Keep Spending Alive in 2025

Summary

Fashion People – Episode: Keep Spending Alive in 2025

Release Date: January 3, 2025
Host: Lauren Sherman
Guest: Sarah Shapiro, Retail Correspondent

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1. Episode Introduction

Lauren Sherman kicks off the episode by welcoming listeners to Fashion People and introducing Sarah Shapiro as today’s guest. She highlights recent personal experiences, including her early morning routine and reflections on social media interactions, particularly focusing on targeted advertising in the beauty sector.

Notable Quote:
"Pros. That hair care line that is probably targeting you with ads or will after you listen to this." — Lauren Sherman [00:08]

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2. Personal Updates and Recent Purchases

Lauren and Sarah share updates about their recent activities and purchases. Lauren discusses her experience shopping for a Carla Welch Michael Starr T-shirt, praising its fit and discussing its unique color—a subtle nod to post-wash discoloration. Sarah shares her family trip to Hawaii, emphasizing the positive shopping experiences her daughter had at Lululemon.

Notable Quotes:
"I bought it that day and it arrived. I wore it yesterday. That's incredibly fast." — Lauren Sherman [10:39]
"She is very much a real customer of Chanel. I mean, I am wearing one of my Chanel ballet flats at the moment." — Sarah Shapiro [24:09]

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3. The Future of Pricing in Luxury Fashion

The discussion shifts to the pricing strategies of luxury brands. Lauren references an opinion piece by Catherine Zarrella from the New York Times about the saturation of overpriced luxury goods. She brings up recent market intelligence indicating potential price hikes by brands like Hermès and Loro Piana in Korea, questioning whether this trend will continue globally.

Sarah analyzes the elasticity of high-end brands, suggesting that while some luxury brands may implement price increases, they are doing so strategically, considering consumer and retailer responses. She compares this to price hikes in the consumer packaged goods sector, where aggressive increases led to pushback.

Notable Quotes:
"The price value equation is lot is off." — Lauren Sherman [19:19]
"There’s like full on divisions that are just analyzing this and all they do is they're looking at the commodity pricing and everything." — Sarah Shapiro [22:27]

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4. Chanel vs. Hermès: Brand Dynamics and Market Positioning

Lauren and Sarah delve into the competitive dynamics between Chanel and Hermès. Lauren speculates on whether Chanel views Hermès as a direct competitor and discusses Chanel’s efforts to emulate Hermès' operational strategies. Sarah confirms her avid support for Chanel and discusses her personal experiences with the brand, including secondhand purchases and collaborations.

They also touch on the potential impact of leadership changes at Chanel, particularly with the departure of key designers. Sarah expresses excitement about seeing how Chanel will evolve while maintaining its iconic elements like tweed and pearl details.

Notable Quotes:
"Chanel is trying really hard to be more like Hermès in the way it operates." — Lauren Sherman [24:09]
"I want to see kind of the impact from that, but also take into account all the Chanel identities." — Sarah Shapiro [27:02]

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5. Retail Store Evolution and Consumer Experience

The conversation shifts to the transformation of retail stores amidst declining foot traffic and increased theft. Lauren discusses the transition of the Saks store in San Francisco to an appointment-only model, attributing it to security concerns and the need to streamline operations. Sarah elaborates on how retailers are experimenting with different store formats to enhance the shopping experience, such as integrating omnichannel strategies and focusing on customer-specific needs.

They also explore the challenges faced by retailers in balancing discovery with practicality in inventory, highlighting the difficulty in catering to immediate consumer needs while maintaining a diverse product range.

Notable Quotes:
"The last couple of collections, you know, their new reason for searching it on the RealReal or something." — Sarah Shapiro [28:35]
"They have a really loyal customer base and you can keep a business if you don't go nuts and you don't open like 14 stores." — Lauren Sherman [35:59]

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6. Mergers and Acquisitions in the Fashion Industry

Lauren reviews significant M&A activity from the previous year, including Farfetch’s acquisition by Coupang, YNAP’s acquisition by Mytheresa, and the merger of Saks with Neiman Marcus Group. She seeks Sarah’s insights on how these consolidations will impact consumer experience and the broader fashion landscape.

Sarah reflects on the necessity of these mergers to address industry challenges, such as overexpansion and the need for enhanced shopping experiences. She anticipates that these changes will lead to more innovative retail strategies and better inventory management, ultimately benefiting consumers.

Notable Quotes:
"I think the industry needed something to happen and whether or not this is the right thing, we'll see unfold." — Sarah Shapiro [32:33]
"The stores need to change format. They need to think about what should the inventory in store be." — Lauren Sherman [36:20]

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7. The State and Revival of Mall Brands

The discussion moves to the resurgence of traditional mall brands like Gap Inc., Abercrombie, J.Crew, and Alex Mill. Lauren highlights the strategic moves these brands have made to stay relevant, such as J.Crew’s marketing turnaround and Alex Mill’s focus on wearable, everyday clothing. Sarah emphasizes the importance of inventory management and maintaining brand equity to navigate the competitive retail environment.

They also touch on the challenges these brands face, including tariff threats and consumer wariness, suggesting that successful niche targeting and efficient operations will be crucial for their continued success.

Notable Quotes:
"These brands don't charge an arm and a leg but that still have some equity." — Lauren Sherman [43:53]
"I think the biggest part is making sure they can manage inventory really well and handle the P and L." — Sarah Shapiro [45:18]

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8. Closing Remarks and Future Predictions

As the episode wraps up, Lauren and Sarah discuss upcoming topics, including affiliate marketing and beauty industry insights. They express enthusiasm for the evolving landscape of fashion and retail, anticipating further innovations and strategic shifts in the industry.

Notable Quote:
"It's going to be so much fun." — Sarah Shapiro [55:57]

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Conclusion

In this episode of Fashion People, Lauren Sherman and Sarah Shapiro explore the intricacies of the fashion industry's current landscape and future trajectory. From pricing strategies of luxury brands to the transformative impact of mergers and the revival of traditional mall brands, the conversation provides a comprehensive overview of the challenges and opportunities facing the sector in 2025. Their insights offer valuable perspectives for industry insiders and fashion enthusiasts alike, making it a must-listen for those interested in the behind-the-scenes dynamics of the multi-trillion-dollar fashion business.

Transcript

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[Lauren Sherman]

Welcome to Fashion People. I'm Lauren Sherman, writer of Puck's Fashion and Beauty Memo Line Sheet. And today with me on the show is our very own retail correspondent, Sarah Shapiro to discuss the year ahead. Before we get going, I wanted to remind you that if you like this podcast, you'll definitely love Puck, where I send an email called Line Sheet. If you're a fashion person, you get that reference. It's an original look at what's really going on inside the fashion and beauty industries line. She is scoopy, analytical and above all, fun. Along with me, a subscription to Puck gains you access to an unmatched roster of experts reporting on powerful people and companies in entertainment, media, sports, politics, finance, the art world and much more. If you're interested listeners of Fashion People get a discount. Just go to Puck News slash Fashion People to join Puck or start a free trial. Happy Friday. Hope you had a great break. I had a nice time. I did all the things I like to do. I woke up incredibly early. I read a couple books, spent too much time dming people on Instagram. Things I learned on Instagram include Pros. That hair care line that is probably targeting you with ads or will after you listen to this. You know it doesn't have a great reputation among my followers. I have been targeted. I actually don't need it. I use the Rose Roz hair care line and it, I love it. It's amazing. But I need one thing for curl definition and was like, oh, maybe I should try this. And honestly, I probably got 40 responses. Two people liked it. It's. It's not for me. Also, how are we feeling about Solomon's? This is another thing I observed over the break. I did a crazy thing and stood in line for a whole 15 minutes at courage Bagels on Monday morning and I saw a woman wearing that classic like fashiony Solomon style. I use them for trail running, but like, I mean the, the fashion ones and I just thought they really are a statement now, aren't they? It's like when common projects got burnt, like you just couldn't wear them anymore. And I feel like it's actually worse for women than men. Men can get away with that stuff for a lot longer, but it feels like a real fashion statement. It's almost like that one style of New Balance that I would never wear. It feels like that. Like you just can't, can't do it anymore. I don't know what do you all think? The girl looked cool, but it just felt felt a little too much. I miss my common projects. Anyway, it's Golden Globes weekend here in la. I will be at the W Magazine party on Saturday and maybe a couple other things. Probably not though. We'll see. We at Line Sheet are back in action. On Thursday, I published my Year Ahead predictions, some of which Sarah and I will get into today. And starting next week, Line Sheet will hit your inbox five days a week. Sarah is gearing up for her big debut on Tuesday with a real banger and Rachel Strugatz is back with all the beauty intel that's fit to publish. Can't wait. Sarah Shapiro, welcome back to Fashion People.

[Sarah Shapiro]

Hi. Happy New Year.

[Lauren Sherman]

Happy New Year. What'd you have for breakfast this morning?

[Sarah Shapiro]

I have not had breakfast yet.

[Lauren Sherman]

Me neither. It's only 9am on the West Coast.

[Sarah Shapiro]

It's early. I like to get up, get my workout in and so I feel good that I did that. And okay. After this, I'll maybe start to think about breakfast. Maybe not. It'll either be a protein shake. I really like that. Amanda Mull has also mentioned, but as soon as she did, I was like, don't say it. Because they're always out of stock.

[Lauren Sherman]

What is it?

[Sarah Shapiro]

It's the core power. I like the chocolate flavor.

[Lauren Sherman]

I think I have tried that before. I'm not really a big shake person.

[Sarah Shapiro]

This is the only legit, the only one I like.

[Lauren Sherman]

So what workout did you do? You look very fresh faced.

[Sarah Shapiro]

It's another way of saying I'm still red. I I in my garage is a peloton bike and a treadmill. And for the past few years that's been the best thing just because I can just roll into my garage and work out. So I did a, it's called a walk plus run. So it's basically 50% of the time you're walking, 50% of the time you're running. I don't have to think about it and just get it done.

[Lauren Sherman]

Great. I just bought a, a walking pad with a standing desk.

[Sarah Shapiro]

Okay. I can't wait to see how much you use it. I like it very much. I have a Plexiglas tray that goes on top so it can turn into that. And I love it for phone calls when I'm not really taking notes, but just having a chat with somebody that has been great. Or when I can read something at a slow pace. It works for me.

[Lauren Sherman]

I can't write on it, but I feel like the writing would not work. I just felt like, I don't know if you live in the Bay Area where, which is a bit more walkable, I feel like, compared to Los Angeles, but we live on this, up this very steep hill.

[Sarah Shapiro]

Same.

[Lauren Sherman]

And that has created a mental block for me. Also in the morning, I don't want to walk around when it's like pitch black. I went for a run last night at 4:45 and I had like my flashlight the whole time. It's just, it's just not even this neighborhood which is fairly walkable. It's just hard. And also I I'd rather be getting something done, I would say. I've had it for, like, two months. I don't use it a ton, and it's not very high power. What I really want. Have you ever seen these treadmills that are. They're not electric and they have chains. They're like $5,000.

[Sarah Shapiro]

Wait, the slat ones?

[Lauren Sherman]

Yes, the slots?

[Sarah Shapiro]

Yeah.

[Lauren Sherman]

They are amazing. And I really, really want one. I was going to a personal trainer last year, and he had one, and it was the first time I'd ever run on a treadmill and not been, like, freaked out about falling because I basically can't run on treadmills because I'm afraid I'm gonna fall. And I never go as fast as I could.

[Sarah Shapiro]

Right.

[Lauren Sherman]

So that's like my. My reach goal. But yeah, the walking pad thing, it's just crazy how little I walk living here. It's. It's. It's been a real issue for me.

[Sarah Shapiro]

I mean, I missed that from New York, too.

[Lauren Sherman]

Yeah.

[Sarah Shapiro]

I mean, it was my com. My commute. I would walk it. It would be two miles, but I still did it. So I. I miss that a lot.

[Lauren Sherman]

Yes. So what were you up to over the break? Did you buy anything? Did you read anything? What was on your agenda?

[Sarah Shapiro]

So my family, we went to Hawaii for about five days with my parents and my brother's family, and that was great and very relaxing. We had fantastic weather. We were at the pool and the beach. I did go to one shopping center there, and it was, I guess, like kind of a hybrid shopping center. It felt like it had a little bit of, like, tourist things as well as there was a Lululemon there, which made my daughter very happy. She is very. She's in middle school, very much loves Lululemon. I feel like the whole store felt like 70% of the store was on sale. And probably because it's also in this more tourist area, they had a lot of inventory. So she picked up a couple of things. My husband picked up a couple things.

[Lauren Sherman]

Did she get any Disney stuff?

[Sarah Shapiro]

She did not get any Disney. She could care less about the Disney stuff. I think if we had a trip planned to Disney, she would then be begging for it because she's like, well, I'd wear it that day, but I know she would legit wear it just that day and never again. But they had plenty of their aligned leggings, which is their popular legging in a ton of different colors. No black on sale, but all the other colors and some tanks. And that made her really Happy.

[Lauren Sherman]

Interesting.

[Sarah Shapiro]

Yes.

[Lauren Sherman]

Fun. That sounds good. You know what I bought?

[Sarah Shapiro]

What did you get?

[Lauren Sherman]

I bought the Carla Welch Michael Starr's T shirt that you wrote about Mind sheet on Thursday.

[Sarah Shapiro]

Have you have. Has it arrived yet or did you pick it up and sell?

[Lauren Sherman]

It arrived it. Literally. When did you file that?

[Sarah Shapiro]

Oh, I wrote it right before New year's, like the 30th or 31st.

[Lauren Sherman]

So I bought it that day and it arrived. I wore it yesterday. That's incredibly fast. It's. It's interesting. It's a really nice T shirt. Fits perfect. Maybe. Maybe their warehouse is in LA because it is a Los Angeles based brand. So maybe that's why arrives.

[Sarah Shapiro]

Right. That makes sense. But even that somebody would be shipping and packing during the holiday is impressive.

[Lauren Sherman]

Yeah, it's. It's fascinating. It was 48 bucks. It feel white T shirts are. I have trouble spending on them because they always get ruined.

[Sarah Shapiro]

Mine never lasts more than a season. Even if I try, it's impossible.

[Lauren Sherman]

Yeah. So I'd rather pay like 25. But it's a cute T shirt. It fits perfect. I like Carla. I'm a big fan. I bought her Hanes T shirts when she did a collaboration with them. And this T shirt is. She also has this period underwear brand called yes, the period Company. And somehow this is a collaboration with that. And there it's something goes to charity. But the interesting thing is it has a slight. It's off color a little bit and I wonder if it has a slight pink to it.

[Sarah Shapiro]

Oh my gosh.

[Lauren Sherman]

I think it's on purpose, not to get vulgar, but it was just really interesting because it looks like what my T shirts look like after they come out of the wash, no matter what I do.

[Sarah Shapiro]

Right.

[Lauren Sherman]

Like my T shirts never are white again. That's one of the reasons I don't really want to spend money on them because it's really hard to keep them looking really crisp white. We don't. I. Maybe we use bleach sometimes, but we're not really. And bleach yellows things anyway. I don't like to use bleach and it has like a slight. Like it already has. And maybe she did it that way because she knows your T shirt is going to end up that color no matter what. But it definitely has an odd cast to it. And I didn't know if it was some like not. I don't know. I'll DM her and ask her. She's pretty. She'll answer. I don't think that's one that she's gonna ignore me on.

[Sarah Shapiro]

And how does the fit compare to the Hanes one or the.

[Lauren Sherman]

I thought it was much better. Yeah. I have never. I didn't buy the redone or maybe the Hanes. It was like Hanes and Redone together.

[Sarah Shapiro]

Yes. I feel like it was all one.

[Lauren Sherman]

Collab that was boxier. This is like a very classic. I like. I like a dry hand feel. We were talking because you wrote about all these like slinky fitted T shirt brands that are trending like Floor Floor and Michael Starr's, which. Which were having a comeback. I don't like T shirts that are really close to the body. I like stuff that is sort of has a little structure and a dry hand feel and it's like really sits on you almost. You know, it just. It's almost square and it really had. Has that effect. It was like, sleeves are the right length. What the. The best T shirt I ever got was a Sunspell collaboration with the Gentlewoman. I still own it. Like, it's kind of ratty, so I can't wear it a lot. It's navy and it has the perfect length sleeves, the perfect neckline, the perfect. Like it fits close to the body, but not too close. It's very funny. I. I did a big piece on Dove Charney when he went back to when he relaunched when he launched Los Angeles Apparel and how. And I went to his house in Silver Lake. I ended up when we went to LA Barriers. I mean, it was truly incredible. I'll never forget it. But. And I knew him for years. I covered him for years. It's really funny.

[Sarah Shapiro]

He.

[Lauren Sherman]

I tried on this T shirt. I was wearing the Sunspell T shirt and he commented on it and he said, oh, that's a really good T shirt. And I said, oh, thanks. I explained. I said, it's Sunspell. But it was weirdly a collaboration with that. Of course, he didn't know what the Gentlewoman was or whatever. So then really interesting thing was he really wanted me to try on all of their T shirts. And he had like all his workers in his home folding and make like they were. It was basically they were working out of the house. I don't. I don't think he owns the home anymore. And at some point, like I went and to the bath. First of all, he was like, you can just try them on out.

[Sarah Shapiro]

I'm sure I'm good.

[Lauren Sherman]

I'm going to go to the bathroom. But somehow my T shirt did end up in his living room. I think I like Brought it out when I was. Because I tried on, like, 15 different T shirts. I did not take one. Everybody. He wanted to give them to me. I refused. But when I came out, he was photographing the T shirt.

[Sarah Shapiro]

Oh, my gosh. I'm sure. I mean, that's what a lot of these designers do.

[Lauren Sherman]

Yeah.

[Sarah Shapiro]

And, you know, I get it totally. And wanting to get the details, I'm wearing the Lisette one, which is one of the other ones I wrote about. I stocked up during their Black Friday sale. I'll say another thing about these basics is when you're in a shopping mood, but there's nothing that's catching your eye. Going back to the basics and stocking up on them is an easy way to be like, well, I feel good. I, you know, just bought something. So I bought the Lisette does the bundles, which I love, which it gets you to spend more. But it also is a way to bring down the price point of the basics and the way that Lisette does it. Also, you could buy three white T shirts. One white, one gray, one black. And they have a good cut. For me, I'm 5:2. I'm short. A boxy cut, if it's not cropped isn't great for me. So I like their shirts also because they don't feel too long on me, and they have a great fit there.

[Lauren Sherman]

I love that. For you and for every other person on the Internet wearing Lisette.

[Sarah Shapiro]

Yes.

[Lauren Sherman]

Okay, so we. We reflected on our purchases from the end of the year.

[Sarah Shapiro]

Yes.

[Lauren Sherman]

Let's talk about the future of the fashion, retail, and beauty industries. I wanted to have you on. On the special Friday episode to kind of on Thursday, I published my Year Ahead Notes, News and Notes of what. What to expect in 2025, but wanted to kind of break it down with you. And to start, let's talk pricing. Last year was it. A lot of people felt like the peak of the sort of overpriced luxury good that $5,000 handbags that should actually cost 3,500 or 2,500 or whatever. And just felt like all the rich people. There was a great article, a great opinion piece in the New York Times by this writer, Catherine Zarrella, who I know, who's a great, great writer and editor about how she's just, like, so sick of how much everything costs. And the idea is sort of like even rich people are. Are sick of paying. Paying these prices. The price value equation is lot is off. And so what you and I had talked about is this idea that most of these brands probably aren't going to do as much price hiking this year. But then I read this piece. I, I have Google alerts on all my favorite stock tickers. And there was a piece in, it was all over the Korean press actually about how a few brands are planning on doing price hikes. And this was like market intelligence. I haven't confirmed this with any of the brands, but it was published in several different places. So I think it's probably fairly accurate that, that Hermes Loro Piano, which is owned by LVMH Rolex. I think a couple other LVMH watch brands are all planning price hikes in January in Korea specifically. And it's interesting because there is, for years there was all this talk about price harmonization. So this idea that you would. The price of a bag is gonna be the same in every country. So the idea for luxury brands to harmonize the pricing is that it will deter people from doing shopping, tourism, like going to Paris. I know I shop in Europe a lot because especially if the, you know, the value of the euro is, you know, you can get deals. But also there are a lot of brands that are more expensive in the US because of import tax and things like that. So they were talking about that for years. But it sounds like this, this price hike was specific to Korea. I don't know if it's happening in other, in other countries now and if that it has to do with the value of that currency or what have you. But just curious what you think. You observe this market pretty closely and do you think we're going to see as many price hikes this year as we have in the last few years? Or do you think the brands that went overboard are going to sort of settle?

[Sarah Shapiro]

Yeah, I think the interesting thing about that article was that it really is the higher, higher end. So if you think of the brands, the 1% are shopping probably for their basics, their white tees as well. But that has a little bit more elasticity than some of the other brands. And I think the other is. And we saw this happening in the consumer packaged goods world last year, which was all the brands took their price hikes because they really needed to. And they were like, rather than doing it in multiple small increments, we're going to do it all at once and do a bigger price increase. And not only did the consumers, the customers get really frustrated, but the retailers target Walmart, grocery stores, Kroger, think of your local grocery store, larger grocery stores. They all got really upset because they saw the impact and they pushed back and in some cases they said we're not going to pass these on. And that definitely impacted the business. And so consumer package good worlds a lot of them ended up finding ways that they could pull back the prices. And I think it kind of became I wouldn't say like a warning to fashion but it kind of became something that obviously these teams are really watching. I mean across the board when they take these price hikes. It's not just a buyer in the company who's trying to take a look at the field and then say they're going to take these price hikes. There's like full on divisions that are just analyzing this and all they do is they're looking at the commodity pricing and everything. And so I think because of that they're trying to be really smart about where can the industry handle it, where can customers handle it, where will the stores handle it. And then we also usually see this after the holidays. It's usually after inventory in January. So we start to see price increases in January, February. So they're looking at recent sales and thinking through what is happening. So I think we'll see the big ones like it makes sense to take it for the real luxury luxury brands at the 1%. There's also been conversation about how Chanel is getting closer and closer to Hermes. So that could be something to kind of price right it a little bit.

[Lauren Sherman]

Yeah. And I would even say it's like the.0001% that are buying the stuff. So like we said Hermes Loro Piana which some stuff at Laura Piana is really expensive and then other stuff is. I'm not going to say it's this is the way Hermes is too. They're really I think modeling themselves after Hermes where Hermes could charge way more for a lot of their products than they do but they choose to increased prices more related to the. The cost of. Of making the goods that so. So yeah it's. It's interesting. I think Chanel they've said publicly I think they went a little overboard with the increases in pricing and and the product quality maybe wasn't there the Hermes. I'd say another big story is going to be like the Hermes Chanel battle. Whether or not Hermes sees Chanel as a competitor is a question. But what I would say and I think we're going to see a lot of that this year is that Chanel is trying really hard to be more like Hermes in the way it operates. And it's interesting because one is a fashion brand, and one is a leather goods brand. And I see the difference in those. Whether or not the consumer does is a question, but it'll. It'll be interesting to see whether or not those businesses start to look more, More similar. How do you feel? I have a very sneaking suspicion that you are a Chanel customer. You have a Chanel vibe. Do you. You at least own ballet flats.

[Sarah Shapiro]

Yes, I'm a big Chanel fan. I think some of that also came to when I came into fashion. Like, I became obsessed with fashion when I was very young. And because of that, I did a lot of reports. So like seventh grade, you have to do a French report. Who am I doing it on? Coco Chanel. You know, like, I made everything into that. So I am, I would say I'm also very much a real, real customer of Chanel. I mean, I am wearing one of my Chanel ballet flats at the moment, so it becomes hard to. For me to purchase it at regular price. But I also love the hunt of things. Like if there is a certain item that I love, I create on the realreal, where you can create obsessions, I think is what it's called. And you put in your size, what you're looking for. And to me it's like also the fun hunt. But yes, I also very much dress very classically and that fits, I think, the Chanel vibe in a lot of ways.

[Lauren Sherman]

Yeah. And one thing I was thinking about the other day about Chanel and the realreal specifically, there is so much Chanel ready to wear on secondhand. And that just means that they make a lot of money and ready to wear, like they sell a lot of clothes, which you don't see. You see a lot of old Saint Laurent, Reeve Gauche. You don't, you don't see, you don't see a lot of. And Louis Vuitton has a big fashion business abroad, ready to wear business. But you don't see like a ton of Louis Vuitton clothes on, on the real real. You don't see a ton of. Really not many Brits. Like, you just don't see, see a lot of it. And Chanel, there's so much and it just. At some point I should try to do like a back of the envelope to figure out how much the ready to wear specifically is bringing in. I mean, I'm sure it's billions of dollars, but it's, it's because the, the, the Louis Vuitton ready to wear business is giant. But maybe it's not billions of dollars, but it's a lot of money. It's way more and I'd say proportionately, probably more. That is another thing that's similar between Hermes and Chanel, which is that Hermes also sells a lot of clothing and a lot of jackets and things. I My obsession on the RealReal is Margiela Hermes, and I'm constantly buying, like, little sweaters from that era and things like that. How are you feeling about MeToo, lazy and Chanel? Are you as a consumer of the brand, are you like, super pumped? Do you think it's not going to really affect what's in the stores? How are you reacting to it?

[Sarah Shapiro]

I think this is one of those things where it's like, it's kind of hard to decide. Oh, I have an opinion about this because the decision was already made. So the bigger part for me was I was. You know, I think it's a bummer to see Lazy leaving Bottega Veneta. I think the collections have been like, so great there. So I think that is one thing. And then I'm trying to picture him at Chanel and it's like, in some ways I want to be surprised, like, if there's a new designer, you want to see kind of the impact from that, but also take into account all the Chanel identities, whether it's the chain or the tweed, the pearl details, like the black and white combinations, like, you want to see that still really live there and see a new twist on it. So I'm excited to see that. There was a really interesting story, I think right around the time Virginity left, where they had AI design what each of some of the people who had been talked about what their collections would look like. And it was kind of wild, like how it could take that, their background, and bring it to Chanel. So I'm really interested also to see if it takes on that impact.

[Lauren Sherman]

I agree and I am excited to be surprised as well, because it will be. Hopefully it'll be very inspiring for everyone involved.

[Sarah Shapiro]

I mean, change is good. It also then makes the last couple of collections, you know, their new reason for searching it on the RealReal or something. So I think that it just is another chapter. And I think these businesses need those ups and downs and changes to happen.

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[Lauren Sherman]

Speaking of change and change being good or being bad. So last year in 2024, there was so much consolidation in luxury retail. So there were, there was consolidation. Stores closed. It was like for years and years and years I was writing about the online luxury wars and whether there'd be a winner take all. And in the end, like nobody really won. But just to run down what happened last year, Farfetch was acquired by Coupang in January. Matches shut down in I think end of June. Ynap was acquired by Mytheresa. Well, it's a, it's being acquired. A deal was brokered and that'll happen this year. Saks finally acquired Neiman Marcus Group. Generations of Saks executives wanted there to be a merger between these two companies and it finally happened and will go into effect it just felt like everybody in multi brand retail at the high end, it was just such, everything sort of fell apart and came back together last year and now we are going to experience it as consumers as this year unfolds. So what do you think is going to happen? Do you, do you think that, how are these, all these changes going to affect the consumer experience if at all? And also like what else do you think will come out of this?

[Sarah Shapiro]

I think, I mean the industry needed something to happen and whether or not this is the right thing, we'll see unfold. But the other part of it is shoppers are frustrated with different experiences and they want an experience when they go to shop and stores need it. I mean there were also reasons that they couldn't shrink. Like maybe it was real estate deals, too much space. So this will allow them to be able to make some of these changes and make hopefully a shopping experience a little bit better. I think we're going to see a lot of these retailers test different ideas to see what sticks and hopefully if they try 10 different things, at least one of the test is positive and it's good for a shopper.

[Lauren Sherman]

Yeah, you were telling me and I somehow I missed the memo on this. I need more press releases from Saks Global, I guess, but in San Francisco, the Saks store is by appointment only.

[Sarah Shapiro]

Yes. This happened in late August.

[Lauren Sherman]

I guess they didn't want people to write about it.

[Sarah Shapiro]

I know, I know.

[Lauren Sherman]

So why did they do it? Did they explain why?

[Sarah Shapiro]

So I read and I think because I know I read about it, but I actually think it was in our local like San Francisco Dispatch papers, San Francisco Chronicle or something. So it wasn't something that I read in a huge way. But downtown San Francisco, I mean the Nordstrom pulled out. There's no Nordstrom in downtown San Francisco now. The Macy's has said they're going to close and the Mayor London Braid is challenging that and trying to keep them. So I feel like that's a big question. But we have, we had a great Saks and we have a beautiful Neiman's. And the Saks quietly went to appointment only, I believe for two reasons. One, the store just wanted to cut down on the sales associates and how many people were there. And I think the other reason is security here. I mean theft in the Bay Area has been terrible. Even out in Walnut Creek where I live closer to in the suburbs. I think it was last Christmas where there would be these car. Like there are certain streets you can't drive down now because there would be cars that would just drive down. 30 people would run into a store, smash and grab stuff and come out. And it really, really impacts these stores. And so I think Saks is a way to kind of manage that. Went to appointment only. So now you walk into the Saks and you either have an appointment ahead of time or you have to scan and request one and hope that they have a person. When you walk in and you're in like a waiting concierge area when you first come in, so you can't even see into the store. It's. They've made it a really nice check in area. But that used to be the regular walk in area. And then you'd walk into the beauty floor. It's not like that. And then also the store used to be, I want to say four stories. It's two stories now. And you can see up in the stairwell and see that there's completely empty floors.

[Lauren Sherman]

That's so strange. I mean, I, I understand. I think it's the context of San Francisco and what's happening there with retail and, and that probably has something to do with it, but it is. I mean this is the beginning of. They need to change format. They need to. Nordstrom has those Nordstrom locals, but those aren't stores. It's like pickup drop off.

[Sarah Shapiro]

Right.

[Lauren Sherman]

And they've. I think they've been successful because they've kept them open.

[Sarah Shapiro]

But yeah, that works really well. Like in New York.

[Lauren Sherman]

Yes. Yeah.

[Sarah Shapiro]

And I'm sure in spots in la.

[Lauren Sherman]

Yes, there's one on Melrose Place. And Melrose Place is an interesting shopping area because it's like tourists and then people who drop $70,000 a pop at the Row. Like there isn't really. It's not busy. Like you don't see a lot of people walking around the way that you do. But, but I think for it, that neighborhood, it, it makes it easier to drop stuff up and pick stuff up. So. Yeah, I think you're right. I also, I'm hoping that what this does is gives us an opportunity to see new store openings. Like there is absolutely fabrics in Toronto, which this designer, Kalyn, she launched probably a year and a half ago. There's more. I think people who want to run independent boutiques are. They're taking the leap because they want to go shopping and they want to have a good time. And there is something to be said about the capitals and the omorese of the world, the McMullens, where you have a really loyal customer base and you can, you can keep A business if you don't go nuts and you don't open like 14 stores and, and get some investor who expects things that are never going to happen. It's all about like managing the scale of those independent operations. But the other thing is I do wish someone, I do wish an investor and a smart retailer would think about opening a chain that is like, caters to the modern customer. A friend of mine said she went to, I think Marissa yesterday, the other day on the podcast. But another friend mentioned this too. Like Marissa, Marissa Meltzer said she wanted cotton rib tights. And, and I think she went to Bloomingdale's. And they didn't. They were like, we don't have that. The hard thing is I remember years ago going to the Grove before I lived in L. A. I was looking for a sheer turtleneck and to wear under like a slip dress for New Year's or whatever. This probably 2018, 2019. And there was just. You could find a million online, but I needed one for that day and there was just nothing. And I don't think retailers know what to put in, in the stores. And it almost feels like there needs to be new money, a new concept that can figure out, like, what should the inventory in store be? Because it has to be discovery, but it also needs to be practical stuff that you need that day. And I don't think any stores have figured out that balance. It feels like a lot of just three or four brands that they know people buy and then nothing else. And it's. And it's challenging because people don't really feel like they have time to go shopping in stores. So you have to like, give them a reason. It has to be tourism. It's.

[Sarah Shapiro]

It's super complicated, but you also want it to be a fun experience. I loved the rib tight example because it reminded me of two things. One, when a lot of stores started to figure out omnichannel, which meant the same buyers and the same person managing online and in store. So this happened 2010, 2011, a lot of stores started going omnichannel, where the buyer managed both, but also the stores tried to do fulfillment through the stores rather than one warehouse. If that is done right, then you can figure out having the tights in the store and also managing the fulfillment. So it's like there's that block that hasn't quite happened yet. The other example that I loved that for was back when I was at Bloomingdale. So this is a long time ago. I remember they pulled up as part of our training an example, they did not show the person's name but basically showed the best customer and what they were purchasing. And they were purchasing pantyhose. And when you think about it is because it was their local store. It was somebody that lived a few blocks away from the 59th and Lex street store and she was coming in to buy her basics. And so if the stores really want to cater to the best customers, they're going to think about well, what is this customer, what are they coming in for and what do they need? And I think that tights example that Marissa gave is just a great example of that.

[Lauren Sherman]

Such a great example. Oh man, I'm glad I'm not one of the people running these things.

[Sarah Shapiro]

It's hard.

[Lauren Sherman]

It's very, very hard.

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[Lauren Sherman]

Usaa. So let's talk a bit more about the mall and the the specifically the so called mall brands which I've been tracking. Zach Posen joined Gap Inc. Last year. Richard Dixon really ramped up as the CEO. He's working to sort of revive all the Gap Inc. Brands from Banana Republic to. By the way, I got a reader question. Who's going to be the new CEO of Banana or president of Banana Republic? If you know give me a call anyway. Or call Sarah because she lives in San Francisco. Probably knows you. So Abercrombie had these banner few years. Gap had is doing pretty good. They're all sort of the thing right now. J. Crew has had a really amazing marketing turnaround and brand transformation. Smaller brands like Mickey Drexler's Alex Mille seems to be doing super super well. Like these brands that don't charge an arm and a leg but that still have some equity. Brand equity are really, you know, people are paying attention. I know Mickey would not want to be put in the category with all those other brands, but. But, you know, I just. The point being that, like, people are returning to those kinds of brands and not just thinking about Zara or Louis Vuitton like they are. They are seeing if there's stuff in the middle. What do you think happens this year? Given. Especially given there are, like, the threat of tariffs. There are. There's general consumer wariness. There's the fact that, like, it's just hard to make a profit on this stuff.

[Sarah Shapiro]

Yeah, I think we'll see. Well, each of these brands, I feel like, also have this niche. Like, Abercrombie is doing really well, I think with high school or college and the age, like, right out of college. Although I am seeing that across the board, people love their denim, and that is across all different age groups and demographics. I think Gap. It's interesting when I think of Gap, all I can really think of right now still is the sweatshirt. I don't see a lot in terms of, like, them doing a fashion item. I guess back in the day they had the chinos when that became a trend, but that hasn't been a trend. And so I don't know what they've really leaned into. I think a lot of it will also be on the back end, management for all of these stores and how they're able to manage inventory, which is a way to not have to discount too much and to keep their margins up high enough. And Alex Mill has done really well, I think, with wearable clothes that people just want to wear every day, like an outfit that you could wear to work in this business casual environment. So I think the biggest part is making sure they can manage inventory really well and handle the P and L from the aspect of not having too many losses.

[Lauren Sherman]

Yeah. It's funny what you just mentioned, the where to work. And there is a through line in Mickey's career. And I don't know if he'd think about it this way, but he really has been the king of where to work.

[Sarah Shapiro]

Starting at Ann Taylor, even.

[Lauren Sherman]

Yeah, Ann Taylor to start. And then where he was sort of like the 1980s, women are going to the office, blah, blah. They're wearing a suit with sneakers. Ann Taylor nailed that. And then a Gap business casual, like denim to the office, casual Fridays, khakis. 20 years of that. And then at J. Crew, remember the pencil skirt, that bubble? Yes.

[Sarah Shapiro]

The Michelle Obama look. Yes.

[Lauren Sherman]

Yeah. And now this even more casual Culture we're in, which he helped to usher in. But like the work jacket, the sweater, the soft pants that aren't exactly soft pants. Like, it's. It's itching now. I feel like Alex Moen. This says Somsack, the designer, is. A lot of. This has a very Italian feel to it. There's something about.

[Sarah Shapiro]

Yes. And they do a lot of collabs with. I think they've done Italian shoes, Italian pajamas, Italian loafers. Yes.

[Lauren Sherman]

What's that word? Sprezza. Something that is. Means Italian style. I don't. I'm. It's gonna take me too long to Sprezzatura. Yeah. Like, it's Italian sprezzatura. It's a certain nonchalance or studied carelessness according to the AI overview. But that's what I think Alex Mill has really nailed and is of this time specifically. So, Sarah, I think we're gonna wrap things up soon, but I wanted to ask you one more question. We love a deal at Puck, at Line Sheet specifically, Rachel covers beauty, M and A really closely, and I cover. There wasn't a lot of M and A in fashion last year, and there weren't a lot of investments. Like, I think there's gonna be. My prediction is that there's going to be a lot of smaller investments, probably most of which we won't ever hear about because they're so small and no one's going to be publicizing them. I think one thing that's interesting is every time a brand would get an investment, you know, three or four years ago, they would do a big story in business of fashion or WWD and like, brag about it. I don't think people are going to be doing that anymore. Because the problem is when you do that kind of investment, you do that kind of press, and you're like, we got an investor, blah, blah, blah. You have to share certain information. And also it makes the reporters try to find even more. So they start to look for what your annual revenue is. They want to know if it's a majority or a minority investment. And then they keep tabs on you. So if the investment doesn't work out, then it's not good. So I think a lot of these brands are going to keep it a little more under the radar. Obviously, we will be working to find out the news for you all. But I do think there's obviously going to be big M and A in luxury because Capri is trying to sell Versace and Jimmy Choo. I think Tap, there's a huge chance that Tapestry, owner of Coach, will try to acquire a brand after the fallout of the Tapestry Capri merger that never was. But I think they will try to find something that isn't as close competition with Coach. But what else do you think is going to happen? There's the Skims. IPO seems almost inevitable at this point. What do you see in the world of M and A, especially in. In your world?

[Sarah Shapiro]

Well, I think also as you and Marissa were talking about Glossier, the idea that they've brought on so much money that they are valued at a certain amount. So I think some of these brands don't want to take on investment that values them too high because then it makes it even harder to have an exit because it has to be even greater than that. So I think there's a lot of things that. And as well, investors and VCs are saying that maybe fashion is not, you know, it's a. It can be a good investment, but it's really hard to have a very solid exit. I think Skims is certainly the most exciting right now. And they haven't. They just keep on having increases and exciting and the new stores opening. I think people want even more stores so they have a large footprint that they can move towards. What else do I think you made.

[Lauren Sherman]

A good point about like all these VC firms or. Well, private equity. A lot of these private equity firms have gotten out of consumer. We just saw that Kim Kardashian's private equity firm, she somehow access reported that she's sort of backed away from it. The guy who runs that used to run the consumer practice of the Carlyle Group, they've like their Carlyle Group, which did supreme and all these other brands, Beauty Counter, they're like, we're, we're good. The thing I would say though is that these investors have very short memories and a lot of people are probably jealous of that cap table over at the Row. And they want to feel the good vibes that all the investors, the Wertheimers, Nick and Natalie from Imaginary, all those people are feeling about having this brand that has so much potential to grow the challenges. And I think Nick and Natalie, Nick Brown and Natalie Massine at Imaginary, they have a very specific understanding of how the fashion industry works. Natalie is the founder of Net A Porte and she was a fashion journalist before. Nick has been an venture capitalist, I think his entire career. But he invests. He was a really early investor in Outdoor Voices and Everlane. And some of these things worked and some of them didn't. And so they have A very unique understanding of what the fashion industry is. And I don't think a lot of these private equity firms. Another one that I think has done a really good job in fashion is Premier. They've been investing in the category for, you know, decades. And they make good choices. They were. They. They've made bad choices, but they've learned from them. Most of these firms don't have the, like. I don't know what the word is, but why not? You rub your two fingers together. They don't have that to understand what to invest in. I have a friend who's an investor, private investor, and he has really good taste. Sometimes he invests in things that are horrible, that we would never want to ever look at, that we've never even heard of. Sometimes he invests in stuff that we're really into and think, cool. But the thing is, he understands consumer sentiment and he knows what consumers will be attracted to, even if he himself finds it to be vulgar or disgusting or whatever. And I think the problem is that a lot of investors don't have that ability to sort of like, understand what makes a consumer tick when it comes to apparel in particular, and honestly, beauty too. But beauty is just so much easier to get right. That I think they make fewer mistakes once the business is big. And if it's poorly managed, then it doesn't matter. But generally it's easier to scale those businesses. But I do wonder if some of these investment firms are going to raise their eyebrow again or just take a peek at some of the brand decks that are going around simply because the Row looks so good on paper. And I'm sure they're all very jealous they didn't get in there because, you know, a lot of them probably wear. Wear the Row, or at least their wives do. And I remember Jen Hyman from Rent the Runway telling me that even when she was raising like they had raised a lot of money already, she would still get the. She would go into these meetings and the guy would say, let me go ask my wife.

[Sarah Shapiro]

Right, Right. Well, it's also. I mean, Allbirds is probably another great example of what do you see constantly in your own life? And then maybe you figure you'll invest in that as opposed to thinking, what is the long term? What else are they going to go into? Well, that customer is wearing Lululemon or aloe, so they're not really going into Ready to Wear, so how are they really growing from there? And that's the challenge. But I do think the ability to see past and to be Able to see the future and have that gut instinct. It's what makes a lot of merchants really good at what they do and needing to balance it with understanding the business side of it and where is the income coming from? I think Birkenstock was another interesting story. I think they seem to be doing well, but everybody is still questioning them because they're not seeing the huge increases that people want.

[Lauren Sherman]

This is the short term thinking of the investment community. They don't understand. We know that. I mean, congrats to everyone at Allbirds who made a ton of money. I like all those people. I'm thrilled for them. I knew the minute I saw that Allbirds that it was trash like that it would never be a long term thing. And you know, you never know, they might have new management come in and they might create a new product. There's always a chance. It's all about product. But Allbirds in its initial iteration was not a long term idea. It was an idea to make money short term. Birkenstock is the Levi's of shoes. Like it's not going away around since the 1800s. It's. But you know, this is the thing. The best of luck to all of them. Sarah, great, great point. I'm so happy to have you at Puck and Line show.

[Sarah Shapiro]

I'm so excited.

[Lauren Sherman]

And next week you are, you're going to be manning the ship two days a week, which is very exciting. And you're going to the. One of your first topics is the wild world of affiliate marketing, which we're. We can't get enough of.

[Sarah Shapiro]

As I said, it's like a soap opera, just that category. So I'm really excited. I mean line sheet we're going to five days a week. You have the Insider circle. We have a Friday Shoppies.

[Lauren Sherman]

Friday Shoppies.

[Sarah Shapiro]

Yeah. It's going to be so much fun.

[Lauren Sherman]

It's going to be so fun.

[Sarah Shapiro]

You know, Rachel and the world of beauty is. I mean between Rhode and Glossier and Estee Lauder. We can't get enough.

[Lauren Sherman]

No, we cannot get enough. We love you, Rachel. You'll never be on this podcast because you don't like doing podcasts. But that doesn't mean we don't love you as all of our children. Okay, Sarah, it was great to catch up. I will see you on Monday.

[Sarah Shapiro]

Sounds good.

[Lauren Sherman]

Fashion People is a presentation of Odyssey in partnership with Puck. This show was produced and edited by Molly Nugent. Special thanks to our executive producers, Puck co founder John Kelly, executive editor Ben Landy and director of editorial operations, Gabby Grossman. An additional thanks to the team at Odyssey, JD Crowley, Jenna Weiss Berman, and Bob Tabador.