WEBVTT - Levi's CFO on Earnings, GLAAD CEO on Spirit Day 0:00:00.240 --> 0:00:08.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to Bloomberg 0:00:08.640 --> 0:00:12.959 Business Week with Carol Messer and Tim Stenebek on Bloomberg Radio. 0:00:13.200 --> 0:00:15.360 Well about two weeks ago. Back on November TEWOD, Levi 0:00:15.400 --> 0:00:18.279 Strauss came out with earnings and they lowered their revenue 0:00:18.280 --> 0:00:20.520 growth outlook for the full year. The results showed that 0:00:20.640 --> 0:00:23.520 Levi Strauss is making progress toward its goal of becoming 0:00:23.520 --> 0:00:26.360 more reliant on its own stores and on e commerce, 0:00:26.360 --> 0:00:29.640 but weakness in other areas is also holding the company back. 0:00:29.640 --> 0:00:32.360 Shares fell as much as close to twelve percent that day. 0:00:32.400 --> 0:00:35.360 They ended up closing down seven point seven percent. On 0:00:35.800 --> 0:00:38.800 the day after those numbers came out, we got back 0:00:38.840 --> 0:00:41.640 with us. Harmeat Singh, chief financial officer over at Levi 0:00:41.720 --> 0:00:44.199 Strauss and Company. He joins us here in the Bloomberg 0:00:44.240 --> 0:00:47.040 Interactive Brokers Studio. Good to see you. 0:00:47.040 --> 0:00:49.600 Welcome, Yeah, thanks for having me, Tim and Molly. 0:00:49.920 --> 0:00:53.880 Hey, if you're watching us on YouTube or Bloomberg Originals, 0:00:54.640 --> 0:00:57.080 you can see that you are just head to toe 0:00:57.600 --> 0:01:01.640 in denim rw H two T. I don't know which 0:01:01.680 --> 0:01:02.880 Levi's jeans you're wearing. 0:01:02.680 --> 0:01:05.080 And these are new Losive fits. 0:01:05.080 --> 0:01:07.000 The five six eights Okay, he's got the five six 0:01:07.040 --> 0:01:10.040 eights on. You got the denim shirt, which looks great. 0:01:10.240 --> 0:01:14.120 With the Western way the Western okay, yeah, beyond you 0:01:14.160 --> 0:01:17.200 know we've signed up Beyonce. Yeah, we're gonna talk about 0:01:17.240 --> 0:01:18.839 we'll talk about that, right, Okay. 0:01:19.040 --> 0:01:21.040 And you need a jacket, so you've got a denim 0:01:21.120 --> 0:01:22.000 jacket on as well. 0:01:22.200 --> 0:01:23.080 Yeah, but then what. 0:01:23.040 --> 0:01:24.720 About the outerword jacket when you go outside. 0:01:24.760 --> 0:01:28.280 It's cold here, I know, but this jacket does protect me. 0:01:28.400 --> 0:01:31.280 The good news is we have a line of out 0:01:31.319 --> 0:01:34.800 of way just hitting our stoves for the ready. 0:01:35.040 --> 0:01:37.000 My question, do you always dress like this every day? 0:01:37.080 --> 0:01:37.280 Yeah? 0:01:37.280 --> 0:01:40.320 I mean that's the beauty of working at Lew's. You 0:01:40.319 --> 0:01:42.880 can wear the brands, you can wear it to work, 0:01:43.080 --> 0:01:45.479 you can wear two interviews like this, you can wear 0:01:45.480 --> 0:01:49.920 it to a formally went and people give you the latitude. 0:01:49.960 --> 0:01:52.440 Well it's good right now because no question, Denhim is 0:01:52.480 --> 0:01:54.080 having a moment, So you don't really look out of 0:01:54.160 --> 0:01:57.280 place when you're wearing a lot of Denhim. But I'm 0:01:57.280 --> 0:02:01.160 wondering how long that lasts, like because there have been 0:02:01.200 --> 0:02:04.200 moments like this when it comes to the history of 0:02:04.200 --> 0:02:06.080 the company, when it comes to fashion over the last 0:02:06.200 --> 0:02:08.920 few decades where Denham has gone in and out. How 0:02:08.960 --> 0:02:10.160 do you think about that? As CFO? 0:02:10.440 --> 0:02:14.640 Yeah, no, So we are the market leader and the 0:02:14.880 --> 0:02:18.160 as the market leader, market leader, and men's market leaders 0:02:18.160 --> 0:02:22.240 now and women's as the market leader. You know, our 0:02:22.440 --> 0:02:28.000 responsibility is to lead trends and drive people towards our products. 0:02:29.040 --> 0:02:31.640 You know, we're focused on what we call denim lifestyle, 0:02:31.720 --> 0:02:35.000 which is more head to toe across both men's and women's. 0:02:35.040 --> 0:02:39.000 You're wrapping it, yeah, and I'm rapping it. You can see, 0:02:39.160 --> 0:02:41.880 you know, the other folks, But denim is having a moment, 0:02:41.919 --> 0:02:45.480 as you call it. The last cycle started with the 0:02:45.520 --> 0:02:50.560 skinny way back into in the late late two thousand 0:02:50.600 --> 0:02:52.760 and seven, two thousand and eight. That lasted for about 0:02:52.760 --> 0:02:57.560 eight nine years. We were the first to introduce the 0:02:57.600 --> 0:03:01.480 loser fit just before COVID, and it took off post COVID. 0:03:01.680 --> 0:03:04.680 And you know, the other thing that we really focused 0:03:04.680 --> 0:03:07.360 on is because the words become a lot more casual 0:03:07.520 --> 0:03:11.240 after COVID. You see it in a hybrid work culture, 0:03:11.360 --> 0:03:14.720 you see it in other social occasions. And so we 0:03:14.760 --> 0:03:18.359 are making a stronger pivot to the non denim piece 0:03:18.360 --> 0:03:22.119 of our apparel for men we've got something called performance deech. 0:03:22.440 --> 0:03:25.720 It's like the ABC Lulu pant, and that's really gaining traction. 0:03:26.320 --> 0:03:29.800 And so as we think about, you know, growing the business, 0:03:29.840 --> 0:03:32.960 it's about owning a larger share of the closet without 0:03:34.360 --> 0:03:36.720 you know, taking the eye off the ball on what 0:03:36.760 --> 0:03:38.920 we're really known for, which is denim. And so it's 0:03:38.920 --> 0:03:40.119 all about denim lifestyle. 0:03:40.280 --> 0:03:41.880 I would think a lot of it right now too, 0:03:41.960 --> 0:03:44.600 is about wide legged dnimal. I mean that is just 0:03:44.640 --> 0:03:47.000 like we had a great story about this recently about 0:03:47.880 --> 0:03:50.200 you know, women in particular who are buying you know, 0:03:50.440 --> 0:03:53.080 roughly one hundred dollars wide legged jeans and then the 0:03:53.120 --> 0:03:56.320 seven hundred dollars wardrobe to go along with it. Jim's 0:03:56.360 --> 0:03:59.360 eyes just bulg. So yeah, all the rest of maybe 0:03:59.400 --> 0:04:01.960 like the crops, weaters and jackets, because if you've got 0:04:02.000 --> 0:04:03.840 like a waist that's coming up kind of high, then 0:04:03.880 --> 0:04:06.480 you want the shirt to kind of hit roughly around there. 0:04:06.520 --> 0:04:08.080 I'm learning this. I have a style of She's tell 0:04:08.160 --> 0:04:11.240 me all about it. So yeah, I mean, obviously, Hermie, 0:04:11.280 --> 0:04:12.280 you could tell us more about this. 0:04:13.120 --> 0:04:15.560 It's actually you hit the nail on the head. I 0:04:15.640 --> 0:04:17.839 was going to talk to you about it. But it's 0:04:17.880 --> 0:04:22.440 not only about bottoms, and as the as the fits 0:04:22.480 --> 0:04:26.840 for the bottom change, you know, so do the tops, 0:04:26.880 --> 0:04:30.560 and so as we think about denim lifestyle, we're also 0:04:30.640 --> 0:04:33.839 focused on growing our tops business, which was up nicely 0:04:35.000 --> 0:04:39.000 in quarter three. You know, it's up eight percent. Sorry 0:04:39.000 --> 0:04:41.640 I think eight percent. But overall, what you saw in 0:04:41.720 --> 0:04:46.280 quarter three largely was that Levi's as a brand grew 0:04:46.360 --> 0:04:49.440 five percent, and that's the strongest growth we have had 0:04:49.520 --> 0:04:54.360 in Levi's over two years. Sequentially, it's getting better and 0:04:54.400 --> 0:04:57.320 that's why, as we talked about quarter four, while we 0:04:57.400 --> 0:05:00.200 took our overall guidance for the year down, you know, 0:05:00.240 --> 0:05:03.680 our belief is sequentially quarter fours is you know, slightly 0:05:03.720 --> 0:05:04.599 better than quarter three. 0:05:04.720 --> 0:05:06.520 Well, if if Dunham is having this moment, then why 0:05:06.560 --> 0:05:08.800 don't you think investors are buying into this? Levi Strauss 0:05:08.839 --> 0:05:11.800 shares up about twelve percent so far this year, underperforming 0:05:12.320 --> 0:05:15.400 the S and P five hundred. Why aren't investors buying 0:05:15.440 --> 0:05:15.719 into this? 0:05:15.960 --> 0:05:20.160 Yeah? I think you know what we've done this year 0:05:21.160 --> 0:05:25.479 is we've narrowed focus into Levi's and beyond yoga. You know, 0:05:25.480 --> 0:05:28.440 we announced the exit of Dockers. The Dockers was underperforming. 0:05:28.800 --> 0:05:32.040 We had a smaller footwear business really based out of Europe. 0:05:32.520 --> 0:05:37.039 We are exiting that, and we were present in Target 0:05:37.839 --> 0:05:41.960 through our Denisen brand. We introduced Levi's Red Tab in 0:05:42.040 --> 0:05:45.279 Target that you know had a good run. So you know, 0:05:45.320 --> 0:05:47.719 we thought it was better to focus on Levi's than 0:05:47.800 --> 0:05:50.400 Red Tab. And so as you think about it, I 0:05:50.440 --> 0:05:54.120 think the fact that we are transforming in the year 0:05:54.440 --> 0:05:57.320 while are we trying to perform and performing really well 0:05:57.600 --> 0:06:01.200 on Levi's, is I think why people are just saying, Okay, 0:06:01.560 --> 0:06:06.279 let the transformation you know, get complete and we'll buy in. 0:06:06.320 --> 0:06:09.320 But overall, you know, Levi's as a stock over the 0:06:09.400 --> 0:06:12.719 last twelve months has had a decent run. We're long 0:06:12.760 --> 0:06:14.960 on the stock, We're long on you know, trends of 0:06:15.000 --> 0:06:17.960 the business. Our longer term goal is to take the 0:06:18.000 --> 0:06:20.120 six billion dollar business and make it more like a 0:06:20.160 --> 0:06:25.279 ten dollar ten billion dollar business, improving our operating margins 0:06:25.279 --> 0:06:27.839 by a couple of percentage points. The other thing that 0:06:27.920 --> 0:06:30.520 is happening in the business is this transformation into more 0:06:30.560 --> 0:06:33.280 of a d d C first business. It doesn't mean 0:06:33.360 --> 0:06:36.520 DDC only, it does mean, you know, we lead with DDC, 0:06:36.640 --> 0:06:41.400 which is our stores, our e commerce and wholesale compliments 0:06:41.400 --> 0:06:46.359 are are direct to consumer business, and that transformation is 0:06:46.440 --> 0:06:49.880 taking ship today. DDC is about half our business when 0:06:49.920 --> 0:06:51.719 I joined, is about a fifth of our business. 0:06:51.720 --> 0:06:53.479 We're going to get more on directing consumer in just 0:06:53.480 --> 0:06:55.240 a minute. But you mentioned doctors, so I wanted to 0:06:55.240 --> 0:06:57.400 talk to you a little bit about the options for doctors. 0:06:57.520 --> 0:06:59.800 You did announce that you're looking to sell the business 0:07:00.080 --> 0:07:01.760 when I when I heard that, I think to myself, 0:07:02.240 --> 0:07:04.799 this is like a perfect fit for authentic brands group. 0:07:05.360 --> 0:07:08.440 Jamie Stalter is like, uh, you know, Jamie Salter's group. 0:07:08.440 --> 0:07:15.000 He's got Airwalk, air Apostle, Billibong, DC, Greg Norman, Eddie Bauer, 0:07:15.120 --> 0:07:18.440 Champion Fry. I mean, I'm only down to F at 0:07:18.440 --> 0:07:22.040 that point in the alphabet. He's got everything over there 0:07:22.200 --> 0:07:24.760 down to Volcom. Does that make sense? 0:07:25.200 --> 0:07:25.440 You know. 0:07:26.240 --> 0:07:29.760 I won't comment about perspective bias. I would say that 0:07:30.640 --> 0:07:34.200 the reason we announced the exit of Docers we created Docers, Okay, 0:07:34.240 --> 0:07:36.920 so it's a homegrown brand that had a wonderful run 0:07:36.960 --> 0:07:40.160 for a long period of time. We launched Docers just 0:07:40.200 --> 0:07:43.720 to uh, you know, take advantage of the casual Friday 0:07:43.760 --> 0:07:47.160 that was said in the in the mid to late eighties. 0:07:48.600 --> 0:07:51.920 The what has happened is it's in a low growth category. 0:07:52.520 --> 0:07:55.120 And I'm a you know, we're a fun believer that 0:07:55.200 --> 0:07:59.000 what this does is unlocked dockers with somebody who can 0:07:59.080 --> 0:08:02.040 take it to the next level while we concentrated on 0:08:02.320 --> 0:08:04.640 taking Levis to the next level. I've been part of 0:08:04.720 --> 0:08:07.360 spin spinoffs and I've seen that happen. To your question 0:08:07.440 --> 0:08:11.840 about you know, perspective buiers, we announced it so that 0:08:12.480 --> 0:08:15.960 we would probably hear from perspective bias is early days. 0:08:16.400 --> 0:08:19.800 Our intent is to sell it, uh, and intend to 0:08:19.840 --> 0:08:21.920 sell it to bias that can not only take the 0:08:21.960 --> 0:08:25.600 brand to the next level, protect as many employees of 0:08:25.720 --> 0:08:29.480 doctors as they can and UH, and we'll see where 0:08:29.480 --> 0:08:32.640 this goes. Uh. Phones are ringing, which is the good news. 0:08:33.200 --> 0:08:37.840 These transactions take time, and you know, when we have 0:08:37.920 --> 0:08:41.880 something to talk about us who's the perspective acquired, we'll 0:08:41.880 --> 0:08:43.880 definitely you know, talk about that. 0:08:43.960 --> 0:08:47.160 You just call us, Yeah, just pass their phone calls 0:08:47.160 --> 0:08:50.320 maybe onto us. When those phones are ringing. I mean, 0:08:50.360 --> 0:08:52.400 what kind of timeline do you think is reasonable to 0:08:52.480 --> 0:08:55.199 look at something like that to really complete that kind 0:08:55.200 --> 0:08:55.560 of a space. 0:08:55.720 --> 0:09:00.480 It's a strong brand and in our view is something 0:09:00.520 --> 0:09:04.200 like this, you know, can take six to nine months. 0:09:04.960 --> 0:09:07.800 You know, what we're really interested is is ensure that 0:09:07.920 --> 0:09:10.600 it's a right buyer who does the right thing for 0:09:10.679 --> 0:09:13.640 the brand. Uh. And so you know we're going to 0:09:13.720 --> 0:09:16.360 do it in a fast way, but we'll do it 0:09:16.760 --> 0:09:17.400 the right way. 0:09:17.920 --> 0:09:20.079 Right. Well, I mean, I think this is the time 0:09:20.120 --> 0:09:23.400 where we pivot to Beyonce. I mean, tell us more 0:09:23.440 --> 0:09:26.199 about this partnership. I think a lot of people want 0:09:26.240 --> 0:09:28.440 to know about it when what exactly like her role 0:09:28.559 --> 0:09:31.360 is with the brand here, Like, is Beyonce like straight 0:09:31.440 --> 0:09:33.000 up designing Levi's clothes? 0:09:33.040 --> 0:09:33.160 Now? 0:09:33.200 --> 0:09:36.640 Like, can I get a Beyonce designed pair of Levi's geens? 0:09:36.760 --> 0:09:39.840 No, it's it's not about a product collaboration. It's about 0:09:39.840 --> 0:09:43.640 a partnership with someone. You know, she's an icon. She's 0:09:43.679 --> 0:09:47.400 been in the center of culture. You know. You know 0:09:47.520 --> 0:09:52.120 she her values and our values resonate. You know, she's 0:09:52.160 --> 0:09:55.160 been a supporter of the brand for years, for decades. 0:09:55.679 --> 0:09:59.679 And when she named a song after boy Carter co 0:10:00.080 --> 0:10:04.480 Carter and the song Levi's that was organic she you know, 0:10:04.520 --> 0:10:08.280 in nineteen I remember she she was at Coachella and 0:10:08.679 --> 0:10:13.320 was wearing US shots again a very organic, you know, 0:10:13.600 --> 0:10:17.160 uh thing that she did, and you know, product sales 0:10:17.160 --> 0:10:19.440 went up on the shots. So you know, we kind 0:10:19.440 --> 0:10:22.079 of sat back and said, you know, it's a it's 0:10:22.080 --> 0:10:24.120 a it's been a great partnership. Could we take it 0:10:24.200 --> 0:10:27.920 to the next level and having somebody like her support 0:10:27.960 --> 0:10:31.640 our brand, support the iconic apparel that we have, the 0:10:31.679 --> 0:10:35.160 five or ones for example, the T shirts. Actually actually, 0:10:35.240 --> 0:10:37.559 you know, I think we think it's a win win 0:10:37.600 --> 0:10:41.040 for both Beyonce as well as us. Plus, you know, 0:10:41.080 --> 0:10:45.720 we're leaning heavily into driving our women's business about a 0:10:45.720 --> 0:10:48.439 third of our business. We see no reason why it 0:10:48.480 --> 0:10:51.760 shouldn't be half our business, right and I think you know, 0:10:52.320 --> 0:10:56.240 she has uh, you know, many fans around the world, 0:10:56.280 --> 0:10:58.640 and I think the combination of the two brands would 0:10:58.640 --> 0:10:59.320 make a difference. 0:10:59.360 --> 0:11:01.360 Just well fifty seconds and then we're going to come 0:11:01.360 --> 0:11:06.080 back for more with you. Have you already noticed a 0:11:06.720 --> 0:11:09.880 higher sales figure or more loyalty on the back of 0:11:09.920 --> 0:11:10.439 this campaign. 0:11:10.679 --> 0:11:13.600 You know, it's early days with a campaign. This is 0:11:13.640 --> 0:11:17.960 the it's a twelve month partnership. We just launched the 0:11:17.960 --> 0:11:21.280 first chapter. You know, we'll have three other chapters. But 0:11:21.360 --> 0:11:24.840 what I can say is, you know, difficult to link, 0:11:25.200 --> 0:11:28.400 you know, a brand advertising with dregs sales. But what 0:11:28.440 --> 0:11:32.600 I could say right now is as we close quarter three, 0:11:32.640 --> 0:11:35.920 which we just reported, women's sales were up, you know, 0:11:36.000 --> 0:11:39.439 close to eleven percent. I Iconic five oh one was 0:11:39.520 --> 0:11:42.360 up double digit and I you know, so that's what 0:11:42.440 --> 0:11:44.120 we believe continues over time. 0:11:44.440 --> 0:11:46.200 Our meat stick with us. We're going to come back 0:11:46.240 --> 0:11:50.480 with her Meat Singh, chief financial officer at Levi Strassen Company. 0:11:50.520 --> 0:11:53.160 He joins us here in the Bloomberg Interactive at Brokers studio. 0:11:53.480 --> 0:11:56.760 You're listening to and watching Bloomberg Business Week. I want 0:11:56.760 --> 0:11:59.000 to get right back to har Meat Singh, chief financial 0:11:59.000 --> 0:12:01.199 Officer at Levi Strauss Company. He joins us here in 0:12:01.240 --> 0:12:04.920 the Bloomberg Interactive Brokers studio. We were chatting a little 0:12:04.920 --> 0:12:06.319 bit and I was telling you you've been at the 0:12:06.320 --> 0:12:09.760 company what since twenty thirteen. Yeah, you guys went public 0:12:09.760 --> 0:12:12.880 about five years ago again on the New York Stock Exchange. 0:12:12.920 --> 0:12:15.640 I was at that IPO because I was working on 0:12:15.679 --> 0:12:18.120 the floor of the exchange back then, and you guys 0:12:18.120 --> 0:12:20.199 were able to do something that I think in the 0:12:20.559 --> 0:12:23.360 you know, more than one hundred year history of the 0:12:23.360 --> 0:12:26.400 New York Stock Exchange has not ever been done before, 0:12:26.440 --> 0:12:31.040 which is allowed jeans on the floor on the trading floor. 0:12:31.040 --> 0:12:31.240 There. 0:12:31.520 --> 0:12:33.320 There's a lot of rules of the New York Stock Exchange. 0:12:33.320 --> 0:12:34.960 One of them is no genes allowed. I came in 0:12:35.000 --> 0:12:36.840 that day, everybody was decked out. 0:12:36.720 --> 0:12:41.840 In jeans, and wasn't everybody looking great? Oh yeah, Levis, Yeah, 0:12:41.880 --> 0:12:45.840 it was Lewis jeans. And you know that was you know, 0:12:45.920 --> 0:12:48.439 part of the deal we did with ny I see, 0:12:48.480 --> 0:12:52.160 you know, as we were debating Nico and Nastac, you know, 0:12:52.200 --> 0:12:55.040 we said, hey, if you can change the floor on 0:12:55.080 --> 0:12:58.640 the day of the listing and make it a denim flow, 0:12:58.960 --> 0:13:00.600 you know, we are in. And they were able to 0:13:00.640 --> 0:13:04.040 do that and into a wonderful, you know, wonderful morning 0:13:04.160 --> 0:13:07.720 and uh, you know, I think beginning of a new chapter. 0:13:07.600 --> 0:13:10.760 For the company understanding how things work between the New 0:13:10.840 --> 0:13:13.520 York Stock Exchange and the NASDAC. I think that they 0:13:13.640 --> 0:13:15.920 probably didn't even have to check with anyone. They probably 0:13:16.000 --> 0:13:19.040 just said yes at that moment, Harmida, I promise we 0:13:19.160 --> 0:13:21.439 get back to the idea of going direct consumer and 0:13:21.559 --> 0:13:23.840 building that relationship one on one with the consumer. 0:13:24.440 --> 0:13:24.560 Uh. 0:13:24.800 --> 0:13:27.320 Nike tried to do this over the last few years 0:13:27.400 --> 0:13:31.120 and they really alienated the foot lockers of the world 0:13:31.480 --> 0:13:33.360 who were such a big part of their business. And 0:13:33.400 --> 0:13:35.560 now there's a new CEO Nike. They're trying to turn 0:13:35.600 --> 0:13:40.360 that ship around, repair that relationship with those retailers. How 0:13:40.400 --> 0:13:42.680 do you do this but not alienate alienate the brick 0:13:42.679 --> 0:13:46.120 and mortar stores who for so long have sold your products. 0:13:46.200 --> 0:13:52.640 Yeah, I know. We love our wholesale customers. The way strategy, 0:13:53.080 --> 0:13:55.960 and the second pillow of a strategy is DDC first, 0:13:56.240 --> 0:13:57.880 but it's not DDC only. 0:13:58.559 --> 0:14:00.520 The whole CTC director can a. 0:14:00.559 --> 0:14:04.600 Director consumer wholesale is in a big compliment to how 0:14:04.640 --> 0:14:08.760 we're going to grow the business. You know. The reason 0:14:08.800 --> 0:14:12.440 d DC is important is allows us to provide more 0:14:12.760 --> 0:14:15.280 of a head to two assortment. We can drive the 0:14:15.320 --> 0:14:19.320 consumer experience and it's actually a proof point for wholesale 0:14:19.360 --> 0:14:22.360 retailers to see how the product is taking ship. So 0:14:22.400 --> 0:14:26.840 our new product introductions, we have a wonderful product pipeline 0:14:27.280 --> 0:14:30.920 hits the dd C flow first, the wholesale customers see 0:14:30.920 --> 0:14:33.240 how it is performing, and then they buy into it. 0:14:33.320 --> 0:14:37.560 We need wholesale customers largely because you know, to be 0:14:37.640 --> 0:14:40.400 the market leader, we have to reach out to consumers 0:14:40.760 --> 0:14:42.440 in a far and beyond and the only way to 0:14:42.480 --> 0:14:46.880 do that is is having a combination of a successful 0:14:46.960 --> 0:14:49.760 DDC business and a successful wholesale business. 0:14:49.920 --> 0:14:52.160 So I imagine ideally, like you would love to see 0:14:52.440 --> 0:14:56.440 the DTC base be new customers, adding like net new 0:14:56.520 --> 0:14:59.320 customers to the business. But is there a risk that 0:14:59.360 --> 0:15:01.920 this cannibal lies is the wholesale customer and that they 0:15:01.920 --> 0:15:02.520 shift over. 0:15:02.880 --> 0:15:04.840 Yeah, you know, it's a very good question. I've been 0:15:04.880 --> 0:15:07.040 asked that a couple of times, and we have not 0:15:07.200 --> 0:15:11.400 seen any evidence of cannibalization. The other pieces in the US, 0:15:11.520 --> 0:15:14.480 our d d C offer is what we call tier 0:15:14.520 --> 0:15:16.800 one and Tier two, so it is the best and 0:15:16.840 --> 0:15:20.480 the better the offer for wholesale customers, more tier three. 0:15:20.720 --> 0:15:23.480 We are talking to a few wholesale customers to introduce 0:15:23.520 --> 0:15:25.960 our tier two offer because in the top fifty to 0:15:26.000 --> 0:15:30.760 sixty dollars, you know, there is the consumer that wants 0:15:30.920 --> 0:15:35.880 the higher tier product. So we're not seeing cannibalization. We 0:15:35.920 --> 0:15:41.000 also don't see cannibalization between the different two channels within 0:15:41.080 --> 0:15:43.360 d DC, which is e commerce and our stores and 0:15:43.400 --> 0:15:46.480 in fact consumers now as you know, you know, like 0:15:46.520 --> 0:15:52.040 a seamless you know, shopping experience, so our view is 0:15:52.120 --> 0:15:56.800 that both channels can grow. DDC grows probably faster because 0:15:56.800 --> 0:15:59.359 we control the channel. We're able to drive the experience 0:15:59.840 --> 0:16:01.360 and have a head to do. 0:16:01.440 --> 0:16:05.000 Assaltman, we're talking a lot about the US election. It's 0:16:05.040 --> 0:16:07.560 top of mind here for us. My question is not 0:16:07.600 --> 0:16:11.000 about the politics of this, but about how you're potentially 0:16:11.000 --> 0:16:16.080 preparing for another Trump administration given the tariffs that you 0:16:16.240 --> 0:16:22.400 experienced during the first Trump administration, when Trump put European 0:16:22.440 --> 0:16:25.440 still in aluminum ex sports tariffs on those, and then 0:16:25.760 --> 0:16:29.800 you guys were hit with tariffs on jeans. So there's 0:16:29.840 --> 0:16:32.200 that part of it, and then a potential more tariffs 0:16:32.200 --> 0:16:34.320 between the US and China. How do you plan for that? 0:16:34.600 --> 0:16:37.800 Yeah, you know, we've been around for one hundred and 0:16:37.840 --> 0:16:43.000 seventy years, you know, and we've seen different administrations. The 0:16:43.120 --> 0:16:47.200 business and the brand has grown through different administrations, and 0:16:47.280 --> 0:16:51.240 so from our perspective, you know, we believe that. And 0:16:51.520 --> 0:16:53.120 you know when we guided quote a full and we 0:16:53.160 --> 0:16:57.480 talked about a sequential progression, you know, our belief is 0:16:57.520 --> 0:17:01.640 the brand continues to grow. To your question about tariffs. 0:17:02.520 --> 0:17:07.639 A couple of years ago, we were importing from China 0:17:07.720 --> 0:17:11.240 into the US about fifteen sixteen percent of the product. 0:17:12.320 --> 0:17:15.000 Over the years, we've scaled that down, so the imports 0:17:15.080 --> 0:17:19.439 into the US from China about a percentage going instead. 0:17:19.680 --> 0:17:22.840 And because we have a supply chain, we're able to 0:17:22.880 --> 0:17:26.680 cross source it across different geographies. So you know, we've 0:17:26.680 --> 0:17:29.320 been able to cross source it from other countries in 0:17:29.400 --> 0:17:34.480 Asia and think Vietnam, think Bangladesh, think Pakistan, And that's 0:17:34.480 --> 0:17:38.600 really what's really helped us, the cross sourcing strategy. Besides 0:17:38.640 --> 0:17:42.199 the fact that we're not concentrated significantly in anyone country 0:17:42.240 --> 0:17:46.800 makes a difference. And so our view is that you know, 0:17:47.680 --> 0:17:51.840 any administration, you know, we'll be able to continue to grow. 0:17:52.119 --> 0:17:55.400 What about retaliatory tariffs from the European Union or other 0:17:55.440 --> 0:17:57.520 countries on your own products. 0:17:57.119 --> 0:17:59.760 Yeah, I think you know, we have a strong business 0:17:59.760 --> 0:18:02.400 in Europe. If you have to cross source, we can. 0:18:02.840 --> 0:18:05.720 I think the end of the day is really how 0:18:05.760 --> 0:18:09.120 does it impact the consumer? You know, tariffs could mean 0:18:09.480 --> 0:18:12.560 higher pricess for the consumer, and that is something that 0:18:12.680 --> 0:18:16.919 we will, you know, tackle as the time comes along. 0:18:17.040 --> 0:18:20.640 Our products provide good value, okay, and if they're in 0:18:20.720 --> 0:18:23.679 fashion and they're you know, we bring in innovation. The 0:18:23.760 --> 0:18:26.800 consumer is going to gravitate and open the checkbook to 0:18:27.000 --> 0:18:29.639 buy our products. So you know, as we think through it, 0:18:29.640 --> 0:18:33.359 we have contingency plans in place in case, you know, 0:18:33.680 --> 0:18:37.159 different scenarios play out and we'll we'll be able to 0:18:37.160 --> 0:18:37.960 tackle through them. 0:18:38.200 --> 0:18:41.080 Is it tempting to think about a fifteen percent corporate tax, 0:18:41.160 --> 0:18:43.760 right and what you might do with all that money 0:18:43.760 --> 0:18:45.000 that's not paid in taxes? 0:18:45.359 --> 0:18:50.159 You know, I have a wonderful tax group that you know, 0:18:50.400 --> 0:18:55.479 plan different tax opportunities all the time. But you know, 0:18:55.920 --> 0:18:59.320 our view is as good corporate citizens, you know, we 0:18:59.400 --> 0:19:01.720 have to pay the pay the taxes and that. 0:19:01.760 --> 0:19:04.040 Is a noble thing to say. 0:19:03.840 --> 0:19:06.160 They and you know, at the end of the day, 0:19:07.040 --> 0:19:10.160 it's very important for us to you know, provide great 0:19:10.200 --> 0:19:12.800 value to our consumers and build the oil fans, and 0:19:12.840 --> 0:19:13.880 that's what we focus on. 0:19:14.240 --> 0:19:17.200 I gotta say, not many of our guests can pull 0:19:17.240 --> 0:19:20.840 off head to toe denim. And it's not just that, 0:19:20.880 --> 0:19:23.960 it's also the shirt as well. Harmy, you're one of 0:19:23.960 --> 0:19:26.639 those folks who can do that. Har Meat sing cfo 0:19:26.840 --> 0:19:29.960 at Levi Strauss joining us here in the Bloomberg. 0:19:29.680 --> 0:19:32.120 Thanks to him, Thanks Studio Good. 0:19:32.600 --> 0:19:34.520 Her Meat's going to be featured in the forthcoming issue 0:19:34.560 --> 0:19:38.320 of Bloomberg's CFO Briefing newsletter. You can sign up for 0:19:38.400 --> 0:19:42.480 it now at Bloomberg dot com, slash account, slash newsletters, 0:19:42.680 --> 0:19:44.840 slash CFO Briefing. 0:19:44.640 --> 0:19:45.879 CFO hyphen Briefing. 0:19:46.119 --> 0:19:49.680 Oh, don't miss that is not going to work. It 0:19:49.760 --> 0:19:53.040 will not check out that newsletter though. You also just Bloomberg. 0:19:54.000 --> 0:19:55.520 Just google Bloomberg Newsletters. 0:19:55.520 --> 0:19:56.920 Oh yeah, I'm sure to come up. We got a 0:19:56.960 --> 0:19:58.040 whole bunch of them out there. 0:19:59.320 --> 0:20:03.800 Things Bloomberg Business Week with Carol Messer and Tim Stenebeck 0:20:04.160 --> 0:20:06.240 on Bloomberg Radio and Television. 0:20:07.600 --> 0:20:10.199 It is Bloomberg Business Week. That is Molly Smith in 0:20:10.240 --> 0:20:15.200 for Carol Masser this afternoon. Mary Smith, Bloomberg News Economics Editor. 0:20:15.560 --> 0:20:18.840 I think we've hit the director of titles for me 0:20:18.920 --> 0:20:21.600 today about the same things. Good to be here, Tim, 0:20:22.000 --> 0:20:24.240 and we'rearded. Yes, I wanted to come in for our 0:20:24.520 --> 0:20:27.040 final guests of the day. Wow, we're getting really close 0:20:27.080 --> 0:20:28.560 to the end here. It's been such a nice afternoon. 0:20:28.600 --> 0:20:30.240 We're gonna good to have you with us. And we 0:20:29.880 --> 0:20:31.360 got a great guest right now. 0:20:31.480 --> 0:20:31.800 We do. 0:20:32.000 --> 0:20:36.200 Yes. So while LGBTQ acceptance is at an all time high, 0:20:36.320 --> 0:20:40.119 so is bullying and discrimination. We're bringing back Sarah Kate Ellis. 0:20:40.280 --> 0:20:44.520 She's the CEO and president of GLAD and that stands 0:20:44.800 --> 0:20:49.440 for help me out here, tim the Oh, my gosh, 0:20:49.520 --> 0:20:51.919 I should have had this ready, Sarahkate. Sarah Kate's going 0:20:51.920 --> 0:20:52.320 to bring. 0:20:52.160 --> 0:20:55.280 It in Lesbian Alliance Against Defamation. But everybody refers to 0:20:55.320 --> 0:20:56.200 it these days as GLAD. 0:20:56.359 --> 0:20:59.240 That's right, That's why I was so reliant. I'm glad, 0:20:59.240 --> 0:21:00.720 but I should have had that al ready, my bad. 0:21:00.760 --> 0:21:02.840 So Sarah Kate. Alice is joining us now. She's here 0:21:02.840 --> 0:21:05.200