LET US TALK ABOUT WHAT THE HIGH END CONSUMER IS DOING.
SAKS, IT IS A DIFFERENT TYPE OF CONSUMER.
>> WE HAVE SEEN SO MANY REPORTS THAT THOSE FOLKS NOT ONLY HAVE
THE CAPACITY TO SPEND BUT THEY ARE CONTINUING TO SPEND.
I HAVE SEEN SURVEYS OUT OF SAKS SL THING THERE HAS BEEN A
SLOWDOWN?
>> THE LUXURY CONSUMER EXISTS ON A CONTINUUM.
WE ARE SEEING A BIGGER PULLBACK FROM THOSE FOLKS, THE
OCCASIONAL LUXURY CONSUMER. STARTING ON THEIR JOURNEY ON
THE CONTINUUM WHERE THE CORE LUXURY, LUXURY COURSES THROUGH
THE IR LIFE. THEY PULLBACK LAST BUT
CERTAINLY, RELATIVE TO WHAT WE ARE SEEING LAST YEAR, MORE OF A
PULLBACK. ROMAINE:
WHEN YOU LOOK AT PAST ECONOMIC CYCLES, AND ECONOMIC CYCLES,
WHAT IS THE DIFFERENTIAL BETWEEN A BRAND LIKE SAKS AND
THE TYPES OF CUSTOMERS YOU HAVE VERSUS THE MORE MIDDLE-MARKET
RETAILERS?
>> I TEND TO SAY THAT THIS CONSUMER IS THE LAST IN AND THE
FIRST OUT OF THESE BIG MOMENTS. WE SAW THAT OBVIOUSLY IN 2008
AND EVEN RECENTLY IN THE PANDEMIC ITSELF WHICH HAD LESS
OF A FINANCIAL ISSUE. BIGGER. OVERALL, THAT IS HOW THEY TEND
TO BEHAVE. ROMAINE: YOU ARE IN CHARGE OF THE ONLINE
OPERATIONS. IS THERE A DIFFERENCE IN
CONSUMER VERSUS THOSE WHO GO INTO A TRADITIONAL SAKS FIFTH
AVENUE COMPARED TO THOSE SHOPPING ONLINE?
>> THE ONLINE CUSTOMER TENDS TO BE A BIT YOUNGER.
THAT IS ABOUT IT. THE CONSUMER BEHAVES SIMILARLY
ACROSS BOTH CHANNELS. ROMAINE: WHAT ARE THEY LOOKING FOR RIGHT
NOW? ARE THEY CHASING AFTER THE STATUS BRANDS?
ARE THEY LOOKING FOR SOMETHING THAT IS NEWER AND FRESHER?
WHAT ARE THEY LOOKING AT?
>> A LITTLE BIT OF EVERYTHING. PEOPLE ARE GETTING MORE BREAST
AGAIN. NOT FROM A SWEATS DURING THE
PANDEMIC, EVEN FROM LAST YEAR. YOU ARE SEEING MORE BLAZERS.
A YELLOWSTONE EFFECT. YOU ARE SEEING A LOT OF DENIM.
CERTAINLY, FASHION IS ALWAYS EVOLVING AND CHANGING.
THERE ARE FOLKS WHO ARE LOOKING FOR SOMETHING NEW AND EXCITING.
LESS LOGOS THAN WHAT YOU HAVE SEEN IN THE PANDEMIC. ROMAINE:
WHEN YOU ARE HAVING MEETINGS, HOW FAST YOU HAVE TO PAY THAT?
YOU MENTIONED YELLOWSTONE, A LOT OF THESE POP-CULTURE
PHENOMENONS THAT END UP SHAPING HOW WE DRESS.
HOW QUICKLY DO YOU HAVE TO ADAPT TO THAT BEFORE THAT FADES
AWAY?
>> THINK ABOUT THE PROCUREMENT CYCLE.
AN ENTIRE -- IT GOES BACK TO WHAT WE SEE ON THE RUNWAY.
THEY'RE ABLE TO IDENTIFY I HAVE A TEAM, A FASHION LEADER WHO IS
ABLE TO IDENTIFY THIS BEFORE IT GETS NAMED YELLOWSTONE EFFECT.
IT WOULD BE CALLED HEAD TO TOE DENIM OR SOMETHING ELSE. Y2K.
WE ARE GETTING OLD ONE THAT IS -- ROMAINE: I MISSED THAT ONE!
>> THERE ABLE TO IDENTIFY THINGS OFF OF THE RUNWAY.
WE CAN REACT APPROPRIATELY. ROMAINE:
I'M CURIOUS BY DISCOUNTING. HOW MUCH OF IT HAD TO DO WITH
THAT AT ALL?
>> RIGHT NOW IT IS PRETTY SAME-SAME.
THE CONSUMER IS LEADING TOWARDS PROMOTION KNOWLEDGE AND
DISCOUNTING BECAUSE THEY WANT THE DEAL.
THE LUXURY CYCLE IS NOT ALWAYS PROMOTIONAL.
WE WILL SEE INTO THE FALL. ROMAINE:
WHAT IS THE DIFFERENCE BETWEEN PROMOTERS YOU ARE OFFERING --
PROMOTIONS YOU ARE OFFERING OUT AS OPPOSED TO BEFORE THE
PANDEMIC?
>> RIGHT NOW WE ARE TRYING TO HOLD.
THAT DOES NOT MEAN THE CONSUMER IS NOT USING THE SAME
PROMOTIONS THAT WERE NOT THERE BEFORE, BUT IN A MORE
PRONOUNCED MATTER. -- MANNER. ROMAINE:
WHAT ABOUT YOUR OWN COSTS? THE PEOPLE POWER?
THE WAREHOUSES?
>> THERE ARE INFLATIONARY -- IS INFLATIONARY POWER EVERYWHERE.
WE ARE RETAILERS. THE WHOLESALE PRICES HAVE GONE
UP ALONG WITH IT. ALSO, LUXURY IS ABOUT SCARCITY.
LUXURY IS ABOUT CONSTRAINING THE AMOUNT OF PRODUCT.
THAT WOULD ACTUALLY CAUSE PRICES TO GO UP ON THE PRODUCT.
I FEEL PRETTY GOOD ABOUT WHERE WE ARE FROM COST OF DOING
BUSINESS ROMAINE: HAVE YOU SEEN A MODERATION IN
TERMS OF THE GROWTH?
>> WE HAVE SEEN MODERATION. WE ARE STARTING TO SEE
DEFLATION ON THE DIGITAL MARKETING SIDE.
LESS PEOPLE ARE IN THIS SPACE AND THEY ARE PULLING BACK AT
THE SAME TIME. SOME OF THAT WORKS TO OUR
ADVANTAGE. ROMAINE: WHAT ABOUT ACQUISITION OF
PRODUCTS HERE? THE SUPPLY CHAIN DISRUPTIONS WE
SAW DURING THE PANDEMIC? IF YOU WANT, WHATEVER THE
YELLOWSTONE GENES ARE GOING TO BE, CAN YOU GET ENOUGH OF THEM
IN TIME?
>> WE ARE HEAVILY EUROPEAN IS ALMOST -- EUROPEAN
SOURCED. WE WERE NOT SUBJECT TO THE
SUPPLY CHAIN CONSTRAINTS THAT WERE OUT THERE DURING THE
PANDEMIC AND COMING OUT OF IT. ROMAINE:
WHAT IS THE GROWTH STORY GOING TO BE FOR YOUR BUSINESS?
WHAT ARE YOU PARTING OUT?
>> MARKET SHARE. GOING AFTER AND WEAPONIZING ARE
RICH OR FIRST PARTY DATE AT WHICH IS BECOMING MORE
IMPORTANT WITH -- W -- WEAPONIZING OUR FIRST PARTY
DATA WHICH IS BECOMING MORE IMPORTANT.
IT WILL GROW IN THE MIDTERM FOR SURE. ROMAINE:
HOW DO YOU FIT INTO THAT WHEN A LOT OF BRANDS ARE GOING DIRECT
TO THE CONSUMER? EVEN AS THEY MAINTAIN
PARTNERSHIPS WITH THE DEPARTMENT STORES?
>> WE CONSIDER OURSELVES A DEPARTMENT STORE, WE HAVE
MARKETPLACE ON OUR WEBSITE. WE ALLOW BRANDS TO GO DIRECT TO
CONSUMER THROUGH US. WE ARE WHERE YOU CAN COME FROM.
INSPIRATION. IF YOU WAKE UP IN THE MORNING
AND YOU WANT A SPECIFIC BRAND MAY BE WILL GO TO THAT BRAND'S
SITE OR DIRECTED THEM. OTHERWISE IF YOU WANT TO
EXPERIENCE, YOU WANT INSPIRATIONAL IDEAS, YOU COME
TO A MULTIBRANDED PLAYER LIKE WE ARE. ROMAINE:ROMAINE:
THE ONLINE BUSINESS, WILL THEY CONTINUE AS ITS OWN SEPARATE
ENTITY? ARE THERE PLANS FOR A SHIFT OR
A CHANGE?
>> WE HAVE A DEEP PARTNERSHIP WITH THE STORES COMPANY THAT
ENABLES US TO EXECUTE ALL OF THE DIFFERENT CHANNEL CUSTOMER
EXPERIENCES.
WE FEEL LIKE WE ARE SET UP TO A WIN-WIN.