240 Speaker 3: the first time, whether in their own car or on 96 00:04:06,280 --> 00:04:07,920 Speaker 3: a train, and now they need a code for that. 97 00:04:08,080 --> 00:04:10,840 Speaker 3: So back to work is definitely happening, and it's certainly 98 00:04:10,840 --> 00:04:11,400 Speaker 3: helping us. 99 00:04:11,520 --> 00:04:13,920 Speaker 1: How cyclical is your business? I mean, we identify you 100 00:04:13,960 --> 00:04:17,040 Speaker 1: with coats, particularly warm garments, and we get to the 101 00:04:17,040 --> 00:04:18,919 Speaker 1: summer here we don't need warm garments, So does it 102 00:04:18,960 --> 00:04:20,800 Speaker 1: come up and come down? Is just a peak for you? 103 00:04:20,880 --> 00:04:21,160 Speaker 1: Right now? 104 00:04:21,160 --> 00:04:22,120 Speaker 2: It's definitely the peak. 105 00:04:22,400 --> 00:04:25,599 Speaker 3: But items like our sport jackets, which I'm wearing right now, 106 00:04:25,680 --> 00:04:28,000 Speaker 3: and our raincoats and things like that, we sell those 107 00:04:28,080 --> 00:04:31,520 Speaker 3: all year long, and some of those really do peak 108 00:04:31,600 --> 00:04:34,520 Speaker 3: in March April when it's chilly but not freezing. 109 00:04:34,920 --> 00:04:37,320 Speaker 2: Our raincoats are good for even August time. 110 00:04:37,400 --> 00:04:39,800 Speaker 3: So we still have a continued business all year round, 111 00:04:39,839 --> 00:04:42,159 Speaker 3: but certainly fall winter is our peak. 112 00:04:42,240 --> 00:04:44,040 Speaker 1: So we're about to end twenty twenty three. What do 113 00:04:44,080 --> 00:04:45,920 Speaker 1: is twenty twenty four look like to you? But there's 114 00:04:45,920 --> 00:04:47,200 Speaker 1: a lot to talk about. Whether we're going to go 115 00:04:47,200 --> 00:04:48,920 Speaker 1: to a recesion whether there's going to be a drop 116 00:04:48,960 --> 00:04:49,720 Speaker 1: off in the economy. 117 00:04:50,320 --> 00:04:52,560 Speaker 3: I think I'm sure a lot of there are people 118 00:04:52,680 --> 00:04:54,120 Speaker 3: come on these shows who could say more than me, 119 00:04:54,240 --> 00:04:56,279 Speaker 3: But I think it looks like we're headed towards a 120 00:04:56,320 --> 00:04:59,760 Speaker 3: soft landing. Certainly a lot of our luxury customers are 121 00:05:00,000 --> 00:05:03,719 Speaker 3: somewhat agnostic to that anyway, But things are looking strong. 122 00:05:03,760 --> 00:05:06,440 Speaker 3: I would say that there's a lot of fundamentals that. 123 00:05:06,440 --> 00:05:07,239 Speaker 2: Are looking strong. 124 00:05:07,360 --> 00:05:08,880 Speaker 3: Some of the things that were going on in other 125 00:05:08,960 --> 00:05:11,720 Speaker 3: parts of the world that haven't spilled beyond that. So 126 00:05:11,839 --> 00:05:17,040 Speaker 3: there's a pretty positive, strong sentiment amongst customers. And for us, 127 00:05:17,080 --> 00:05:19,520 Speaker 3: we're continuing to do what we're doing, focusing on a 128 00:05:19,520 --> 00:05:22,320 Speaker 3: lot of our core products, but also developing some new items. 129 00:05:22,640 --> 00:05:25,640 Speaker 3: We get feedback from customers, I have five of your quotes already, 130 00:05:25,640 --> 00:05:27,880 Speaker 3: but I wish you have made whatever, and then we 131 00:05:27,920 --> 00:05:29,839 Speaker 3: bring that to our production and design team to see 132 00:05:29,839 --> 00:05:31,000 Speaker 3: if there's something there from that. 133 00:05:31,279 --> 00:05:33,640 Speaker 1: So you've got a strong base, it sounds like how 134 00:05:33,680 --> 00:05:34,480 Speaker 1: do you expand from here? 135 00:05:34,520 --> 00:05:34,960 Speaker 2: Where do you go? 136 00:05:35,120 --> 00:05:37,760 Speaker 1: Is it more outlets, is it more products? Is it 137 00:05:37,800 --> 00:05:39,800 Speaker 1: more demographic lines? 138 00:05:40,480 --> 00:05:42,840 Speaker 3: So I think last time I was here, I mentioned 139 00:05:42,880 --> 00:05:44,400 Speaker 3: that we're seeing a lot of growth on the women's 140 00:05:44,400 --> 00:05:46,800 Speaker 3: side because that we launched more recently and that's been 141 00:05:46,839 --> 00:05:49,600 Speaker 3: a huge source of growth and will be because there 142 00:05:49,600 --> 00:05:52,320 Speaker 3: there's a lot of white space on the paper. Then yes, 143 00:05:52,440 --> 00:05:56,719 Speaker 3: more products for existing customers to continue buying. Other products 144 00:05:56,760 --> 00:06:02,640 Speaker 3: from us that really embodying Norwegian wal performance, like our 145 00:06:02,720 --> 00:06:05,640 Speaker 3: Cashmeir baseball caps and hats. Those are things that we 146 00:06:05,680 --> 00:06:07,400 Speaker 3: didn't have a few years ago, and we continue to 147 00:06:07,440 --> 00:06:08,320 Speaker 3: develop more of those. 148 00:06:08,160 --> 00:06:09,240 Speaker 2: Types of accessories. 149 00:06:09,680 --> 00:06:13,599 Speaker 3: Geographically, Europe has been a major source of growth for us. 150 00:06:14,120 --> 00:06:17,039 Speaker 3: We did a pop up in Milan this past year, 151 00:06:17,120 --> 00:06:18,840 Speaker 3: a short term one that did really well. So now 152 00:06:18,920 --> 00:06:21,640 Speaker 3: we're looking into doing one in Paris rants for twenty 153 00:06:21,680 --> 00:06:25,719 Speaker 3: twenty four, so putting our product in more areas. 154 00:06:26,240 --> 00:06:28,480 Speaker 2: And I think a lot of people still may have not. 155 00:06:28,480 --> 00:06:30,560 Speaker 3: Heard about us, especially if they weren't in the market, 156 00:06:30,600 --> 00:06:32,320 Speaker 3: and we're still reaching all those guys. 157 00:06:32,520 --> 00:06:35,200 Speaker 1: What about costs, I mean costs that you have to pay, 158 00:06:35,240 --> 00:06:37,479 Speaker 1: but also costs you can pass on to customers. Where 159 00:06:37,480 --> 00:06:39,920 Speaker 1: are we inflation from your point of view, I. 160 00:06:39,839 --> 00:06:40,840 Speaker 2: Think it's manageable. 161 00:06:41,000 --> 00:06:43,760 Speaker 3: I think that what we really try to do is 162 00:06:44,600 --> 00:06:47,640 Speaker 3: really make sure that we're still always viewed as a value. 163 00:06:47,839 --> 00:06:51,080 Speaker 3: So We don't like to just spend more and then 164 00:06:51,279 --> 00:06:53,320 Speaker 3: put it onto the customer. I think that there's some 165 00:06:53,360 --> 00:06:56,200 Speaker 3: pushback if you do that too much. Other brands, I 166 00:06:56,200 --> 00:06:58,240 Speaker 3: think have done that way too quickly, and in many 167 00:06:58,279 --> 00:07:01,360 Speaker 3: cases the quality has gone down. Will never do that, 168 00:07:01,480 --> 00:07:03,120 Speaker 3: you know, have the price go up and the quality 169 00:07:03,200 --> 00:07:06,039 Speaker 3: go down. Sometimes. To maintain that quality, we do have 170 00:07:06,120 --> 00:07:08,240 Speaker 3: to raise the prices, but we try to do it 171 00:07:08,279 --> 00:07:10,160 Speaker 3: in a manageable way so that it's not going up 172 00:07:10,160 --> 00:07:12,080 Speaker 3: more than anything else you're seeing, you know, from other 173 00:07:12,120 --> 00:07:14,160 Speaker 3: things that you buy. And we really try to keep 174 00:07:14,160 --> 00:07:17,559 Speaker 3: things in certain threshold so the entry level below fifteen 175 00:07:17,640 --> 00:07:20,320 Speaker 3: hindri at the entry level looks below two thousand, and 176 00:07:20,440 --> 00:07:24,040 Speaker 3: you try to keep it psychologically in certain concertned buckets. 177 00:07:24,240 --> 00:07:26,120 Speaker 1: Michael's really great to have you back. Thank you for 178 00:07:26,120 --> 00:07:29,000 Speaker 1: being here. Congratulations in our strong season. That's more Norwegian 179 00:07:29,000 --> 00:07:31,280 Speaker 1: Will's CEO and founder, Michael Workerwitz