Speaker 1: Bloomberg Audio Studios, podcasts, radio.
Speaker 2: News and now we finished strong in this hour with
Speaker 2: Oliver Chen definitive at TD Cowen. I can't say enough
Speaker 2: about his acuity over the years. Oliver, I remember the
Speaker 2: day a pair of five oh one Levi's became more
Speaker 2: than nine to ninety nine a pair you feature in
Speaker 2: your research note Levi's, what is their strategy given Amazon
Speaker 2: and given twenty twenty five.
Speaker 1: Retail Well, Tom, it's a pleasure to be here. Happy
Speaker 1: Black Friday as well. Levi's is an iconic brand with
Speaker 1: dominant market share at the premium end of the market. Also,
Speaker 1: as we think about what's happening now in product execution,
Speaker 1: it's about classics with the twist. It's about getting great
Speaker 1: value as well, and denim fits really nicely into these names.
Speaker 1: What Lee advis is doing specifically is more direct to consumer,
Speaker 1: basically opening their own stores globally, and consumers are looking
Speaker 1: for value. It plays quite nicely with quality. As you know,
Speaker 1: five O ones last forever and you shouldn't wash them either.
Speaker 2: We turned it survell Oh tell me yeah, I get
Speaker 2: that lecture at home. We turned a surveillance. Fashion correspondent
Speaker 2: Lisa Matteo. Lisa Brandy Melville is on the Manteo target,
Speaker 2: isn't it? Oh?
Speaker 3: Okay? So yesterday I received my daughter's seven page PowerPoint
Speaker 3: presentation for her Christmas list. My question to you, Oliverts
Speaker 3: is are people going to be spending as much as
Speaker 3: they did last holiday season? That's what I want to know,
Speaker 3: because I put a budget out there.
Speaker 1: Yeah, Lisa, first of all, I want that deck. Please
Speaker 1: to the second, we are seeing spending, We're seeing a
Speaker 1: consumer that does have plenty of anxiety, that's looking for
Speaker 1: great deals. That being said, the consumer still has money,
Speaker 1: wants joy. We're forecasting up two to three percent. Keep
Speaker 1: in mind inflation and pricing will be about two to
Speaker 1: three percent, so your units are flat and there's a
Speaker 1: bit of a struggle. On the one hand, consumers want
Speaker 1: joy and wellness and gifting. On the other hand, they're
Speaker 1: feeling anxious, so we're watching both them. There's a bunch
Speaker 1: of cross currents. But don't be against the US consumer.
Speaker 1: It's been solid worldwide.
Speaker 2: Oliver chen with this TD cone and we continue, Oliver,
Speaker 2: are we going to get out charge cards or like
Speaker 2: the Affirm buy now, pay later kind of thing? How
Speaker 2: are we going to acquire our Christmas, our holiday twenty twenty.
Speaker 1: Two, Well, we're going to be using both. What's still
Speaker 1: happening is mobile is in the new mall, so we're
Speaker 1: seeing increased rates of mobile use. But a bit of
Speaker 1: everything from a buy online, pickup in store, to curbside
Speaker 1: pickup to delivery is being used so much. And then
Speaker 1: I like the good old fashioned way. It's just thrilling
Speaker 1: to be in the stores this morning and across the
Speaker 1: country and earlier this week. So it's all happening. And
Speaker 1: certainly these new ways of payment and the future of
Speaker 1: payments as being is very different for younger customers too.
Speaker 2: Oliver Chin on luxury right now. Kevin Gordon is in
Speaker 2: the French helps at that hotel. Audrey Hepprin was in
Speaker 2: in Charade with Carrie Grant. He emails in Oliver with
Speaker 2: a great question. This is Kevin Gordon, Charles schwab Botaga
Speaker 2: Vanada blew it up and is doing better with the
Speaker 2: British type. Louise Trotter, the fashion heads of different luxury brands,
Speaker 2: they still really matter, don't they.
Speaker 1: Yeah, what's happening is lots of change. The creative matters.
Speaker 1: I'm really creating desire, having new design, and we're seeing
Speaker 1: a lot of newness at Gucci and others, and Botaga
Speaker 1: has been doing great. The themes for luxury continue to
Speaker 1: be quiet luxury in terms of what's happening, with less
Speaker 1: focus on logos and a real emphasis on quality and materials.
Speaker 1: So botakea Vinetta fits nicely in that trend. As you know, Brunello, Cucinelle,
Speaker 1: Laura Piana, and I'm a personal lover of Gutia, so
Speaker 1: i want to see them when we're watching some creative
Speaker 1: change there at tom Ford too.
Speaker 2: Right, we've seen that, Lisa, you mentioned today Berbery a
Speaker 2: little bit off the mark. They've been hugely promotional, Lisa Mateo.
Speaker 3: Now also on the luxury segment, I'm going through the
Speaker 3: Wall Street Journal this morning and it has this article
Speaker 3: says Jewelry is outperforming the rest of the luxury world.
Speaker 3: Are you seeing that?
Speaker 1: Yes, we are. We We love Cartier, so there's a
Speaker 1: there's definitely a bar Bell and by furcation where more
Speaker 1: pressure at the low and middle and then some real
Speaker 1: strength at the high end. And Cardier Richemont Group is
Speaker 1: outperforming Van Cleef as well as Cardier customers are gravitating,
Speaker 1: gravitating towards gold, jewelry, real stores of value, and the
Speaker 1: prices here are compelling because handbag prices have gotten an
Speaker 1: extreme So the Love collection at Cardier, Love Unlimited at Cardier,
Speaker 1: the Mason really enduring value and timelessness. And oh, overall,
Speaker 1: the jewelry growth rates have been in the high single
Speaker 1: digit and we've been struggling to grow in handbags.
Speaker 2: Will we see M and A this year? I mean,
Speaker 2: in so many other industries who talk about mergers and
Speaker 2: acquisitions and wall streets on fire with a boom economy
Speaker 2: in the Oliver Chen world, do they gobble up the
Speaker 2: weak providers in luxury or frankly in other markets as well.
Speaker 1: Yeah, Tom, I think what we'll see is selective m
Speaker 1: and A. Beauty is always an m and A orientated
Speaker 1: sector in terms of large players acquiring brands that have
Speaker 1: been developed by founders, skincare, longevity, niche, fragrances, those are
Speaker 1: big opportunities. In luxury, it'll be selective. There are some
Speaker 1: assets that have sold and we'll see. But the market's
Speaker 1: getting better with the consumer on more stable footing, so
Speaker 1: MNA is totally possible, and we're watching the IPO market too.
Speaker 2: Oliver, Chen your single best buy. Please.
Speaker 1: We like Walmart. We like the AI story, we like
Speaker 1: the value story, we like delivery, curbside pickup, marketplace model,
Speaker 1: digital advertising that remains a favorite for us.
Speaker 2: Oliver, I got a pe of forty three on Walmart.
Speaker 2: You got to be kidding me. How is that possible?
Speaker 1: There's a lot ahead. Digital advertising for Walmart is in
Speaker 1: the five billion dollar range. Think about Google, Amazon and
Speaker 1: others that are fifty plus. Furthermore their capabilities. It's themes
Speaker 1: about the big getting bigger and reaching more and more
Speaker 1: profitability online in part because of digital advertising as well
Speaker 1: as the marketplace. In addition, it's defensive in that it's
Speaker 1: a leading grocery business with sixty percent of the revenue
Speaker 1: being grocery. So we're excited about all these things on
Speaker 1: the offense, on AI as well as delivery and micro
Speaker 1: fulfillment on the defense as well as the everyday low price,
Speaker 1: and that's what consumers are looking for today. Finally, they're
Speaker 1: getting higher household income consumers as well, and they're serving
Speaker 1: the middle and low well too with that everyday low price.
Speaker 1: I grew up in Louisiana, going to the Walmart Supercenter
Speaker 1: and it's a real community driven retailer as well.
Speaker 2: Oliver, thank you so much for having us finish strong
Speaker 2: in retail this Black Friday. Mister Chen is with TD Cowen.
Speaker 2: I can't say enough we protect the copyright of all
Speaker 2: of our guests. For Oliver Chen, please go to T
Speaker 2: D Cowen to get this brilliant note. You heard it there.
Speaker 2: Walmart Single best buye