Chief Research Officer and Founder at Telsey Advisory Group Dana Telsey Talks Investment Risks

SPEAKER_1 (0:02)

Bloomberg Audio Studios, podcasts, radio, news.

Tom Keene (0:07)

We need to be industrial.

Paul Sweeney (0:09)

Okay.

Tom Keene (0:10)

We need to go to Brooklyn in a brick building.

Everybody's earnest. They wear Japanese blue jeans that cost like $400 a piece. Dana Telsey joins us on the oddest story in New York this year. Hermes is like putting big money into industrial, oh so cool, craft gin and tonic cocktails. Brooklyn, really?

Dana Telsey (0:34)

Williamsburg, their store is opening there, very popular.

Tom Keene (0:38)

Very popular. You see proof of evidence that Mrs. Gura, I mean, just as one.

Dana Telsey (0:43)

Yep.

Tom Keene (0:43)

Okay, Stacey Vannick's coming up and Max, and I mean, these kind of people are walking into Hermes.

Dana Telsey (0:51)

Yes, they are. You look at the neighborhoods where they're going, they're going where the customer is aware of their brand name, and they're buying there.

Tom Keene (0:58)

You see evidence that this will be a success. They did a pop-up thing to test it.

Dana Telsey (1:02)

They did the pop-up to test it, but if you tested it and it did well, that's why you're opening a permanent store. Pop-ups are the entryway to a permanent store if you get the revenues you thought you got.

Tom Keene (1:12)

Why is luxury flat on its back right now? They're all cratering right now. Why? Particularly French luxury.

Dana Telsey (1:18)

Couple things. Number one, Europe consumer is very challenged lately. You're not getting tourists, and you're not getting the Chinese traveling. More Chinese are spending on some of their own local brands, and the region that's the strongest is North America.

As these companies report sales, and the next grouping of sales will come out in October, it's all about North America where the strength is. And it's in their own stores. Because you think some of these new stores that have opened, you've had the Dior flagships that have opened in the past year, the newer Meds store that's opened. There's more to come.

Paul Sweeney (1:50)

Tom, I've been told by one of our team that Dana got off a red eye this morning to come to our show.

Tom Keene (1:56)

She's just rocking.

Paul Sweeney (1:58)

Dana.

Tom Keene (1:58)

It's a golf stream, but that's different.

Paul Sweeney (1:59)

Dana, you don't take red eyes anymore.

Dana Telsey (2:01)

Of course I do.

Paul Sweeney (2:02)

So I was going to say, I'm going to call your boss and straighten them out, but you're the boss.

Dana Telsey (2:06)

Exactly. So what's going on? Basically, I look at it as there's productivity in being able to take a red eye, because then you're here for the day.

Tom Keene (2:14)

I'm not even going to go nuts here. Okay, can I editorialize here quickly?

I just took out Rockstar Service United, Scott Kirby, thanks so much. All new design business, this, I didn't fit the chair. Dana's 4'11, she can take the red eye and sleep every minute of the way.

Paul Sweeney (2:30)

I put it in my 1990 contract, no more red eyes. Dana, what's the number one theme for you and your clients these days in the world of retail? We've got higher interest rates, but we've also got a higher stock market, there's that wealth effect. What's the theme that you were talking about?

Dana Telsey (2:43)

A couple things. Number one, I think legacy modernizing. Brand names that have been tired and old are reinventing themselves. You look at Gap, which did 10% comps for the past two quarters. You look at Ross Stores, which has been double digit comping. You take a look at Victoria's Secret. Second thing, many of the CEOs and CFOs have spoken with over the past two weeks after earnings, a lot of them spoke at conferences. As you go through what they're talking about, what is a word that's coming in with many of them? The word acceleration. And acceleration is coming in because of some with sales trends, like a Victoria's Secret and even an Estee Lauder.

Some with traffic gains, whether it's a Figs or whether it's a Kroger.

Some with customer gains. You look at Ulta, which has 47 million loyalty members. Some with an acceleration in the rate of new store openings, like with Reformation. And some with transformation acceleration. Look at Macy's, walk across the street to Bloomingdale's and see all the new brands they have. And some with companies like G3, which just bought Marc Jacobs from LVMH.

Paul Sweeney (3:47)

A lot going on, always a lot going on in your world. The bottom of the K-shaped economy, how does that impact your research coverage and how do you look at that?