WEBVTT - Bloomberg Businessweek Weekend - February 20th, 2026 0:00:00.880 --> 0:00:05.279 This is Bloomberg Business Week Daily, reporting from the magazine 0:00:05.280 --> 0:00:09.960 that helps global leaders stay ahead with insight on the people, companies, 0:00:10.000 --> 0:00:14.960 and trends shaping today's complex economy. Plus global business finance 0:00:15.000 --> 0:00:18.600 and tech news as it happens. Bloomberg Business Week Daily 0:00:18.880 --> 0:00:22.960 with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:23.400 --> 0:00:26.320 Hi, everyone, Welcome to the weekend edition of Bloomberg Business Week. 0:00:26.560 --> 0:00:28.680 Earning season is not quite done yet. A lot of 0:00:28.680 --> 0:00:32.520 consumer facing companies out with results, including Wayfair and Walmart. 0:00:32.760 --> 0:00:33.680 This past week. 0:00:33.960 --> 0:00:36.879 We catch up with Wayfair CFO Kate Gulliver on the 0:00:36.880 --> 0:00:39.279 supply chain and how consumers are spending. 0:00:39.120 --> 0:00:42.760 The world's largest physical retailer reported to This week, Walmart 0:00:42.800 --> 0:00:46.520 issued a forecast for full year earnings that missed higher expectations, 0:00:46.560 --> 0:00:50.240 flagging the unpredictable state of trade and labor market conditions. 0:00:50.760 --> 0:00:53.040 We go around the retail space with a great analyst 0:00:53.080 --> 0:00:56.040 and look at how retailers are keeping customers interested and 0:00:56.120 --> 0:00:58.560 how they're using technology to keep up with demand and 0:00:58.640 --> 0:00:59.640 compete with Amazon. 0:00:59.720 --> 0:01:02.200 Plus, President Trump has called bluff on the era of 0:01:02.240 --> 0:01:05.760 the good corporate citizen. Leaders of businesses from Hilton to 0:01:05.840 --> 0:01:09.760 home Depot and more have been largely silent, demuring or 0:01:09.800 --> 0:01:13.160 hedging when prompted to criticize the President Trump, we talk 0:01:13.400 --> 0:01:15.240 corporate complicity, and in. 0:01:15.120 --> 0:01:18.559 Our second hour pop music sensation Bad Bunny driving people 0:01:18.640 --> 0:01:21.640 to learn Spanish, we catch up with the CEO of Babbel. 0:01:21.840 --> 0:01:24.360 We begin with earnings and a read on the consumer 0:01:24.480 --> 0:01:27.680 thanks to Wayfair CFO Kate Gulliver, who shared what her 0:01:27.720 --> 0:01:30.399 company's earnings can tell us about the health of the 0:01:30.440 --> 0:01:31.280 shopping public. 0:01:31.520 --> 0:01:33.920 Maybe let's step back and sort of speak to the 0:01:33.959 --> 0:01:36.840 quarter we just reported, and I'm happy to shift a guidance. 0:01:37.680 --> 0:01:39.760 You know, we feel really great about the quarter we 0:01:39.920 --> 0:01:42.880 just reported. I think it highlighted and capped off a 0:01:42.959 --> 0:01:45.959 year of incredible momentum for us. We opened up the 0:01:46.000 --> 0:01:48.200 year flat, we you know, exit of the year at 0:01:48.200 --> 0:01:51.080 seven percent, revenue growth eight percent, you know, managing for 0:01:51.120 --> 0:01:54.720 the exit of Germany, and we flowed through to improved 0:01:55.280 --> 0:01:58.000 EBITDA grew year over year about sixty percent. Right, So 0:01:58.480 --> 0:02:02.640 we're seeing both ongoing market share gains and improved profitability. 0:02:03.040 --> 0:02:05.800 And that story continues with our guide into Q one. 0:02:06.640 --> 0:02:08.640 We feel really good about the guide. The you know, 0:02:08.720 --> 0:02:12.000 mid single digits revenue growth and improved to justin Ebata 0:02:12.120 --> 0:02:14.640 throughout the quarter. So you know, when we look at it, 0:02:14.639 --> 0:02:16.520 we feel that we produced pretty strong results. 0:02:17.040 --> 0:02:18.960 Yeah, I mean you look at the quarter, I mean 0:02:19.160 --> 0:02:22.240 just at EPs, better than what the street was expecting, 0:02:22.760 --> 0:02:26.560 just at Ebada, as you said, coming in stronger, net 0:02:26.680 --> 0:02:31.120 revenue up about seven percent year over year, gross margin, 0:02:31.800 --> 0:02:34.600 coming in better than the street estimate. There were a 0:02:34.600 --> 0:02:37.359 lot to do. So maybe we talk a little bit 0:02:37.440 --> 0:02:40.239 about you know, I am curious. You know, you guys 0:02:40.240 --> 0:02:41.840 have dealt with the call and so on and so forth. 0:02:41.880 --> 0:02:43.919 What are you hearing from the investment community that they're 0:02:43.960 --> 0:02:45.240 not just so comfortable with Kate. 0:02:46.480 --> 0:02:49.120 Yeah, you know, actually, you know, as we talked to investors, 0:02:49.160 --> 0:02:51.480 I think again they're they're pleased with the momentum that 0:02:51.520 --> 0:02:55.400 we see here. You know, obviously we're in a category 0:02:55.440 --> 0:02:58.360 that has been under pressure, right, so the category itself, 0:02:59.000 --> 0:03:02.120 we think was downlows digits in the fourth quarter, you know, 0:03:02.160 --> 0:03:04.280 to your earlier questions sort of around whether in the 0:03:04.280 --> 0:03:07.200 first quarter, we do think the category has been impacted 0:03:07.200 --> 0:03:09.680 in the first quarter of this year, you know, likely 0:03:09.760 --> 0:03:12.440 you know, download single digits again, maybe slightly worse even 0:03:12.440 --> 0:03:15.680 than Q four. So there's certainly some complexity in the 0:03:15.760 --> 0:03:18.680 overall category here. You know, what can we focus on? 0:03:18.760 --> 0:03:20.440 We can focus on what we can control, and our 0:03:20.480 --> 0:03:23.320 share gain continues to be a real source of strength. 0:03:23.360 --> 0:03:26.360 You see us outstripping a category by several points, right, 0:03:26.680 --> 0:03:29.640 and that's continued, you know, Q three, Q four and 0:03:29.639 --> 0:03:31.400 then again into the guide in Q one. 0:03:31.400 --> 0:03:33.240 And we should point out that investors have been really 0:03:33.320 --> 0:03:35.360 keen on your stock, I mean, nearly doubling over the 0:03:35.360 --> 0:03:37.800 past year. Kate, let me just go to what you said. 0:03:37.960 --> 0:03:41.400 I mean, maybe it is those concerns about some softer 0:03:41.680 --> 0:03:45.600 active customer trends kind of early on in the first quarter. 0:03:45.640 --> 0:03:48.120 Do you give us an idea of what you're seeing 0:03:48.200 --> 0:03:51.000 in any idea or can you tell us if it continues? 0:03:51.600 --> 0:03:54.200 It's a great question. So active customers is one of 0:03:54.200 --> 0:03:58.360 our reported KPIs. It's actually a lagging indicator. Okay, that 0:03:58.640 --> 0:04:01.760 metric is l active customers. So anyone who'd sort of 0:04:01.760 --> 0:04:04.840 placed an order within the last twelve months, and as 0:04:05.640 --> 0:04:08.640 orders grow, and you do see that order volume grew 0:04:08.880 --> 0:04:12.320 in Q three and in Q four, that sort of 0:04:12.400 --> 0:04:15.320 precedes active customer growth. The other thing I do just 0:04:15.320 --> 0:04:17.240 want to point out there is we did exit in 0:04:17.320 --> 0:04:19.440 January of last year or German Business, So that took 0:04:19.440 --> 0:04:21.800 a large chunk of customers or not a large chunk, 0:04:21.800 --> 0:04:24.320 but a chunk of customers out of that number. And 0:04:24.360 --> 0:04:26.599 so as you're looking at that active customer number, you know, 0:04:26.680 --> 0:04:29.599 obviously that came out, so we'll clear that comp you know, 0:04:29.640 --> 0:04:32.200 we exited that in January of this past year. 0:04:32.520 --> 0:04:34.880 You did say the sector has been under pressure, and 0:04:34.960 --> 0:04:37.880 Carol mentioned some of the peers, but what about the 0:04:37.920 --> 0:04:41.800 Wayfair consumer. When they're buying something on the platform right now, 0:04:41.880 --> 0:04:45.080 are they buying it because they need to replace something 0:04:45.240 --> 0:04:47.200 in their home. Are they buying it because they have 0:04:47.440 --> 0:04:51.000 extra money to upgrade something. What's the profile of the 0:04:51.000 --> 0:04:53.440 consumer and in other words, how is the consumer doing. 0:04:54.080 --> 0:04:56.120 It's a great question. We're seeing a few trends. So 0:04:56.480 --> 0:04:59.320 you mentioned some of the sort of luxury peers. Obviously, 0:04:59.360 --> 0:05:01.640 we have high end brands that do compete with those players, 0:05:01.680 --> 0:05:05.880 like a paragold or specialty retail brand. The Wayfair brand itself, 0:05:06.080 --> 0:05:08.159 you know, plays all the way from opening price point 0:05:08.240 --> 0:05:11.560 to you know, upper end mass, so really spans the 0:05:11.600 --> 0:05:15.040 full range, and we have seen, you know, a divergence 0:05:15.080 --> 0:05:17.720 some of that ke shaped economy. I'm sure we've all 0:05:17.760 --> 0:05:21.080 been talking about now for a bit. Certainly our paragold 0:05:21.120 --> 0:05:25.000 brand or specialty retail brands are growing, you know, really 0:05:25.040 --> 0:05:27.400 north of twenty percent we said in twenty twenty five, 0:05:27.440 --> 0:05:30.159 so you can see that accelerating beyond you know, the 0:05:30.200 --> 0:05:32.919 overall core business. And I think that speaks to the 0:05:32.920 --> 0:05:36.320 strength and that you know, higher net worth consumer. We 0:05:36.440 --> 0:05:38.159 also do see a bit of a divergence in the 0:05:38.200 --> 0:05:41.520 types of things that people are buying. When I talk 0:05:41.560 --> 0:05:44.599 about the category being down low single digits, that's a 0:05:44.640 --> 0:05:48.839 category overall. We actually think furniture or bigger ticket items 0:05:48.920 --> 0:05:51.880 are down more. That tends to actually be where we 0:05:52.040 --> 0:05:54.280 you know, are more focused and have a bigger part 0:05:54.279 --> 0:05:56.920 of the business. But you know, we also of course 0:05:56.960 --> 0:06:00.360 sell decorative accent, seasonal decor. That part of the business 0:06:00.360 --> 0:06:03.040 seems to have done a bit better from a category 0:06:03.120 --> 0:06:07.240 perspective overall, So those would be lower ticket items you know, 0:06:07.240 --> 0:06:09.920 that may feel more comfortable for folks to purchase right now. 0:06:10.080 --> 0:06:11.760 Well, and one the other thing I want to ask 0:06:11.800 --> 0:06:15.000 you and listen, Kate, we're obsessed with this the buy now, 0:06:15.080 --> 0:06:18.000 pay later, and you can do that on Wayfair too. 0:06:18.040 --> 0:06:19.520 Are you seeing an uptick in that. 0:06:20.960 --> 0:06:23.320 You know, we have a number of options, you know, 0:06:23.400 --> 0:06:26.120 for various financings and buy now pay laters. We work 0:06:26.120 --> 0:06:28.640 with a wide range of partners. I do think it's 0:06:28.640 --> 0:06:31.240 an important offering for the consumer, so you know, to 0:06:31.560 --> 0:06:34.039 you know, sort of sort of ensure good underwriting for 0:06:34.120 --> 0:06:36.320 folks and provide them with a lot of optionality. I 0:06:36.360 --> 0:06:39.880 would say our penetration there has been lower than other 0:06:40.040 --> 0:06:43.479 more traditional brick and brick and mortar furniture retailers, So 0:06:43.839 --> 0:06:46.039 you know, as we grow, we're really trying to get 0:06:46.080 --> 0:06:48.479 to you know, sort of a more natural place there 0:06:48.520 --> 0:06:50.120 for the furniture industry overall. 0:06:50.279 --> 0:06:53.920 We're speaking with Kate Goliver, CFO of Wayfair, joining us 0:06:53.960 --> 0:06:54.640 from Boston. 0:06:55.680 --> 0:06:57.200 You know, Kate, one of the other things that we've 0:06:57.200 --> 0:06:59.719 talked with you about is the physical stores, and you 0:06:59.800 --> 0:07:04.400 have noticed some encouraging early performance from the physical stores 0:07:04.440 --> 0:07:07.120 when it comes to brand engagement and cross channel lift. 0:07:07.520 --> 0:07:09.800 As you think about or as you kind of move 0:07:09.840 --> 0:07:13.320 from proof of concept to a potential expansion, what specific 0:07:13.360 --> 0:07:16.120 performance thresholds are you kind of focusing on and would 0:07:16.160 --> 0:07:19.600 justify accelerating the physical store growth. 0:07:20.280 --> 0:07:22.480 Yeah, it's a great question. So we look at the 0:07:22.520 --> 0:07:26.240 economics of the store itself, so purchases that are directly 0:07:26.280 --> 0:07:30.160 attributable to the store, and the economics of you know, 0:07:30.200 --> 0:07:32.840 operating that store. So as you think about the overall store, 0:07:32.960 --> 0:07:35.119 four wall, P and L. But one of the unique 0:07:35.160 --> 0:07:37.400 things about you know, building stores who already have a 0:07:37.440 --> 0:07:40.000 well established e commerce brand is you do get to 0:07:40.040 --> 0:07:42.920 see a benefit in the area for the brand overall. 0:07:43.200 --> 0:07:45.080 So the other thing that we look at is, you 0:07:45.080 --> 0:07:47.240 know what in sort of industry partlance you might call 0:07:47.280 --> 0:07:50.200 the halo effect, but really sales that are attributable to 0:07:50.320 --> 0:07:53.160 folks that maybe came into the store and then you know, 0:07:53.320 --> 0:07:55.600 left and went and bought something, or you know, had 0:07:55.640 --> 0:07:57.720 an idea about the store being in the area because 0:07:57.720 --> 0:07:59.720 they've heard more about it and therefore then shopped and 0:07:59.760 --> 0:08:02.240 or rep platform. And we've seen that continue to hold 0:08:02.320 --> 0:08:05.160 in really nicely. We gave a stat in our updated 0:08:05.200 --> 0:08:09.000 investor presentation today that the first store, which is in Chicago, 0:08:09.280 --> 0:08:12.560 if you look at the entire state of Illinois versus 0:08:12.560 --> 0:08:15.480 the rest of the country since the store opened, it's 0:08:15.520 --> 0:08:17.840 had a ten percent cag or higher than the rest 0:08:17.880 --> 0:08:19.920 of the country. Wow, And that gives you a sense 0:08:19.960 --> 0:08:21.720 of you know, the momentum that you can get from 0:08:21.720 --> 0:08:24.560 the store. It's obviously very crude metric, but it's an 0:08:24.600 --> 0:08:26.560 easy way to sort of explain it. So we really 0:08:26.600 --> 0:08:29.000 look at the combination of the store, P and L 0:08:29.360 --> 0:08:31.880 and then the other benefits that come along with having 0:08:31.920 --> 0:08:32.320 the store. 0:08:32.360 --> 0:08:34.199 Well, that makes me want to follow, Like what metrics 0:08:34.200 --> 0:08:36.800 would cause you to maybe remain a little bit more cautious, 0:08:36.840 --> 0:08:38.920 So like if you open another store and the metrics 0:08:38.960 --> 0:08:43.079 aren't so you're not seeing that kind of momentum that 0:08:43.080 --> 0:08:45.320 you're getting in the Chicago store, Wed just just say, Okay, 0:08:45.520 --> 0:08:47.319 maybe it just depends on the city of the environment, 0:08:47.360 --> 0:08:49.280 Like there's a lot of specifics that can go into it. 0:08:50.080 --> 0:08:51.840 Yeah, you know, I think our focus right now is 0:08:51.880 --> 0:08:54.200 on learning more about what makes a great store. 0:08:54.320 --> 0:08:55.160 Right So, we. 0:08:55.160 --> 0:08:57.440 Have one store open. We're planning to open three more 0:08:57.440 --> 0:08:59.319 in twenty six. We have one opening soon in the 0:08:59.320 --> 0:09:02.800 Atlanta air another one this summer in Columbus, and then 0:09:02.880 --> 0:09:05.960 in the fall and Denver. These will be, you know, 0:09:06.080 --> 0:09:09.160 the Columbus store, for example, seventy thousand square feet versus 0:09:09.480 --> 0:09:11.800 the you know, other stores are roughly around one hundred 0:09:11.840 --> 0:09:13.760 and fifty thousand square feets. So we're testing out a 0:09:13.800 --> 0:09:17.640 slightly smaller format. We're testing out different types of shopping 0:09:17.760 --> 0:09:20.280 areas where we put the store, and so we intend 0:09:20.280 --> 0:09:22.800 to learn and then continue to refine the store model 0:09:22.840 --> 0:09:25.080 based on those learnings. So let me do you know, 0:09:25.080 --> 0:09:26.880 we are quite excited about it as a channel. 0:09:27.120 --> 0:09:29.520 Hey, let's go from sort of like the old school 0:09:29.800 --> 0:09:33.360 store retail model to than what you're doing with AI and. 0:09:33.400 --> 0:09:35.760 Layers stores old school, So. 0:09:35.840 --> 0:09:39.520 They are I mean cutting back with channel. 0:09:39.600 --> 0:09:42.680 We like the overall omni channel experience, but how. 0:09:42.520 --> 0:09:46.720 Do you layer in personalization with AI? And I'm curious 0:09:46.800 --> 0:09:49.080 how you do that in a way that actually makes 0:09:49.120 --> 0:09:51.559 you more competitive in this area. 0:09:52.000 --> 0:09:55.040 Yeah, we're we're really excited about what we can do 0:09:55.120 --> 0:09:58.559 with AI from the customer experience perspective, and we've already 0:09:58.559 --> 0:10:00.480 started some of that and pilot with that on the 0:10:00.520 --> 0:10:02.360 site and there's certainly more to come there. 0:10:02.559 --> 0:10:02.760 You know. 0:10:02.840 --> 0:10:04.840 I think this category is a bit unique in that 0:10:04.920 --> 0:10:10.040 respect because it's a category that is a highly emotive category. Right, 0:10:10.040 --> 0:10:12.920 it feels very personal to folks. It's not a commodity 0:10:13.200 --> 0:10:16.880 category where you're doing sort of standard replenishment. You want 0:10:16.880 --> 0:10:19.559 to get a better sense and see the actual options 0:10:19.559 --> 0:10:23.000 out there. The brand is important, you know, our brand 0:10:23.040 --> 0:10:25.840 is important because you want to ensure the delivery experience 0:10:25.880 --> 0:10:28.679 is high quality. So we think that the category itself 0:10:28.800 --> 0:10:31.439 lends itself to bringing people to our site and engaging 0:10:31.480 --> 0:10:33.600 them in a unique way. One thing that we can 0:10:33.640 --> 0:10:36.920 do with AI is help get more personalized for your 0:10:37.040 --> 0:10:39.400 style preferences. You know, I'm sure if the three of 0:10:39.480 --> 0:10:41.240 us were to pick an end table, we'd all pick 0:10:41.320 --> 0:10:43.839 different end tables. What we'd love to do is make 0:10:43.880 --> 0:10:46.240 sure that when we land on the site, we're serving 0:10:46.320 --> 0:10:48.240 up to each of us exactly that end table that 0:10:48.280 --> 0:10:51.079 we want. Generative AI allows us to do that in 0:10:51.120 --> 0:10:53.720 a faster, more nimble way. It also allows you to 0:10:53.720 --> 0:10:55.560 pay around a discovery So if you were to go 0:10:55.600 --> 0:10:59.360 on the app today into the discovered tab, you'd see 0:10:59.400 --> 0:11:02.559 a whole images and you can create more yourself if 0:11:02.559 --> 0:11:05.800 you want that. Are you know Jenny I created that? 0:11:05.880 --> 0:11:08.120 Then allow you to shop the catalog based on the 0:11:08.120 --> 0:11:10.760 type of room that you're designing or the aesthetic look 0:11:10.800 --> 0:11:12.920 that you're looking for. And I think that kind of 0:11:13.320 --> 0:11:16.959 engagement and interaction is really compelling in this category. 0:11:17.160 --> 0:11:19.640 So I know, Kate, if we had asked Tim, like, 0:11:19.720 --> 0:11:23.120 if we were going you, me and him shopping for pillows, 0:11:23.120 --> 0:11:26.640 you know he would say, no more pillows. I don't 0:11:26.640 --> 0:11:28.280 know about your household, but that's what happens in my 0:11:28.320 --> 0:11:29.319 house anyway. 0:11:30.240 --> 0:11:33.120 What originally people have an insatiable demand for pillows, so 0:11:33.120 --> 0:11:34.280 we will keep telling. 0:11:34.000 --> 0:11:35.400 Them, Thank God, thank God. 0:11:35.559 --> 0:11:36.160 That's wayfair. 0:11:36.240 --> 0:11:39.120 CFO Kate go over coming up around the world of 0:11:39.160 --> 0:11:41.520 retail with someone who knows it like no other. 0:11:42.080 --> 0:11:45.240 You're listening to Bloomberg Business Week. This is Bloomberg. 0:11:48.880 --> 0:11:53.040 This is Bloomberg Business Week Daily with Carol Masser and 0:11:53.120 --> 0:11:55.680 Tim Steneveek on Bloomberg Radio. 0:11:56.640 --> 0:11:58.800 We've been focusing a lot on the k shaped economy 0:11:58.840 --> 0:12:02.600 on Bloomberg BusinessWeek Daily. Retail always gives a great look 0:12:03.120 --> 0:12:06.600 on this. Delinquency rates, for example, on loans ranging from 0:12:06.640 --> 0:12:09.040 mortgages to credit cards, rose to four point eight percent 0:12:09.040 --> 0:12:12.320 of all outstanding US household debt in the fourth quarter. 0:12:12.640 --> 0:12:15.840 That is the highest level since twenty seventeen, driven by 0:12:15.920 --> 0:12:18.600 higher defaults among low income and young borrowers. 0:12:18.800 --> 0:12:22.720 These data com as US retail sales unexpectedly stalled in December, 0:12:22.840 --> 0:12:26.199 suggesting consumers provided less firepower for the economy as the 0:12:26.280 --> 0:12:29.400 year drew to a close. Dana Telsea is founder, CEO, 0:12:29.480 --> 0:12:32.920 and chief Research officer of Telsey Advisory Group. She joined 0:12:33.000 --> 0:12:36.000 us to discuss all things retail one caveat. We caught 0:12:36.080 --> 0:12:40.079 up with her before Walmart reported results more broadly. 0:12:39.720 --> 0:12:41.520 Like Tim said, we did kind of want to start 0:12:41.520 --> 0:12:43.800 a little bit broad with you. I mean, we got 0:12:44.760 --> 0:12:48.920 US retail sales unexpectedly stalling in December, suggesting consumers provided 0:12:49.000 --> 0:12:51.240 less firepower for the economy as the year drew to 0:12:51.240 --> 0:12:56.040 a close. On that print, did your own analysis, Dana, 0:12:56.360 --> 0:12:58.480 you know you do great channel checks and you have 0:12:58.920 --> 0:13:00.280 all your own research. 0:13:00.400 --> 0:13:02.800 Did it match up with what we saw? We saw 0:13:02.840 --> 0:13:07.320 a solid holiday season, we've seen four It was weaker 0:13:07.760 --> 0:13:11.600 after Black Friday to Christmas. It only picked up like 0:13:11.640 --> 0:13:14.440 the week before Christmas. The lull in the middle was 0:13:14.480 --> 0:13:18.240 deeper than expected coming out of January to Now. Keep 0:13:18.280 --> 0:13:21.200 in mind we've had terrible weather, you know, a better 0:13:21.240 --> 0:13:24.400 from the Northeast than the Midwest. People getting out pretty tough, 0:13:24.600 --> 0:13:26.839 and it was all about colder weather goods. So it's 0:13:26.960 --> 0:13:29.520 up and down. But I don't think anything is taking 0:13:29.559 --> 0:13:32.480 away from what we call the measured optimism in the 0:13:32.480 --> 0:13:35.360 consumer space. Whereas when you think about the events this 0:13:35.520 --> 0:13:40.360 year Winter Olympics, America, two fifty World Cup, all coming up, 0:13:40.400 --> 0:13:43.959 in tax refunds which are just starting now. Consumer has 0:13:44.000 --> 0:13:47.680 a lot of firepower to spend, and we're watching carefully 0:13:47.720 --> 0:13:49.960 the lower end. We just came out with our credit 0:13:50.000 --> 0:13:53.760 monitor this week, the credit monitor, which shows delinquencies are 0:13:53.800 --> 0:13:56.640 still on the rise, bad debt being impacted. You have 0:13:56.679 --> 0:14:00.240 student loans out there, so it's still upticking, but not 0:14:00.320 --> 0:14:03.720 at a real accelerated pace. It's something to be mindful of. 0:14:03.960 --> 0:14:06.120 What when would you go from being mindful of it 0:14:06.160 --> 0:14:07.200 to being concerned about it? 0:14:07.280 --> 0:14:09.400 If I heard about a slowdown in sales from all 0:14:09.440 --> 0:14:11.920 the different types of retailers. I mean, I think this year, 0:14:11.960 --> 0:14:15.360 could it be a discretionary year. We've had legacy companies 0:14:15.440 --> 0:14:19.160 like Victoria's Secret, like urban outfitters like The Gap do better. 0:14:19.440 --> 0:14:23.080 Why Because there's newness and product newness and store designs 0:14:23.360 --> 0:14:26.200 making it very compelling. So I'm watching some of these 0:14:26.240 --> 0:14:29.240 sales figures to see that are they able to maintain 0:14:29.280 --> 0:14:33.640 the expectations. What's gone more into the back burner. The 0:14:33.800 --> 0:14:36.840 waning impact of tariffs. Tariffs will be an impact for 0:14:36.880 --> 0:14:39.240 the first quarter but they won't be as big an 0:14:39.280 --> 0:14:42.600 impact through the year, and the continued focus on newness 0:14:42.800 --> 0:14:45.720 means companies are putting out newer products you don't have 0:14:45.760 --> 0:14:48.040 a comparison, so the price is maybe higher than they 0:14:48.040 --> 0:14:48.880 originally would have been. 0:14:49.000 --> 0:14:50.840 I want to go back to the consumer credit picture 0:14:50.840 --> 0:14:53.440 and delinquencies, because on the same day we got that 0:14:53.960 --> 0:14:58.480 retail sales report, we got delinquency rates on loans rising 0:14:58.480 --> 0:15:00.280 to four point eight percent of them all that standing 0:15:00.400 --> 0:15:01.880 US household debt in the fourth Court, that was the 0:15:01.920 --> 0:15:04.360 highest level since twenty seventeen. I hear something like that, 0:15:04.400 --> 0:15:06.440 and that's almost ten years. It makes me be like, 0:15:06.480 --> 0:15:09.760 whoa wait, is that impressive? I mean, is it impressive? 0:15:09.840 --> 0:15:11.720 Like you, how do you make sense that? I think 0:15:11.720 --> 0:15:15.240 they talked a lot about delinquencies and mortgage payments, particularly 0:15:15.280 --> 0:15:18.400 the lower income zip codes. Student loan delinquencies, like that's 0:15:18.440 --> 0:15:19.360 a real factor. 0:15:19.800 --> 0:15:22.440 They are real factors. It's very important to watch. That's 0:15:22.440 --> 0:15:25.200 why let's see what these tax refunds come in, because 0:15:25.240 --> 0:15:27.760 what will be used for some of the debt paydown 0:15:27.760 --> 0:15:28.440 that's out there. 0:15:28.520 --> 0:15:30.680 But to be fair, like student loans, if you've got 0:15:30.720 --> 0:15:33.520 student debt, how much of you're going to get in 0:15:33.560 --> 0:15:35.440 attack refunds is really going to make a debt. 0:15:35.880 --> 0:15:37.920 It doesn't make as much a debt. Okay, but a 0:15:37.960 --> 0:15:40.240 lot of times parents will pay off some of those 0:15:40.240 --> 0:15:42.920 student loans. So it depends who's doing those payments of 0:15:42.960 --> 0:15:43.400 the loans. 0:15:43.480 --> 0:15:46.920 Okay, what I was thinking about the cost of education. 0:15:47.440 --> 0:15:50.120 Yeah, by the time you go to be a million 0:15:50.160 --> 0:15:52.040 dollars a year, I just have the bots. 0:15:52.120 --> 0:15:52.440 Do you a. 0:15:52.400 --> 0:15:53.960 Plumber, be a electrician? 0:15:54.120 --> 0:15:54.960 I'm just saying, ok. 0:15:55.520 --> 0:15:56.960 Hey, I want to talk a little bit about the 0:15:56.960 --> 0:15:59.320 Olympics that are going on right now and sort of 0:15:59.440 --> 0:16:01.520 what it means in a world where media is so 0:16:01.600 --> 0:16:03.880 fraction and you don't have the same appointment viewing that 0:16:03.920 --> 0:16:05.840 we had the same idea of, you know, the big 0:16:05.880 --> 0:16:08.720 companies getting in front of everyone. We had Nike CEO 0:16:08.800 --> 0:16:11.480 on last week talking about a return to ACG and 0:16:11.480 --> 0:16:13.880 making a big push at the Olympics. How do you 0:16:13.960 --> 0:16:16.080 watch an event like the Olympics when it comes to retail. 0:16:16.120 --> 0:16:17.960 I think when you think about retail and who what 0:16:18.160 --> 0:16:21.080 brands are involved in the Olympics, I mean Ralph Lauren 0:16:21.280 --> 0:16:21.800 big time. 0:16:21.960 --> 0:16:24.120 You love it. You talk about Ralph Lauren a lot. 0:16:24.240 --> 0:16:26.320 Yeah, Well, you know why full price. If you look 0:16:26.360 --> 0:16:28.840 at the average unit retail selling prices, it's going up. 0:16:29.080 --> 0:16:29.520 You have a. 0:16:29.480 --> 0:16:32.480 Smaller brand who is doing good things with Olympics. This 0:16:32.560 --> 0:16:35.760 is their second Olympics they've been involved with. Figgs is 0:16:35.840 --> 0:16:39.600 outfitting the USA team, USA Medical Team, and that's something 0:16:39.640 --> 0:16:43.120 that they're becoming known for. I think there is awareness 0:16:43.120 --> 0:16:45.320 that comes from being part of the Olympics. I think 0:16:45.360 --> 0:16:47.480 people are watching the Olympics, even though some of the 0:16:47.480 --> 0:16:51.400 different time zones Winter Olympics. Whether it's figure skating, whether 0:16:51.400 --> 0:16:53.720 it's the loge, you name it there and there's a 0:16:53.760 --> 0:16:56.920 lot of good USA athletes that have done a really 0:16:56.920 --> 0:16:57.360 good job. 0:16:57.440 --> 0:16:59.359 Does it still move product, Yes. 0:16:59.280 --> 0:17:01.640 It moves and people want to be a part of it. 0:17:01.960 --> 0:17:04.479 Even just walk by store windows and you'll see product 0:17:04.480 --> 0:17:05.440 out there for the Olympics. 0:17:05.520 --> 0:17:08.880 So against all of this, you know, the Sachs bankruptcy, 0:17:08.960 --> 0:17:12.320 I know it was expected. Eddie Bauer been around for 0:17:12.359 --> 0:17:13.800 a long time. I feel like it's been twisting in 0:17:13.840 --> 0:17:17.240 the winds for a while. Store closing is of all Birds. 0:17:17.280 --> 0:17:18.680 I mean I found my pair of All Birds. I 0:17:18.680 --> 0:17:20.520 haven't been wearing them much, but I. 0:17:20.440 --> 0:17:23.119 Mean Francesca is another one. 0:17:22.720 --> 0:17:25.080 Significant or it's just the cyclical nature. 0:17:24.760 --> 0:17:27.520 Cickleical wave. When you think about what others are doing 0:17:27.560 --> 0:17:30.439 out there, more stores are opening their own brands. You 0:17:30.520 --> 0:17:33.840 have companies like Aritzia, who's gaining share only seventy two 0:17:33.880 --> 0:17:37.560 stores in the United States. So if old doesn't reinvent, yeah, 0:17:37.560 --> 0:17:40.080 they're going away. And that's why I mentioned before, look 0:17:40.080 --> 0:17:43.600 at Legacy that's reinventing urban outfit is Victoria's secret in 0:17:43.640 --> 0:17:44.040 the gap? 0:17:45.040 --> 0:17:50.119 What No, it's like it's fascinating to see because I 0:17:50.160 --> 0:17:52.720 agree with you that things are just going to change, right, 0:17:52.760 --> 0:17:55.199 it doesn't mean when we see it closing, it's going 0:17:55.280 --> 0:17:56.680 to be the end of a reg Well. 0:17:56.680 --> 0:17:59.320 The other thing talking about the retail real estate landlords, 0:17:59.520 --> 0:18:02.480 Simon Property, largest small developer in the country, just put 0:18:02.480 --> 0:18:05.200 out their results last week and you can hear from 0:18:05.280 --> 0:18:08.320 all the other landlords out there. There is more demand 0:18:08.359 --> 0:18:11.920 for space than supply. So even with the fifty seven 0:18:12.040 --> 0:18:14.520 or so sacks off fifth closings, the eight or nine 0:18:14.520 --> 0:18:17.200 full line closings, there's demand for this space. 0:18:17.359 --> 0:18:19.480 Is it high end though, that's always demand when it 0:18:19.520 --> 0:18:20.600 comes to malls or not. 0:18:20.560 --> 0:18:23.000 Necessarily because you take a look at things like look 0:18:23.040 --> 0:18:26.160 at the off pricers the TJ Max Ross stores Burlington. 0:18:26.200 --> 0:18:29.120 They're each opening one hundred stores a year. Restaurants are 0:18:29.119 --> 0:18:33.240 opening new stores. Look at the dollar stores, the Dollar Generals, 0:18:33.280 --> 0:18:34.720 Dollar Trees, they're. 0:18:34.520 --> 0:18:36.719 Also We just did a story about how they're opening 0:18:36.800 --> 0:18:41.480 increasingly in wealthier areas and because the wealthier or higher 0:18:41.600 --> 0:18:44.560