Poonam Goyal on Black Friday (Audio)

are awaiting the deals that are about set com. We were in stores earlier today and I'll be honest, you know, a lot of the story said this is our deal for the next five days. So it'll be interesting to see what additional deals get added. We know Walmart and Target have specific class Black Friday deals in solo Amazon, but them all look to have already set for Black Friday.

Maybe just pentump demand, uh, particularly in an age where we've been living through a pandemic and a lot of the brick and mortar business has has suffered as a consequence e commerce. Sure, not a problem with that, but talk to me a little bit about what we learn in this week. When best Buy reported the stock was up yesterday nearly and then on top of that, it was Ambercrobbie and Fitch with a gain in those shares, and American Eagle joined in as well with a fifty

check that eighteen percent move. So these numbers, even before we get to the the fourth quarter, the numbers for Q three were above estimates. Yeah, I think you're really seeing a mixedpatch here. For the retailers that you mentioned, it is somewhat kind of demand. If you think about where we spent our money over the last few years

during the pandemic, it wasn't really on apparel. When you think of the team retailers, right, if it was apparel, you were buying sweatpants and more comfortable clothes, um, yoga pants, etcetera. So people are going out more, they're traveling, they're going out to eat, they're going to show, they're spending money on themselves and as they do that, they want a new wardrobe. So that's helping apparel retailers to a large extent this year. Well, the thing is how does this

does this Is this indicative of a bigger picture? Is a one off? In your vie Puno, I think it's really mixed. You know, we we heard from pg X two and they said they had strong apparel sales, but their home good division division continues to not do well. Um. We also heard from other retailers like Target right where inventory was a big issue and markdowns. So I think it really goes retailer by retailer. Where there's excess inventory,

you're going to see more issues. Where inventory is getting right size and where they have the right products, they're able to sell it because the consumer is spending, they're just watching where they spend and how they spend. So it's just a little bifurcated right now. So are they still working off inventory that was accumulated during the pandemic.

There was a piece in the South China Morning Post indicating that the China there's already a drop in US exports to the US, and I'm wondering whether or not some of that is because US retailers still have bloated inventory that they're beginning or they're still unwinding. Yeah, that's definitely part of it. Keep in mind last year at this time, we didn't have enough inventory, and as that inventory started to trickle in earlier this year, it almost

all came at the same time. In addition to the new orders right that they placed for the spring and demand started to pull back a little. So it was like the perfect storm for the retailers where they had inventory from the prior year from this year and then a small pullback and demand all of that together way too much inventory. They're still trying to work throughout many

of them. They did take skeeper mark downs and they will continue to do so to make sure that they ended the season clean, because that's really important heading into after the holidays. What's the kind of balance between let's say the luxury end and the mass market end. Luxury is still on fire. I mean when you look at the really high end retailers, they're doing very variable. Demand is high, they're passing along price increases, they're being accepted.

Luxury doing very well. Mass is a bit of a mixed story. Um, it really comes back down to inventory. We saw the different Centuriet and Walmart's results just recently, where Walmart did better because it was a better inventory position. It had taken it smart down, cleared the inventory needed

to while Target was still working through it. So I think there's demand bill benefit from trade down to a certain extent, but if the value consumer pulls back in a meaningful way, they are at risk and targets more discretionary than Walmart. So you know that that kind of hurts in a value scheme when consumers are training down well.

To your point about the outlook, it was curious yesterday thehead of the Kansas City fed Esther George, was saying, you know that there is still so much ample US savings right now, and that's gonna help support household spending.

I take your point that people are beginning to move into areas that they haven't been comfortable occupying, and I'm talking about travel and maybe entertainment venues outside of the home, And to your point to that people need to be clothed to be able to have these experiences in ways that they were not closed during the pandemic. So is there a point that we should be concerned about in the future where savings begin to dwindle and people begin

to become a little more conservative in their spending. I think the savings have already dwindled. If you look at the savings rate from where we were two years ago, it's more than half of that. It's under four percent of savings rate today, and we are seeing the effect of that in the value stream right we that's where

there's been trade down where consumers are pulling back. We haven't seen it at luxury, but the value shopper is definitely challenged with insulation and tipping into their savings to meet their day to day each Yeah, that's it isn't and so that's having a profound impact that put them. You know, this maybe just off topic a little bit, but are you seeing a difference in where these uh these items I'm just going to talk basically about apparel clothing,

was it being made? Is it still elminated by China? So there has been a shift in sentiment by retailers, and it's not just through the pandemic. Even before the pandemic, retailers try to diversify a little out of China, whether it was going to Vietnam, Bonglazesi, or even South America, and that shift continue to be more aggressive during the pandemic when you know China was clearly under lockdown than an impacted production. Is China less of a dependence for

apparel retailers today that it was five years ago? Yes, but is enough of less of a dependence that you know they can live without China? Absolutely? Not. China is still one of the largest producing countries for many apparel retailers, including Nike and Adida, and I don't think that they'll ever be able to go entirely away from China. Yes, they can diversify a little, but China still going to be producing garments for us to consume for at least,

you know, the next few years or south. So much money was invested beginning in the nine nineties factories in China producing clothing and apparel items. Now we know that labor costs are rising on the mainland, and maybe that's one of the reasons that we have seen some of these companies source elsewhere. Pun I'm Goyle. Thank you so much for being with us here on Dabreakcasia.