NEIL: CONSUMER CONFIDENCE RECORD
DECEMBER.
110 BILLION SPENT ONLINE DURING
THE HOLIDAY SEASON.
WE HAVE THE FORMER TOYS "R" US
CEO, LARRY STORE MUCH.
WHETHER CONSUMERS PARTICULARLY
THE STOREFRONT, WHETHER THEY
LEAD THE PARADE WHAT IS EXPECTED
TO BE A ROBUST HOLIDAY SEASON.
GOOD TO SEE YOU.
>> GOOD TO SEE YOU.
NEIL: HOW ARE THINGS LOOKING ON
THE RETAIL FRONT FROM YOUR
PERSPECTIVE.
>> VERY STRONG.
CONSUMERS ARE STRONG ALL YEAR.
THEY CARRIED THAT INTO THE
HOLIDAY.
I EXPECT THIS WEEKEND TO BE
PHENOMENAL.
THIS IS SUPER SATURDAY,
TOMORROW.
THE CALENDAR IS PERFECT A
RETAILER DREAMS OFF.
THIS IS WHAT YOU WAIT FOR.
DOESN'T HAPPEN VERY OFTEN.
CHRISTMAS ON TUESDAY.
LONGEST PERIOD OF TIME BETWEEN
THANKSGIVING AN CHRISTMAS.
THIS WEEKEND WILL BE HUGE.
NEIL: EVEN IN TOUGH TIMES,
PARENTS, ADULTS DON'T SKIMP ON
KIDS, YOU REMINDED ME ABOUT
THAT.
TALKED ABOUT RECESSIONS BULL
MARKETS AND THE LIKE.
THE BIGGER QUESTION WHAT HAPPENS
AFTER THIS HOLIDAY THOUGH?
EVERYONE SEEMS TO BE POINTING TO
A SLOWER ECONOMY, NOT A
RECESSION.
BUT SLOWER.
WHAT DO YOU SEE?
>> WELL THE CONSUMER DOESN'T
KNOW THAT.
CONSUMERS TEND TO SPEND, BASED
ON WHAT IS IN THEIR WALLET NOW.
CONSUMERS ARE NOW, NOW.
THE MARKET IS FORWARD-LOOKING.
WE HAVE A LITTLE BIT OF
DISCONNECT GOING ON.
THERE.
EMPLOYMENT IS HIGH.
WAGES ARE HIGH.
OUTSIDE OF LUXURY GOODS WHICH
ARE IMPACTED BY THE MARKET,
THERE IS KIND OF A WEALTH EFFECT
AS RICH PEOPLE SEE THEIR NET
WORTH DECLINE.
NEIL: TIFFANY?
>> TIFFANY WAS THAT.
WHAT IS GOING ON WITH BIG
EXPOSURE THE CHINESE ARE SOFT,
PARTIALLY WITH THE WHOLE THING
GOING ON WITH THE TARIFFS AND
THE TRADE WAR.
BUT REGARDLESS, THE BASIC
CONSUMER IS VERY STRONG.
THE ECONOMY IS VERY STRONG ON
THAT FUNDAMENTAL LEVEL.
NOW WHETHER OR NOT, YOU KNOW
THIS, FOLLOW US.
WHETHER OR NOT THERE IS
RECESSION NEXT YEAR.
THE CONSUMER WON'T HAVE MONEY IN
THE POCKET REMAINS TO BE SEEN.
RIGHT NOW THEY DO.
THEY ARE SPENDING IT AND
SPENDING IT ON CHRISTMAS.
THEY DON'T CARE ABOUT THE
GOVERNMENT SHUT DOWN.
NEIL: THEY REALLY DON'T.
WE IN THE MEDIA, LET ME ASK YOU
ABOUT TOYS.
YOUR LIFEBLOOD.
AND THE DYNAMICS HAS CHANGED
SINCE YOUR OLD COMPANY FELL INTO
BANKRUPTCY LONG AFTER YOU LEFT I
MIGHT POINT OUT.
>> THANK YOU.
NEIL: THE CONCERN ONLINE
DOMINATED WALMART, DOMINATED
THIS.
ARE THERE AS MANY TOYS OUT THERE
OR WHAT?
WHAT HAPPENED?
>> IT ISN'T SO MUCH ON LINE.
ALL CHANNEL MODEL IS WORKING.
AS YOU POINT OUT THE WALMART IS
THE MARKET SHARE LEADER.
NEIL: TARGET.
>> TARGET IS VERY STRONG IN TOYS
AND AMAZON IS VERY STRONG IN
TOYS.
YOU CAN WIN MULTIPLE WAYS.
WITH THE HUGE CAPACITY TAKEN
OFF-LINE WITH DENIES OF
TOYS "R" US, 18% OF THE MARKET
SUPPLY SIDE DISAPPEARED.
YOU DIDN'T FIND THAT REPLACED
EASILY.
PEOPLE THAT WENT INTO TOYS THAT
DIDN'T BEFORE THEY WILL BE SO
SORRY.
THEY WILL LOSE THEIR SHIRT IT IS
COMPLEX BUSINESS.
IF YOU BACK THE WRONG THINGS, IT
WILL BE WRITEOFFS IN JANUARY,
NOBODY BUYS TOYS IN JANUARY.
WALMART, TARGET, AMAZON, THEY
ALL BOUGHT MORE BUT DIDN'T BUY
ENOUGH MORE TO MAKE UP WHAT
HAPPENED WITH TOYS "R" US.
NEIL: WHEN YOU SAY NOT ENOUGH,
WHAT IS IN SHORT SUPPLY.
>> HOT TOYS, MANY ARE OUT OF
STOCK ON SHELVES OF MANY OF
THESE OTHER RETAILERS.
ONE THING TOYS "R" US TRIED TO
DO HAVE THEM IN STOCK ALL THE
WAY TO CHRISTMAS.
NEIL: IF YOU HAD TO MAKE A BET,
HAD A GOOD GUT, GO BACK TO
CABBAGE PATCH DATES, BOTTOM LINE
YOU ARE PLAYING A LITTLE BIT OF
RUSSIAN ROULETTE.
>> TOYS "R" US WAS INTEGRAL TO
THE MARKET.
IT WAS PART AND PARCEL.
MARKET.
DIFFICULT WHERE VENDORS BEGAN
AND TOYS "R" US BEGAN.
THEY CAN MAKE IT UP OVER A
PERIOD OF YEARS BUT NOT IN ONE
YEAR.
AMOUNT ADDED BY WALMART, TARGET,
AMAZON IN THE MARKETPLACE IS
INSUFFICIENT.
WE SAW THAT IN TOY DATA THAT WAS
DOWN PRETTY SHARPLY IN START OF
HOLIDAY SEASON IN TERMS OF
SALES.
DOESN'T MEAN KIDS WON'T HAVE
TOYS EVENTUALLY.
MARKETS WILL RESET.
NEW ENTRANTS IN THE MARKETS.
MAYBE TOYS "R" US WILL COME
BACK, WHO KNOWS.
NEIL: A LOT OF TOYMAKERS OPEN UP
THEIR OWN SITES YOU BUY DIRECTLY
FROM THEM.
I WONDER WHERE YOU SEE IT ALL
GOING?
>> I EVENTUALLY THINK THE MARKET
WILL REACH EQUALIBRIUM.
I THINK IT WILL BE AT LOWER
LEVEL THAN IT COULD HAVE BEEN.
WE STUDIED ECONOMICS IN SCHOOL.
THE SUPPLY CURVE, DEMAND CHURCH.
LESS SUPPLY THE EQUALIBRIUM WILL
BE AT LOWER PLACE.
THAT IS SIMPLY WHAT COULD
HAPPEN.
NEIL: SHUT DOWN IN THE STORE
MIDTOWN MANHATTAN, ALBEIT
REOPENED A SMALLER UN.
THERE IS CHANCE, SOMETHING AS
ICONIC TOYS "R" US --
>> 850 STORES ARE CLOSED,
TOYS "R" US, BABIES 'R US,
$8 BILLION OF SALES.
THAT IS NOT RECENTLY REPLACED.
OVER TIME THE MARKET WILL RESET.
IN THE SHORT TERM IT IS QUITE
DISRUPTIVE TO HAVE SOMETHING
LIKE THAT OCCUR.
YOU CAN'T MAKE UP FOR IT IN A
FLASH.
IT HELPS TO HAVE SPECIALIST
CATEGORY KILLER.
ELECTRONICS WITH BEST BUY.
HAVE THAT OTHER CATEGORIES AND
OTHER SEGMENTS.
MARKET.
HOME AND BUILDING SUPPLY YOU
HAVE TWO, LOWERS AND HOME DEPOT.
HELPS TO BUILD A MARKET.
CONSUMERS WILL SPEND FOR
CHRISTMAS I EMPHASIZE THAT.
CHRISTMAS SALES ARE UP.
HOLIDAY SALES ARE STRONG.
CONSUMER HAS COME TO PLAY.
NEIL: COULD THEY HAVE LIMPED
THROUGH THE CHRISTMAS SEASON
THOUGH, THEN REASSESSED
THEMSELVES?
>> DEMISE OF TOYS "R" US HAS
MORE TO DO WITH HIGH LEVERAGE OF
THE COMPANY AND SPECIFIC
SITUATION WITH INDIVIDUAL
CREDITORS AND WHAT THEY WANTED
AND HOW THEY FELT THEY COULD GET
THE MOST MONEY THAN IT HAD TO DO
WITH INABILITY TO COMPETE IN THE
MARKETPLACE.
NEIL: SCORES OF INDUSTRIES.
YOU AND I WERE TALKING ABOUT IN
THE BREAK.
BETTER THAN SOME MONEY THAN NO
MONEY.
>> WILL BE A LOT MORE WITH SEARS
BANKRUPTCY.
NOT GOING TO BE GOOD.
GYMBOREE FILED FOR BANKRUPTCY.
LBOs WILL NOT BE GOOD.
RETAIL REQUIRES TOO MUCH
CAPITAL.
IN ORDER TO INVEST IN INTERNET
AND STORES AT THE SAME TIME IN
ORDER TO BUILD A PERFECT MODEL.
NEIL: TAKES PASSION.
HAVE TO BE PASSIONATE ABOUT THE