1 00:00:00,080 --> 00:00:02,360 Speaker 1: Tomorrow we're going to get another read on the economy 2 00:00:02,360 --> 00:00:04,400 Speaker 1: with retail sales. So for more on that and how 3 00:00:04,440 --> 00:00:08,760 Speaker 1: consumers are feeling. We're joined now by awanaate a Cobina 4 00:00:08,840 --> 00:00:12,160 Speaker 1: Bedrock manufacturing company. CEO Bedrock is the parent of the 5 00:00:12,200 --> 00:00:16,080 Speaker 1: watch company Shinola Watches. Cobina is also a former White 6 00:00:16,079 --> 00:00:18,439 Speaker 1: House aid in the Obama administration. You got a lot 7 00:00:18,480 --> 00:00:22,079 Speaker 1: going on, Awanat, how is the consumer doing? Like, let's 8 00:00:22,160 --> 00:00:24,840 Speaker 1: rate this time for consumers, say to a year ago, 9 00:00:25,000 --> 00:00:25,520 Speaker 1: where are they? 10 00:00:26,920 --> 00:00:29,720 Speaker 2: I think relative to a year ago, we are in 11 00:00:29,760 --> 00:00:32,879 Speaker 2: a much better place than we were then. The consumer 12 00:00:32,920 --> 00:00:36,080 Speaker 2: a year ago is feeling all of the inflationary impacts, 13 00:00:36,440 --> 00:00:38,640 Speaker 2: and we've seen some of that softness in the market 14 00:00:38,680 --> 00:00:42,239 Speaker 2: continue through most of twenty twenty three. I describe it 15 00:00:42,240 --> 00:00:46,320 Speaker 2: as an uneven year for retail businesses like Shinola, but 16 00:00:46,640 --> 00:00:51,440 Speaker 2: we've seen some re emergence of the consumer late in 17 00:00:51,479 --> 00:00:54,960 Speaker 2: this holiday season. They're generally shopping later than they have 18 00:00:55,120 --> 00:00:58,120 Speaker 2: in the past. In previous years with some of the 19 00:00:58,200 --> 00:01:03,240 Speaker 2: stimuli that's been happening during COVID in succeeding years, they 20 00:01:04,360 --> 00:01:07,040 Speaker 2: really started shopping earlier. But this year, with all of 21 00:01:07,120 --> 00:01:10,800 Speaker 2: the promotions we've seen some consumer some consumers return to 22 00:01:11,200 --> 00:01:11,639 Speaker 2: the market. 23 00:01:13,720 --> 00:01:15,440 Speaker 3: Can I just say it's quite cool that you make 24 00:01:15,680 --> 00:01:17,760 Speaker 3: watches in America when obese, So I think that's something 25 00:01:17,760 --> 00:01:19,679 Speaker 3: that we don't often see. So cute us on that 26 00:01:19,760 --> 00:01:21,679 Speaker 3: and making them out of Detroit. There's something sort of 27 00:01:21,680 --> 00:01:25,040 Speaker 3: mechanical about Detroit that I think really works as well. 28 00:01:25,920 --> 00:01:28,160 Speaker 3: Were you raising prices this year? Did you raise prices 29 00:01:28,240 --> 00:01:29,720 Speaker 3: last year? Do you think you've got to be raising 30 00:01:29,720 --> 00:01:30,600 Speaker 3: prices next year? 31 00:01:32,120 --> 00:01:36,440 Speaker 2: So we raised prices on some items, but not on 32 00:01:36,680 --> 00:01:39,039 Speaker 2: the majority of our assortment, to be honest with you, 33 00:01:39,440 --> 00:01:42,520 Speaker 2: as we looked at where the consumers were relative to 34 00:01:42,600 --> 00:01:45,400 Speaker 2: last year and through the earlier part of this year. 35 00:01:45,480 --> 00:01:48,200 Speaker 2: Our busy season is a holiday season, like a lot 36 00:01:48,240 --> 00:01:51,520 Speaker 2: of retail businesses are. And as you know, we're in 37 00:01:51,560 --> 00:01:56,320 Speaker 2: a discretionary environment, right Our watches, our leather bags, our 38 00:01:56,360 --> 00:01:58,880 Speaker 2: jewelry or not something that people need. They are a 39 00:01:59,680 --> 00:02:02,440 Speaker 2: perch just that people consider, and so we did not 40 00:02:02,560 --> 00:02:05,200 Speaker 2: feel as if we could raise prices on the majority 41 00:02:05,240 --> 00:02:07,960 Speaker 2: for items. But as we go into twenty twenty four, 42 00:02:08,320 --> 00:02:11,640 Speaker 2: we are looking at items that were strong in twenty 43 00:02:11,680 --> 00:02:16,120 Speaker 2: three and looking to consider raising some of those prices on. 44 00:02:16,080 --> 00:02:18,640 Speaker 1: The flip side, you mentioned promotions around the holidays. How 45 00:02:18,720 --> 00:02:20,600 Speaker 1: much of your have you had to dig in for 46 00:02:20,680 --> 00:02:22,200 Speaker 1: promotions and what do you think you're going to see 47 00:02:22,280 --> 00:02:22,680 Speaker 1: next year? 48 00:02:24,480 --> 00:02:30,000 Speaker 2: We've unfortunately our brand was one that had never promoted 49 00:02:30,040 --> 00:02:33,400 Speaker 2: prior to this year. But luckily this is China is 50 00:02:33,480 --> 00:02:36,760 Speaker 2: tenth year in operation and we were looking to find 51 00:02:36,800 --> 00:02:39,799 Speaker 2: a way to really thank the consumer for being with 52 00:02:39,880 --> 00:02:43,440 Speaker 2: us for those ten years and their support for startup 53 00:02:43,560 --> 00:02:46,400 Speaker 2: like ours. Ten years is an important milestone, although we 54 00:02:46,440 --> 00:02:49,440 Speaker 2: want to get to twenty five and twenty five years 55 00:02:49,480 --> 00:02:52,000 Speaker 2: and then one hundred. So we did do a thank 56 00:02:52,040 --> 00:02:58,520 Speaker 2: you promotion that's currently running actually for consumers, which aligned 57 00:02:58,520 --> 00:03:01,839 Speaker 2: with the promotion promotion in the promotional environment that other 58 00:03:01,960 --> 00:03:02,640 Speaker 2: businesses are in. 59 00:03:02,760 --> 00:03:06,880 Speaker 3: Yep, why do you think people buy mechanical watches? We're 60 00:03:06,919 --> 00:03:11,120 Speaker 3: in a world of Apple watches and everything else that 61 00:03:11,200 --> 00:03:14,000 Speaker 3: seem to be taking over at the upper end. I 62 00:03:14,000 --> 00:03:17,000 Speaker 3: can understand the queute also of buying a Rolex or 63 00:03:17,000 --> 00:03:22,239 Speaker 3: a partake Partake What gives what gives people that the 64 00:03:22,639 --> 00:03:24,400 Speaker 3: reason to come to you and want to buy one 65 00:03:24,400 --> 00:03:25,200 Speaker 3: of your watches? 66 00:03:26,720 --> 00:03:29,519 Speaker 2: There's three reasons. One they're functional, right, but that does 67 00:03:29,560 --> 00:03:32,720 Speaker 2: not distinguish us from from the Apple Watch or other 68 00:03:32,760 --> 00:03:36,920 Speaker 2: products that are out there. Secondly, nostalgia. A lot of 69 00:03:36,960 --> 00:03:39,960 Speaker 2: people have been wearing watches for their entire lives, some 70 00:03:40,000 --> 00:03:43,880 Speaker 2: people have not, but it is an accessory that really 71 00:03:44,400 --> 00:03:47,000 Speaker 2: can help set up an outfit and make an outfit 72 00:03:47,080 --> 00:03:50,400 Speaker 2: look really good. And three for Shinola, I think people 73 00:03:50,400 --> 00:03:53,040 Speaker 2: come to us. As you mentioned earlier, we have the 74 00:03:53,080 --> 00:03:55,960 Speaker 2: first large scale watchmaking operation in the United States that's 75 00:03:56,000 --> 00:03:59,760 Speaker 2: been open in almost one hundred years, and so as 76 00:03:59,800 --> 00:04:02,720 Speaker 2: people think about where they're going to spend their money 77 00:04:02,720 --> 00:04:04,200 Speaker 2: and what they're going to spend it on, if they 78 00:04:04,280 --> 00:04:06,480 Speaker 2: want to look good, and that they want to contribute 79 00:04:06,480 --> 00:04:09,840 Speaker 2: to a region of the United States, Chinola is the 80 00:04:10,480 --> 00:04:11,160 Speaker 2: perfect purchase. 81 00:04:12,480 --> 00:04:14,920 Speaker 3: And there's been a lot made over the last year 82 00:04:15,000 --> 00:04:18,359 Speaker 3: or so. The Inflation Reduction Act, the Restoring Story the 83 00:04:18,360 --> 00:04:23,159 Speaker 3: Biden administration has pushed through to bring manufacturing back to 84 00:04:23,200 --> 00:04:26,400 Speaker 3: the United States. What do you make of that. Do 85 00:04:26,440 --> 00:04:29,880 Speaker 3: you think that's working. Do you think the programs that 86 00:04:29,920 --> 00:04:33,720 Speaker 3: the administration have pushed through are making a difference, and 87 00:04:34,440 --> 00:04:36,200 Speaker 3: what impact long term do you think those are going 88 00:04:36,279 --> 00:04:36,480 Speaker 3: to have. 89 00:04:38,200 --> 00:04:39,719 Speaker 2: I think in the long term there will be some 90 00:04:39,880 --> 00:04:44,279 Speaker 2: businesses that reshure and that bring manufacturing and production back 91 00:04:44,279 --> 00:04:46,880 Speaker 2: to the United States. The fact of the matter is 92 00:04:46,920 --> 00:04:50,640 Speaker 2: the American consumer likes things that are made in America 93 00:04:50,720 --> 00:04:53,800 Speaker 2: but are not on the whole, willing to pay much 94 00:04:53,920 --> 00:04:56,400 Speaker 2: more for them. You mentioned the Apple watch and some 95 00:04:56,520 --> 00:04:59,960 Speaker 2: of the other brands out there. Watch brands out there, 96 00:05:00,200 --> 00:05:02,880 Speaker 2: most of them, if all of them are not are 97 00:05:02,880 --> 00:05:06,960 Speaker 2: not produced in America. So as we look at what 98 00:05:07,040 --> 00:05:11,920 Speaker 2: the LGI station and those policies will do for the 99 00:05:11,960 --> 00:05:15,080 Speaker 2: watch industry and other production, I do think that businesses 100 00:05:15,160 --> 00:05:17,560 Speaker 2: like ours will look at what can we make here 101 00:05:17,720 --> 00:05:20,640 Speaker 2: affordably and what will the consumer pay for. 102 00:05:21,279 --> 00:05:23,600 Speaker 1: Before we let you go? It is FED day or 103 00:05:23,640 --> 00:05:26,440 Speaker 1: looking at potential outline for how the FED is going 104 00:05:26,480 --> 00:05:29,560 Speaker 1: to react to the economy next year, et cetera. The 105 00:05:29,600 --> 00:05:32,719 Speaker 1: way you view the economy through your lens, is this 106 00:05:32,760 --> 00:05:35,839 Speaker 1: a good economy? Is this economy that's slowing fast? Is 107 00:05:35,839 --> 00:05:37,720 Speaker 1: it one that may get into recession? How do you 108 00:05:37,760 --> 00:05:38,320 Speaker 1: think about it? 109 00:05:40,040 --> 00:05:42,120 Speaker 2: So I look at it personally, and I look at 110 00:05:42,120 --> 00:05:45,400 Speaker 2: the jobs numbers which are which are obviously so strong. 111 00:05:45,520 --> 00:05:49,159 Speaker 2: Consumer prices are continuing to increase, although at a slower 112 00:05:49,200 --> 00:05:51,240 Speaker 2: rate than they were last year, And then I think 113 00:05:51,279 --> 00:05:54,760 Speaker 2: about our businesses, right, the higher interest rates have it 114 00:05:54,800 --> 00:05:57,920 Speaker 2: an effect on our ability to invest invest in things 115 00:05:57,960 --> 00:06:00,560 Speaker 2: like manufacturing, which you just mentioned in the unit United States. 116 00:06:01,240 --> 00:06:04,120 Speaker 2: But when I think about the consumer, they want stability. 117 00:06:04,400 --> 00:06:08,200 Speaker 2: Most people are able to abably plan their finances if 118 00:06:08,200 --> 00:06:11,000 Speaker 2: they know what's coming tomorrow and next month and next year, 119 00:06:11,279 --> 00:06:13,800 Speaker 2: and so more than anything, I think that the consumer 120 00:06:14,120 --> 00:06:18,240 Speaker 2: wants stability. But the economy has approved over the last year, 121 00:06:18,279 --> 00:06:20,679 Speaker 2: and my hope is that it will continue to improve 122 00:06:21,360 --> 00:06:24,360 Speaker 2: at some point in twenty twenty four as well. 123 00:06:24,360 --> 00:06:25,960 Speaker 3: Oh and I say great to catch up. Thank you 124 00:06:26,040 --> 00:06:27,599 Speaker 3: very much in Dee spending some time with us today. 125 00:06:27,600 --> 00:06:29,279 Speaker 3: I want to ta kuld beIN a of the bedroad 126 00:06:29,320 --> 00:06:30,479 Speaker 3: manufacturing company.