Oliver Chen, senior equity research analyst at TD Cowen, Talks Retail Outlook

Summary

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Bloomberg Talks: Oliver Chen, Senior Equity Research Analyst at TD Cowen, on Retail Outlook

Date: November 28, 2025
Host: Tom (Bloomberg)
Guest: Oliver Chen (TD Cowen)
Guest Appearance: Lisa Mateo (Fashion Correspondent)

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Episode Overview

This episode features senior equity research analyst Oliver Chen discussing the state of the retail market in 2025, consumer trends during the holiday shopping season, the evolving landscape of luxury retail, and investment insights. Expect analyses on brands like Levi’s, Walmart, Cartier, and insights into payment innovations, M&A trends, and the changing face of luxury.

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Key Discussion Points and Insights

Levi’s and the Value of Iconic Brands

[00:24-01:30]

• Levi’s Strategic Focus: The brand is doubling down on its direct-to-consumer (DTC) approach, aiming to open more proprietary stores globally.
  Oliver Chen: “Levi’s is an iconic brand with dominant market share at (the) premium end... What Levi’s is doing specifically is more direct to consumer, basically opening their own stores globally and consumers are looking for value. It plays quite nicely with quality.” (00:56)
• Consumer Preferences: Consumers prioritize classics with value—think quality denim that lasts for years.

Holiday Spending Outlook & Consumer Sentiment

[01:30-02:33]

• Spending Trends: Holiday spending is expected to rise by 2-3% but is essentially flat in volume due to inflation.
  Oliver Chen: “The consumer still has money, wants joy. We’re forecasting up 2 to 3%. Keep in mind inflation and pricing will be about 2 to 3%. So your units are flat and there’s a bit of a struggle.” (01:56)
• Consumer Psychology: Shoppers are experiencing “plenty of anxiety,” leading them to seek out great deals, but they remain resilient.

Payments and Shopping Behavior Evolution

[02:33-03:19]

• Payment Methods: Consumers are using a mix of traditional charge cards and fintech options like “buy now, pay later.”
  Oliver Chen: “Mobile is in the new mall... increased rates of mobile use... from buy online pickup in store to curbside pickup to delivery is being used so much.” (02:49)
• Shopping Experience: Emphasis on omnichannel retail—mobile, in-store, curbside, and delivery—especially among younger shoppers.

The Shifting World of Luxury Fashion

[03:19-04:21]

• Creative Leadership: The identity and direction of creative heads at luxury brands (e.g., Bottega Veneta with Louise Trotter, Gucci) remain crucial.
  Oliver Chen: “The creative matters... I’m really creating desire, having new, new design... themes for luxury continue to be quiet luxury... with less focus on logos and a real emphasis on quality and materials.” (03:46)
• Trends: There’s a pronounced shift towards “quiet luxury”—subtlety over logos, focus on craftsmanship and high-quality materials.

Jewelry’s Outperformance in Luxury

[04:21-05:22]

• Sector Dynamics: Jewelry is outpacing other luxury goods, with high performing names like Cartier (Richemont Group) and Van Cleef.
  Oliver Chen: “There’s definitely a barbell... more pressure at the low and middle and then some real strength at the high end. Cartier Richemont Group is outperforming... customers are gravitating towards gold jewelry, real stores of value.” (04:40)
• Handbags vs. Jewelry: Handbag growth is lagging due to price increases; jewelry’s perceived enduring value is winning more affluent consumers.

Mergers & Acquisitions Outlook

[05:22-06:11]

• Selective Activity: Chen foresees selective M&A, particularly in beauty (skin care, fragrances).
  Oliver Chen: “M and A is totally possible. And we’re watching the IPO market.” (05:41)
• Market Stability: Improving consumer conditions could spur more deals.

Top Investment Pick: Walmart

[06:11-07:23]

• Why Walmart?
  • Growth in digital advertising (“in the $5 billion range” vs. peers at “50 plus”).
  • AI implementation, strong defense via leading grocery segment, and focus on delivery and micro-fulfillment.
  • Appeal to higher and lower income demographics. Oliver Chen: “We like Walmart. We like the AI story, we like the value story. We like delivery, curbside pickup, marketplace model digital advertising that remains a favorite for us.” (06:15)
• Valuation Concerns: Tom notes a high P/E ratio, but Chen remains bullish due to Walmart’s expansion into high-margin services, profitability in digital spaces, and robust brand loyalty.

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Notable Quotes & Memorable Moments

• On Consumer Resilience:
  “Don’t bet against the US Consumer. It’s been solid worldwide.” — Oliver Chen (01:56)

• On Payment Evolution:
  “Mobile is in the new mall... these new ways of payment... is very different for younger customers.” — Oliver Chen (02:49)

• On Luxury’s Direction:
  “The creative matters... we’re seeing a lot of newness at Gucci and others... quiet luxury in terms of what’s happening with less focus on logos and a real emphasis on quality.” — Oliver Chen (03:46)

• On Jewelry as a Store of Value:
  “Customers are gravitating towards gold jewelry, real stores of value. And the prices here are compelling because handbag prices have gotten and extreme.” — Oliver Chen (04:40)

• On Walmart’s Strengths:
  “Digital advertising for Walmart is in the $5 billion range... themes about the big getting bigger and reaching more and more profitability online in part because of digital advertising as well as the marketplace.” — Oliver Chen (06:32)

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Timestamps for Key Segments

• 00:24 — Opening and Question on Levi’s Strategy
• 00:56 — Oliver Chen on Levi’s Brand Position and Strategy
• 01:40 — Lisa Mateo asks about Holiday Spending Outlook
• 01:56 — Oliver Chen on Consumer Spending and Sentiment
• 02:33 — Tom pivots to Payment Methods and Shopping Channels
• 02:49 — Oliver Chen on Payment Trends and Retail Experience
• 03:19 — Tom & Kevin Gordon on Creative Directors in Luxury
• 03:46 — Oliver Chen on Luxury Fashion Trends
• 04:30 — Lisa Mateo on Jewelry’s Performance in Luxury
• 04:40 — Oliver Chen on Jewelry and Consumer Trends in Luxury
• 05:22 — M&A Activity Discussion
• 06:11 — Top Retail Investment Pick
• 06:32 — Deep Dive on Walmart’s Competitive Advantages

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Tone and Style

The episode maintains an optimistic and analytical tone, blending market insight with light banter (e.g., Levi’s laundry advice, holiday shopping anecdotes). Chen is informative, accessible, and clear, making complex trends relatable to mainstream listeners.

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Transcript

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[Tom]

We finish strong in this hour with Oliver Chen definitive at TD Cowan. I can't say enough about his acuity over the years. Oliver, I remember the day A pair of 501 Levi's became more than 999A pair you feature in your research note. Levi's, what is their strategy given Amazon and given 2025 retail.

[Oliver Chen]

Well, Tom, it's a pleasure to be here. Happy Black Friday as well. Levi's is an iconic brand with dominant market share at premium end of the market. Also, as we think about what's happening now in product execution, it's about classics with a twist. It's about getting great value as well. And denim fits really nicely into these themes. What Levi's is doing specifically is more direct to consumer, basically opening their own stores globally and consumers are looking for value. It plays quite nicely with quality. As you know, 501s lasts forever and you shouldn't wash them either.

[Tom]

We turn surveillance. Tell me. Yeah, I get that lecture at home. We turn to surveillance fashion correspondent Lisa Mateo. Lisa, Brandy Melville is on the Mateo target, isn't it?

[Lisa Mateo]

Oh, okay. So yesterday I received my daughter's seven page PowerPoint presentation for her Christmas list. My question to you, Oliver, is is are people going to be spending as much as they did last holiday season? That's what I want to know because I put a budget out there.

[Tom]

Yeah.

[Oliver Chen]

Lisa, first of all, I want that deck. Please email it to me. Second, we are seeing spending, we're seeing a consumer that does have plenty of anxiety that's looking for great deals. That being said, the consumer still has money, wants joy. We're forecasting up 2 to 3%. Keep in mind inflation and pricing will be about 2 to 3%. So your units are flat and there's a bit of a struggle. On the one hand, consumers want joy and wellness and gifting. On the other hand, they're feeling anxious. So we're watching both and there's a bunch of crosscurrents. But don't bet against the US Consumer. It's been solid worldwide.

[Tom]

Oliver Chen with us, TD Cohen and we continue. Oliver, are we going to get out charge cards or like the affirm, buy now, pay later kind of thing? How are we going to acquire our Christmas, our holiday 2024?

[Oliver Chen]

We're going to be using both. What's still happening is mobile is in the new mall, so we're seeing increased rates of mobile use. But a bit of everything from buy online pickup in store to curbside pickup to delivery is being used so much. And then I like the good old fashioned way. It's just thrilling to be in the stores this morning and across the country and earlier this week. So it's all happening and certainly these new ways of payment and the future of payments as being is very different for younger customers.

[Tom]

To Oliver Chen on luxury right now, Kevin Gordon is in the French Alps at that hotel Audrey Hepburn was in, in Charade with Cary Grant. He emails in Oliver with a great question. This is Kevin Gordon of Charles Schwab. Bottega Venata blew it up and is doing better with the British type, Louise Trotter. The fashion heads of different luxury brands, they still really matter, don't they? Yeah.

[Oliver Chen]

What's happening is lots of change. The creative matters. I'm really creating desire, having new, new design and we're seeing a lot of newness at Gucci and others. And Bottega has been doing great. The themes for luxury continue to be quiet luxury in terms of what's happening with, with less focus on logos and a real emphasis on quality and materials. So Bottega Veneta fits nicely in that trend. As you know, Brunello Cucinelli, Laura Piana and I'm a personal lover of Gucci. So I want to see them when we're watching some creative change there at Tom Ford too.

[Tom]

Right, We've seen that. Lisa, you mentioned today, Burberry a little bit off the mark. They've been hugely promotional. Lisa Mateo. Yeah, this with Oliver Chen now also.

[Lisa Mateo]

On the luxury segment. I'm going through the Wall Street Journal this morning and it has this article, it says jewelry is outperforming the rest of the luxury world. Are you seeing that?

[Oliver Chen]

Yes, we are. We love Cartier. So there's a. There's definitely a barbell and by bifurcation where more pressure at the low and middle and then some real strength at the high end. And Cartier Richemont Group is outperforming Van Cleef as well as Cartier. Customers are gravitating, gravitating towards gold jewelry, real stores of value. And the prices here are compelling because handbag prices have gotten and extreme. So the Love Collection at Cartier, Love Unlimited at Cartier, the Maison, really enduring value and timelessness. And overall the jewelry growth rates have been in the high Single digit and we've been struggling to grow in handbags.

[Tom]

Well, we see M and A this year. I mean, in so many other industries we talk about mergers and acquisitions and Wall Street's on fire with a boom economy. In the Oliver Chen world, do they gobble up the weak providers in luxury or frankly in other markets as well?

[Oliver Chen]

Yeah, Tom, I think what we'll see in is selective. M and A beauty is always an M and A orientated sector in terms of large players acquiring brands that have been developed by founders. Skin care, longevity, niche fragrances, those are big opportunities. In luxury, it'll be selective. There are some assets that have sold and we'll see. But the market's getting better with the consumer on more stable footing. So M and A is is totally possible. And we're watching the IPO market.

[Tom]

To Oliver Chen, your single best buy, please.

[Oliver Chen]

We like Walmart. We like the AI story, We like the value story. We like delivery, curbside pickup, marketplace model digital advertising that remains a favorite for us.

[Tom]

Oliver, I got a P E of 43 on Walmart. You got to be kidding me. How is that possible?

[Oliver Chen]

There's a lot ahead. Digital advertising for Walmart is in the $5 billion range. Think about Google, Amazon and others that are 50 plus. Furthermore their capabilities. It's themes about the big getting bigger and reaching more and more profitability online in part because of digital advertising as well as the marketplace. In addition, it's defensive in that it's a leading grocery business with 60% of the revenue being grocery. So we're excited about all these things on the offense, on AI as well as delivery and micro fulfillment, on the defense as well as the everyday low price. And that's what consumers are looking for today. Finally, they're getting higher household income consumers as well. And they're serving the middle and low well too with that everyday low price. I grew up in Louisiana going to the Walmart supercenter and it's a real community driven retailer as well.

[Tom]

Oliver, thank you so much for having us finish strong in retail. It's Black Friday. Mr. Chen is with TD Cowan. I can't say enough. We protect the copyright of all of our guests. For Oliver Chen, please go to TD Cowan to get his brilliant note. You heard it there.

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