Tariffs & The Art of Retail Maintenance

Summary

Fashion People Podcast: Episode Summary Episode Title: Tariffs & The Art of Retail Maintenance
Release Date: April 15, 2025
Host: Lauren Sherman
Guest: Jonathan Schley, Senior Vice President at CBRE, Retail Advisory and Transaction Services

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Introduction

In this episode of Fashion People, host Lauren Sherman engages in an insightful conversation with retail real estate expert Jonathan Schley. The discussion delves into significant industry developments, including Prada's acquisition of Versace, the impact of recent tariffs on the fashion sector, and the fluctuating fortunes of direct-to-consumer (DTC) brands like Glossier.

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Prada's Acquisition of Versace

Timestamp: [09:00]

Lauren Sherman kicks off the episode by discussing the notable acquisition of Versace by the Prada Group for approximately $1.4 billion—a price less than half of what Capri paid for it in 2018, adjusted for inflation. She contextualizes the deal within Versace's struggling performance and Capri’s failed merger attempts with Tapestry.

Key Points:

• Versace's Decline: Despite a post-COVID fashion boom, Versace experienced stagnation and decline.
• Prada's Strategic Move: Schley perceives this acquisition as an opportunistic move by Prada to leverage Versace’s valuable real estate in key markets.
• Brand Synergy: With Prada, Miu Miu, and Versace under one umbrella, Prada can diversify its consumer base and strengthen its market presence.

Notable Quote:

Jonathan Schley [10:49]: "Versace actually has quite good real estate despite their lack of performance in a lot of primary markets that are otherwise competitive. So from that perspective, it feels like a good opportunity for Prada to plug in some Miu Miu stores in some prime Versace real estate."

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Impact of Tariffs on the Fashion Industry

Timestamp: [22:48]

The conversation shifts to the implementation of tariffs, initially slated for April 2, and their repercussions on the fashion and retail sectors. Lauren and Jonathan analyze the unpredictability and potential long-term effects of these economic measures.

Key Points:

• Uncertainty and Delays: The anticipated blanket tariffs faced delays, with many tariffs likely to be negotiated or modified.
• Real Estate Transactions: Schley shares personal experiences of paused and resumed retail deals amid tariff uncertainties, highlighting the resilience of long-term luxury brands.
• Economic Strategies: Discussion on how private sector strategies often outpace public sector policies, with Schley expressing confidence that tariffs won't cause lasting disruption.

Notable Quotes:

Jonathan Schley [23:44]: "I think there's probably good opportunities, you know, but that's. So Versace actually has quite good real estate despite their lack of performance in a lot of primary markets that are otherwise competitive."

Lauren Sherman [27:58]: "I think for me, the conclusion I came to, which was pre tariffs going to be this way anyway, is the next two quarters are going to be kind of shitty because the economy wasn't going to be good no matter what."

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The Trajectory of Glossier and DTC Brands

Timestamp: [37:53]

Lauren Sherman brings attention to Glossier's recent struggles, referencing Rachel Shugatz's reporting on the company's decreased valuation and funding challenges. The discussion explores the sustainability of Glossier's DTC model and its potential to rival established giants like Estée Lauder.

Key Points:

• Initial Success: Glossier's innovative drops model and strong community engagement positioned it as a modern beauty brand leader.
• Challenges Faced: Market shifts, the end of the COVID era, and leadership changes have led to a decline in Glossier's market presence and brand momentum.
• Media Relations: Schley notes the disconnect between customer loyalty and critical media coverage, suggesting that negative press can overshadow core strengths.

Notable Quotes:

Jonathan Schley [42:00]: "Glossier is definitely, at least from my perception, lost the zeitgeist element."

Lauren Sherman [43:23]: "They had offers to buy it and she should have sold it in 2018 when it was valued at like a billion dollars."

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Founder Influence and Brand Sustainability

Timestamp: [46:23]

The discussion broadens to the impact of founder-centric branding on long-term brand viability. Schley emphasizes the risks associated with brands heavily reliant on their founder's personal brand and public persona.

Key Points:

• Founder Syndrome: Brands where founders are the face often struggle to maintain momentum once the founder steps back or departs.
• Brand Evolution: Successful brands require strategic repositioning and leadership that can transcend the founder's influence.
• Case Study - Skims: Contrary to Glossier, Skims is highlighted as a brand successfully navigating founder influence, maintaining strength beyond Kim Kardashian's direct involvement.

Notable Quote:

Jonathan Schley [48:31]: "I think they've done a very good job at not actually leaning too heavily on, on her impact."

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Conclusion

The episode wraps up with Lauren Sherman and Jonathan Schley reflecting on the interconnectedness of real estate, brand strategy, and economic policies in shaping the fashion industry's landscape. They underscore the importance of adaptability and strategic foresight for brands navigating both internal challenges and external economic pressures.

Final Remarks:

Lauren Sherman [51:02]: "Jonathan, thanks for joining me. This was so fun."

Jonathan Schley [51:05]: "My pleasure. Thanks for having me."

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Takeaways

• Strategic Acquisitions: Prada’s acquisition of Versace underscores the importance of strategic real estate assets in luxury branding.
• Tariff Implications: Tariffs introduce uncertainty but also opportunities for brands with robust, long-term strategies.
• DTC Challenges: Direct-to-consumer brands like Glossier must continuously innovate and manage founder influence to sustain growth.
• Brand Resilience: Successful brands balance founder influence with strong, adaptable leadership to maintain market relevance.

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This comprehensive discussion provides valuable insights into the intricate dynamics of the fashion industry's business strategies, economic influences, and brand management challenges.

Transcript

[Lauren Sherman]

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[Jonathan Schley]

What moral right would I have to call on my fellow Russian citizens to stand up to the Putin dictatorship if I didn't do it myself?

[Lauren Sherman]

The second season of Pulitzer on the Road premiered March 10. Follow and listen on Apple Podcasts, the Odyssey app, Spotify or wherever you get your podcast. Hello and 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 retail real estate guru Jonathan Schley. We're talking Prada, Versace, Tariff Mania, Glossier's Down Round, and plenty more. Hi everyone. Hope you are having a great week. I am actually on vacation this week. I'm in Tokyo with my family. So the next few episodes are going to be a little bit more evergreen than usual because I'm chilling out this week on Line Sheet. I've got some details on the state of Louis Vuitton's factory in Texas, which has faced plenty foreseeable challenges since its opening in 2019. I thought the Reuters story on the factory and its struggles was really good but at the same time maybe not understanding what the point of the factory is. So I got into that in my piece. It's worthwhile reading both of them, I think. I also have an update on the search for the next editor of Vanity Fair, and I also did an unscientific survey on the best running tights with pockets. The answers may surprise you. Sarah Shapiro takes a look at Love Shack Fancy and analyzes whether their licensing strategy is working. I personally think of Love Shack Fancy as sort of a shabby chic meets Betsy Johnson situation, and I assume licensing is the way to go as they inevitably lose their luster with tweens and teens. You can't be cool forever with that crew, especially when that crew becomes young adults who think it super tacky to wear Love Shack Fancy miniskirts. Anyway, enjoy and I will be back with a quick update for you on Friday. Jonathan Schlay welcome to Fashion People.

[Jonathan Schley]

Thanks Lauren. Thanks for having me.

[Lauren Sherman]

So before we get started, this is a news day, so we're gonna just run through a bunch of interesting topics that I know you have an opinion on, but maybe you can I met you years ago through the journalist Misty White Seidel, who has actually been a guest on this podcast and writes a lot for the New York Times at the moment. But she was working at WWD at the time I think, and intro'd us because you your background is is super unique. You are a retail real estate person advisor and then you also have done a lot of writing yourself, especially about cars for the likes of high school, etc. But how did you get into the fashion business?

[Jonathan Schley]

So I mean I sort of reject saying I'm in the fashion business. You know, I'm I am a senior vice president at CBRE for what we call retail Advisory and transaction services, which is a really long winded way of saying a real estate broker, but primarily work with brands in the luxury apparel, beauty, home space, etc, focusing on their retail strategies globally. And how I got into that with was quite randomly actually. I started in hospitality at Ace Hotel, as you know, or I should say for one of the owners of Ace Hotel, focused on the retail in those projects, in physical spaces in those projects. So I've always sort of approached those relationships in a more brand partnerships way than a transactional real estate broker way, I would say, and then sort of accidentally became a real estate broker after those after that, mainly after the project in downtown la which was when you and I first met.

[Lauren Sherman]

So got it at some point for another podcast not for Fashion People. But the, the ownership structure of hotels is so fascinating. We cannot get into it right now. But the Ace Hotel in particular, I just stayed at the one in Brooklyn and this is like my husband and I talk about the ownership structure of hotels for like hours. It's so, so fascinating.

[Jonathan Schley]

Very complicated and very differentiated, especially geographically. So.

[Lauren Sherman]

Yeah. But if you all have ever been. Is the Ace Hotel still in downtown LA or is that, is that still an Ace?

[Jonathan Schley]

No, I think sadly not.

[Lauren Sherman]

Yeah, yeah, I used to stay there before I lived in la. This. There was an Ace Hotel downtown. And anyone who stayed there who has been downtown la, not the arts district Downtown. Downtown would know that there's like an ASOP around there. An acne. There's all these great stores around the Ace and I don't know which ones you were responsible for and which ones you weren't. But the. I remember that acne store opening in that incredible. Was like a art deco building.

[Jonathan Schley]

Eastern Columbia building.

[Lauren Sherman]

Yeah, Eastern Columbia building. You were really integral.

[Jonathan Schley]

Those were my. Yeah, those were my deals. Yeah. I, you know, I always sort of just say I just got really lucky to always have really good calling cards in the sense that, you know, working with Ace. And then my first retail deal was Acne Studios downtown la. Right. Which is a pretty good place to start. So fortunate in that regard.

[Lauren Sherman]

Yeah. So it. So it's an interesting place to be coming from and then you're upset. Anyone who follows Jonathan on Instagram knows he is a big Porsche guy and is also just like a car expert. Once he changed a flat tire for me when my husband was at Outtown.

[Jonathan Schley]

I did.

[Lauren Sherman]

Although honestly, even if Dan had been in town, I probably one of my great pleasures, I was near your home and I was like, this guy will actually come do this and be able to do it and it's not going to be like a five hour thing. So thank you for doing that for me.

[Jonathan Schley]

My sincere pleasure. Anytime.

[Lauren Sherman]

I still owe you like stakes or something?

[Jonathan Schley]

No, it's all good.

[Lauren Sherman]

Okay. So. Oh man. I. Maybe you should come back to talk about fashion, retail, real estate. Because I do have like a gazillion questions about that and, and how that stuff works. And you're obviously your. Your rivalry with jlux, which is probably just in my head.

[Jonathan Schley]

It's not a rivalry.

[Lauren Sherman]

Every time I see a JLUX photo, I think of you or whenever I see a Schlei and your business partner post on a. On a building, I think of jlux. So might not be a rivalry, but I love not a.

[Jonathan Schley]

Not a Rivalry, but naturally a competitive business.

[Lauren Sherman]

Yes. Anyway, so last week was an interesting week in the fashion business because of all this tariff bs. And I do want to get to that because I know you have lots of opinions on it. But first I wanted to talk about the big deal news, which was that Prada acquired Versace from Capri. The Prada group, which includes Miu Miu, Prada, churches and a couple other brands. Marchese, the. The candy. Yeah, Patisserie, essentially, candy store and. And a few other little things. They acquired Versace from Capri, the American group that owns Michael Kors and Jimmy choo, for essentially $1.4 billion. Not half of what Versace paid. Well, half of. Less than half of what Versace paid for it, adjusted for inflation. But, you know, whatever. It's. It was not. I mean, less than half of what Capri paid for it in 2018, adjusted for inflation. But honestly, not a terrible deal given the state of Versace right now. The state of Capri, which tried to merge with Tapestry and the SEC said, no, we're not allowing. Oh, the FTC said, no, we're not allowing it. So it's just been kind of. Versace is kind of a mess. It was growing and then it stopped growing and has actually seen a lot of declines. Even in an era when there was a big bump in a post Covid bump in fashion, Versace was struggling. So now it's owned by Prada Group, Italian company in a transition between generations, there's a CEO who's not part of the family, but the next CEO will likely be the son of Nuccia Prada and Patrizio Bertelli. What do you think about this deal for Versace and for Prada?

[Jonathan Schley]

Yeah, I mean, look, my experience is always going to be informed by the real estate. And when I enter, when I interact with brands, you know, either just socially as peers or professionally as clients, you know, I think the conversation about them, what I always find fascinating is that you kind of have, you know, I think like real estate guys typically are the ones who kind of. Historically you'd expect to know the least. Right. But they've tended to become. And when I say real estate guys, I mean like landlords and things like that. You know, they've become pretty sophisticated, knowing the brands that are, you know, cool of the moment, zeitgeist, etc, whatever you want to say. And I think that, you know, Versace in my world, just hasn't really been in part of the growth conversation for a really long time on that basis. You know, in Fact, the opposite. Like getting rid of some stores for performance reasons, you know. So from that perspective, it's just sort of a little bit of a nothing burger. You know, I think Mu Mu, obviously, you know, when they had their last downtrend, Prada absolve themselves of a lot of that real estate very quickly for Mew Mew. So I think now on the tailwinds of Mew Mew being like super hot, you know, they're probably under distributed right from a. From a retail perspective. So I think there's probably good opportunities, you know, but that's. So Versace actually has quite good real estate despite their lack of performance in a lot of places, in a lot of primary markets that are otherwise competitive. So from that perspective, you know, my lens is just, it feels like a good opportunity for Prada to plug in some Mumu stores in some prime Versace real estate from a brand perception perspective. You know, look, I think, you know, Prada, Mumu, Versace, from my view are three very different brands, you know, three very different prongs of consumers. That probably gives Prada as a group a lot of coverage on different types of consumers. It's, you know, it's that simple for me.

[Lauren Sherman]

Yeah, that's very similar. And I didn't even ask you for your opinion on this. And that's pretty much exactly what I wrote in line sheet last week was I know they have real. Versace has really good real estate. You mean needs to ramp up distribution to ride this. You know, they've been growing. There was quarters where they grew over 100%. Like that's not going to keep. And I think people don't realize how small you Mew was prior to this explosive growth. Like, and it's still a very small company. So I would say that like they're going to ride this as long as they can. But I think on the. So the real estate totally makes sense. It was worth it for that. And. And as we both know, it always goes back to real estate. But I think on the consumer point, one thing that keeps coming up, which.

[Jonathan Schley]

I think is like I made the joke. Sorry not to cut you off. I made the joke that now they have a brand for Miami LA in New York.

[Lauren Sherman]

Well, exactly. It's a hundred percent true what you would say. Mew Mew is la. Yeah, yeah. I went to lunch with someone on Friday at San Vicente Bungalows and she was wearing Miu Miu shoes and had a Miu Miu sweater. And everything else was like not designer or it was designer, but like not super obvious, but it, I mean, she looked really cool actually. She was definitely the best dressed person at San Vicente Bungalows on, on Friday. But yeah, I think that the other thing is there are always cycles of what is in and what is out. And Prada has a sort of a base customer that never really leaves. Like a lot. I would say it's probably a woman in her 30s or 40s and there is just a person who's always going to want to buy something one piece from Prada every season. But there is also it that's limited in terms of who that reaches. Like, Prada is probably the most universal of those three brands, but it's still not. I agree, it's, it's not for everyone.

[Jonathan Schley]

No. But I also think it's the most evergreen from my perspective.

[Lauren Sherman]

Right.

[Jonathan Schley]

Because they're never, they never at least publicly, you know, in the media wars of luxury, they never seem to be trying to compete with the other big three, let's call them. Right. They just, they continue. I think they're pretty good at staying their own lane. Right. It's like, it's, you know, it's like Stussy versus Supreme. Like I would say, like Stussy is the product of streetwear and supreme is the LV trying to like bigger, bigger, bigger, all in your face, et cetera. Right?

[Lauren Sherman]

Yeah, no, that's 100% true. And it's a good base for a group. And it's really interesting. A lot of the people that I've talked to or a lot of messages I've gotten have been about the fact that Prada tried to build a group in the late 90s, when Gucci Group was forming, when LVMH was acquired, acquiring a lot of brands and hiring young designers to refresh them and sometimes relaunch them. And Prada, the Bertelli's bought Jill Sander and Helmut Lang and it was an epic failure. They owned them for I think less than five years or just about five years. They sold them for nothing. It was, it didn't work. And there are several reasons. This is very different. One is that Prada, Helmut, language and Jill Sander were all of the same thing. Like if you were a customer of one of them in the 90s, you were probably a customer of the other one. Or, or maybe you're a helmet person and you occasionally wore Prada accessories or you were totally Prada, but you had Jill Sander Coates or something like that. And, and so there wasn't a lot of differentiation. And also they didn't have the experience. Bertelli, who was. And Mucha, who were the, and they were co CEOs for a time, but Bertelli, you know, really running the business in the late 90s. This was. No one had done that before. And so when you look at what, what they're building now, first of all, Bertelli is essentially retired. They have this interim CEO who he's not interim, but he's sort of in between. Lorenzo Bertelli and Prada's child will eventually become the CEO of the company. Company. But, but this guy Andrea, who's, who's the CEO. He's, he's an operator and he's, he's managed Luxottica. Like he has a lot of experience. So I think the idea that they are going to get the Miami crowd. And also we are moving out of a phase of like, we went from logo mania to this subtle sort of normcore high fashion, if you want to call it quite it, luxury. And now I went to the last Versace show and it was sort of, it was really funny. The woman that I was sitting next to, a fashion critic, said, this is the worst show I've ever seen. And she was being hyperbolic. But then Kathy Horan gave it a great review. So it was interesting because I personally really enjoyed it and thought there were like all these fun ideas in it. It was a little bit wacky, but. But I think there is a customer who will always be there for the glitz and glam. But then also it just feels like everybody has a black cashmere sweater at this point. We need some different stuff.

[Jonathan Schley]

Yeah, I, I mean, I agree with that and I think it's okay to have some differentiation, right? I kind of always make the joke. It's like, you know, about the, like what the timeline and life cycle of, of a brand is where like, you know, like I'll use Abercrombie as an example, right? Like Abercrombie came here and it was so successful. And then as it fell off, it was like you'd see random, you know, German and Dutch guy tourists wearing like, you know, long cargo shorts, mid calf and it would be like very weird. And 10 years later you'd be like, why is this Dutch tourist look like an American from like 10 years ago? Right. And then after that it gets to Eastern Europe and then after that it gets to whatever. Right? So I think as you see all these like, as you have all of these different geographies that evolve in terms of where they sit in, you know, the cultural cycle, these life cycles, Extend beyond our purview in like a very significant way that I think we obviously are just more focused on, you know, the US and Europe and things like that.

[Lauren Sherman]

Yeah, well, I mean the, the extent to guys in really, really tight skinny pants is a great example of that for sure.

[Jonathan Schley]

Yeah.

[Lauren Sherman]

Because it's. That cycle is actually starting again. In Prada, the last menswear show they did, they did these like very, very ankle skinny, tight like borderline offensive jeans or pants that. But also felt subversive because men's pants in fashion have gotten bigger. So it's like there are still people wearing tight, low rise skinny jeans from when Raf Simmons first introduced that idea 25 years ago. The trickle down is still exists with like regular guys across the world.

[Jonathan Schley]

Oh sure.

[Lauren Sherman]

And now it's like the trend, the Runway is matching what the last cycle of the trend is still what's still happening on the street. Which is a fascinating. It's like a full circle moment essentially.

[Jonathan Schley]

I mean I was a hardcore 06 Dior 17 millimeter boy, so I get it. But you won't, you won't catch me in that moving forward. I'm sure.

[Lauren Sherman]

I bet you would.

[Jonathan Schley]

I've been counted out, dismissed, passed over, told I'd never be a golfer with just one arm. But the only thing that feels better than proving people wrong is out driving them. I'm 14 year old golfer Tommy Morrissey and I want to be remembered for.

[Lauren Sherman]

My ability as a champion partner of the Masters. Bank of America supports everyone determined to find out what's possible in golf and in life. What would you like the power to do? Bank of America. Bank of America NA member FDIC. Copyright 2025 bank of America Corporation.

[Jonathan Schley]

All rights reserved.

[Lauren Sherman]

You know how you always want to know about everyone else's money on the podcast, what we spend, guests will for one week tell us everything they spend their money on.

[Jonathan Schley]

My son slammed $6 with the blueberries in five minutes.

[Lauren Sherman]

And everything that makes them feel. I want to own a house, I want to have a child. But this morning I really wanted a coffee because at the end of the day, money is always about more than your balance. Listen to and follow what We Spend An Odyssey Original podcast available now wherever you get your podcasts. Okay, moving on. Let's get over. Let's get this tariff stuff over with. Okay, so we know what happened. We. I think we. I, I don't, I don't know if you and I discussed this directly, but I, I assume, I don't think we did. I assume you also assumed that the tariffs would not be implemented across, like a blanket implementation as, as promised on April 2. And in the end there, there is a delay and most of these tariffs probably won't be put in place. There will be deals made and et cetera, et cetera.

[Jonathan Schley]

He already said, I mean, he already said yesterday about electronics and phones and computers, which is 30%, roughly 30% of the total Chinese export to the U.S. right. So it's obviously there's a heavy degree of showmanship.

[Lauren Sherman]

Yeah. So even in China, which he was going to keep the tariffs there, and we're talking about Trump, the President of the United States. And my husband kept saying, because he follows Apple very closely, he was like, they got an exemption last time, they will this time. And I kind of was like, maybe they won't because this is the one hill he's going to die on. But the reality is the minute the bond market started to get screwed up, he couldn't keep going on this tariff rampage. So generally, what's your opinion about all this and where do you think it'll shake out in like six months?

[Jonathan Schley]

So, you know, I had some big deals in, in, out for signature, you know, in the last two weeks, you know, that sort of paused and sort of paused and sort of paused. And then, you know, come last Thursday and you know, you have the announcement at the end of the week or Friday or whatever it was, and you know, I was pretty convinced at that point that those deals just wouldn't go forward or at the very least be paused. And come Monday morning, you know, signatures are in my inbox and everything's moving forward. Now, I'd be lying to say there's obviously not concern, there's huge concern. But I also think that most of you know, the ser. Look, it depends on the brand, right? But let's say you're a very serious luxury brand who you're talking 10 year timelines on things, right. You know, real estate deals are long term deals. You can't, no one's making, you know, long term plans on short term information. Right. You just can't do it. So I haven't personally had anyone transactionally back out of a deal. I think there's, you know, it's mostly like, you know, keep calm and carry on or let's just pause and see, but nothing fully stopping. Right. And I think that like everything, you know, not to get political, but like Trump has demonstrated on various subjects, right. That he likes to start fires so that he could be the hero to put them out. Right. You know, like the US and you know, like the conversations about investing in the US and onshoring, it's like, you know, you had all these people like Apple and whomever else announcing we're investing X billions of dollars. But these were, these were plans that were already in place, right. They've just now been PR'd to publicly reflect the demands of the administration. Right. So I think, you know, I, I'm someone who believes the private sector is always smarter than the public sector. Right. So I think I just, I just don't see it as a real long term issue. Right. The other thing that I think everybody's ignoring or not really talking about, but to your point, about like once the bond market crashed, it was over. He effectively told the international community, all you have to do is dump US Treasuries and now you get a deal. Right? And that's not a great place to be because obviously the most important thing for the United States to maintain its position is to be a reserve currency. Right? So this, we need people to, even if it's at a discount, meaning a trade deficit, transact as much as possible at the highest dollar volume possible in US dollars. Right. So that's just like the part of the conversation that hasn't really been had. So I think eventually he has smart people around him like, you know, like Lutvick, like Besson, like, you know, actual financial guys who I'm hoping they let him play his game for PR and then, you know, it very quickly gets rolled back. And that's, that's just his method. Right. You know, I mean, it's funny, there was all this talk about the Bill Maher dinner with Trump, right? And you know, Bill Mar spoke about it on his show this past weekend and he was like, I hate to tell you guys, there's not a crazy person living in the W White House. There's someone living in the White House who plays a crazy person on tv. But my experience was that he's not crazy. So I think he knows what he's doing. And I think I shouldn't say I think he knows what I. He's doing. He is doing something intentionally is is the better way of phrasing it. And you know, I'm, I'm sure to some degree he just takes, you know, they just take pleasure from whatever. It's tough.

[Lauren Sherman]

But yeah, look, here's what I would say. I agree, probably not crazy, maybe not that smart. And I agree with that. The issue is very impulsive. So like, this is the thing that when I.

[Jonathan Schley]

That's a Zimo.

[Lauren Sherman]

Yeah, exactly. And when talking to luxury executives, what I think they, and I think a lot of people, a lot of executives Ms. Sort of misjudged going back into this. It's sort of like when you've, you've had a traumatic experience and you don't remember it or you know, giving child birth, no one remembers how terrible it is, that type of thing. Like, when coming into this, all these billionaires were like, we gotta play the game with him because it's gonna make him like us. I don't think, I don't think you can do anything to make that guy bend to your will. I think it's, it's all about, he's playing a game and he'll go as far as he can. The question is. Yeah, the question is like, to what end and what kind of destruction? And the tariffs thing, like, people kept asking us, can you do a tariffs guide? I was like, no, this is not gonna actually happen. Quit. And we did write about it a little bit. And Sarah Shapiro on my team, who writes retail stuff for Line, she's following it because there are interesting, like points to be made, but the idea that you could prepare is just insane. Like there, there is no way to prep for this stuff. I think for me, the conclusion I came to, which was pre tariffs going to be this way anyway, is the next two quarters are going to be kind of shitty because the economy wasn't going to be good no matter what. It's a tough. Inflation is high, like mortgage rates are still really high. And at the end of 2025, we're going to see things start to move around or change and consumer behavior pick back up. I still believe that the one thing that I, that maybe this is a conspiracy theory, but I did hear this from several people, was this idea that Trump was like essentially trying to tank the economy so that the Fed would be forced to, to lower interest rates. Yeah. So that may feel like a little bit too much, but maybe that's what's going to happen.

[Jonathan Schley]

I think there's lots of conspiracies floating around, which I, I will always, in the interest of entertainment, entertain for myself. However, you know, I mean, there's also, I've also heard he wants to tank it. So there's a run on gold because Russia needs to rearm. Right. There's like a million of these things. Right. The one thing I'll say that's my bigger concern out of it is just that, you know, like Covid, like, you know, inflation in the name of COVID and whatever. All these companies have raised their prices so significantly over the last few years anyway. Right. And at the end of the day, luxury, you know, real luxury, Capital L luxury. If you're going to be on the waiting list for a watch for two years, right. You don't care if it's, if it was $50,000 when you put your name on the list or $60,000 when you receive it, you're still buying it. Right. Because there's that waiting period. Right. I also think my concern is that out of this people are going to very aggressively and quickly raise prices and then that's again going to be the next threshold long after tariffs have been reduced. And that's where I think it's problematic. You know, that that's, that's kind of it.

[Lauren Sherman]

It's. It's a concern. I would say that there is a lot of price resistance already in luxury. That they have to be careful because consumers, even these. You're absolutely right that if you're spending 50 grand on a watch, you don't care if it's 60 grand. And Hermes is obviously the best example of this because they're. And I talked about this on, on Peter Hamby's podcast, the Powers that Be last week, like Hermes bags could be way more expensive than they are. And they price them in a way that. And make fewer of them and still make a great profit so that you don't flood the market. And I think what happened was a lot of luxury brands. I was looking for a dress the other day. Cause we have like a bunch of events. So many dresses right now are four grand. And it's just like, I don't. Even if I had that kind of money, like it's just dumb. It's not, It's. It's getting to this point. So I think there needs to be like a mental adjustment of, okay, this is what stuff costs. On the other hand, maybe this is an opportunity for people, and especially people who don't buy $4,000 dresses, people who buy $400 dresses. Maybe this is an opportunity if the prices are raised across the board and at the lower end as well, to stop buying so much stuff and go back to this idea of you buy one or two things every quarter to refresh your wardrobe and that's it. Like there is an argument that none our clothes. And I've made this point millions of times, like a pair of jeans costs way less money when you adjust for inflation or even the pr. The num. The number. If you didn't adjust than they did in like 1950. Like, you can buy a pair of jeans for $20 now and you could buy a pair then for $20. That's not normal.

[Jonathan Schley]

No, I mean, I agree with you. The one thing I posted on Instagram when talking about this was like, you know, I think the only positive to come out of this is in the vein of exactly what you're saying is hopefully this leads people. Right. Because I think, you know, the media obviously never fails to like hyper react to every story. Right. So I think you had a lot of people who maybe don't have economic backgrounds or business backgrounds in any kind of way to be like, oh, he put 125 tariffs on China. All my stuff from China is going to go up 125%. Right. That's obviously not how that works. We know that's not how that works. However, what I said I hope this actually does is maybe, and I'm probably kidding myself, but maybe consumers or a larger swath of consumers will become more aware of what they're actually buying and what the actual cost of the things they're buying is to realize how ridiculous this is to achieve the end you're talking about. Right?

[Lauren Sherman]

Yeah. So it's very highly unlikely. We have an economy based on consumption. But it is an interesting point. Instacart is on a mission to have you not leave the couch this basketball season because between the pregame rituals and the post game interviews, it can be difficult to find time for everything else. So let Instacart take care of your game day snacks or weekly restocks and get delivery in as fast as 30 minutes because we hear it's bad luck to be hungry on game day. So download the Instacart app today and enjoy. $0 delivery fees on your first three orders. Service fees apply for three orders in 14 days. Excludes restaurants. I've never felt like this before. It's like you just get me. I feel like my true self with you. Does that sound crazy? And it doesn't hurt that you're gorgeous. Okay, that's it. I'm taking you home with me. I mean, you can't find shoes this good just anywhere. Find a shoe for every you from brands you love like Birkenstock, Nike, Adidas and more at your dsw store or dsw.com Talking about consumption for the last 10 years or so in beauty. Yeah, the model has sort of been based on this brand, Glossier. Where the way when Glossier launched, Emily Weiss, who's the founder, launched in 20142015 was this drops model where you drop one product, the consumer buys it, they post it on Instagram. A week later, a new product drops, they buy it, they post it on Instagram. This cycle, Glossier became this brand that all the fashion brands I talked to were obsessed with. Like, they were looking at Glossier's marketing, the way they reached the customer through content, through comments on posts, things like that, community feedback. And it became sort of the model of how to build a modern brand. And In, I think, 2021, they raised a Series E at a $1.8 billion valuation. And last week in Line Sheet, Rachel Shugatz did a piece about. Wrote a piece about how they are raising another $100 million. They said in her reporting, she talked to people close to the company who said they don't actually need to raise the money, blah, blah, blah, but, like, the money is being raised at a valuation of half or less than half of what it was, less than a billion dollars of what it was four years ago. So as someone who is looking at different brands constantly, you, you know, what goes in and out of retail stores, storefronts. What do you think about, like, the Glossier trajectory and what do you think is going to happen to it? Do you think that they're going to be able to, like, sustain, sustain and become, you know, their generation's Estee Lauder? Or do you think 10 years from now, Glossier won't exist?

[Jonathan Schley]

There's so much to unpack with Glossier. And I think you. I don't know if you know this, but I did the first Glossier LA store and the second one in collaboration with a colleague of mine, and then the Chicago, the first Chicago store as well. So, I mean, I have some experience with it. You know, we have a mutual friend who was running it at the time, so I worked with her on that. Look, I think you use the right word in saying trajectory, right? Which I just think it's one of these things where, you know, they were. So my sense of it, right, which is not a reflection of necessarily the work I did with them, but my sense of it is just that, you know, they were so intentional about the nature in which they wanted to grow early on and who that customer was, which was a positive thing, right. And then I think they sort of had two things, you know, my market read on it is two things really affected them negatively, right. The first is that, you know, as DTC became, you know, it's funny, there was this moment, obviously, you remember, like, all the retail apocalypse conversations of a few years ago. And there was this moment where DTC stopped being referenced as a distribution model and rather started being referenced as a segment of brands in the conversation. Right. In my work with Glossier, I think they recognized that really early on and didn't want to fall into that conversation as being adjacent to the Warby Parkers, the Everlanes of the world, the, you know, Allbirds of the world, etc. They realized that was a liability and tried to avoid that. That being said, the commercial enterprises that support that type of business, meaning like real estate people, etc. Ultimately always recognize them as a DTC brand. Right. I think that was sort of the challenge that was, that was challenge. One challenge to from my world is, you know, just my view on it is like Covid, right? They had just spent a lot of money on, on big stores like LA and things like that. And Covid happened and the customer who was like a very specific customer, right, like call it 16 to 25 or something like that, right. Then they grew up and all of those and Covid was over and they probably went to, you know, whatever the next rung of beauty you go to is after, after that. And then I think they sort of fell into a boat where it was like they didn't really have that hyper defined customer anymore. And there was so much perception around it that it just sort of felt fell off a bit. Right. And then I think that's kind of when Emily stepped down and there was some cleaning house and things like that. But it's sort of, at least in my world, fallen out of the conversation a bit and obviously has gotten, you know, press that I wouldn't say is necessarily helpful to them. Right. You know, one of the things I always find really funny in my world, which isn't unique to Glossier, I mean, I can name countless brands where this is the case. It's like I might be really excited about them. Real estate people might be really excited about them, investors might be really excited about them, customers might be really excited about them, but the press hates them, right? Or at least, at the very least is extremely critical of them. So I always find that interesting when it's like, why is the fashion press or the luxury press critical of this brand when both the customer who ultimately matters and all the commercial enterprises behind it fundamentally think very highly of the brand. Right. It's a bit like often what do you guys know that we don't know, which I'm sure is a lot sometimes, but you know that I think there's A bit of that same sort of phenomenon in Glossier.

[Lauren Sherman]

Yeah. So it's interesting. I see it as. As being part of the press. Like, I think what the press does wrong is they really pump brands up and then the minute there's a change or there's a bump, they are really down on them. And I don't know if Glossier has experienced that as much as some other brands, because they're. I would say Rachel is really the only. Rachel Struts is really the only one who knows anything about their business, who's covering it. So. Yeah, but she knows a lot. And the thing I would say is last year they had a lot of wins that she reported on with the launch of her fragrance. And. But I kept saying to her, there's something not right about what's happening here. There's just something not right about it. And you could just tell that. Like the other. For me, when I look at what happened with them, it comes down to. She had offers to. I don't know how, like, I don't know if there was a term sheet, but there were people who wanted to buy it and she should have sold it in 2018 when it was valued at like a billion dollars. And it. They should have sold it. Like, there's the. And you can't go back. And this happens all the time in.

[Jonathan Schley]

The media environment we're in. Sadly, branding is a momentum game when it's something like that, Right. Like, it's, you know, there's lots of brands even I work with or I've been friends with for a long time, you know, that they finally get investment, you know, 10 years later from a group, and I'm a bit like, well, you, you know, let's. Let's go work together. But also, like, I feel like you kind of missed the boat and now you gotta, like, repr this whole thing and actually sort of like reintroduce some sort of a zeitgeist of some kind. Right. Like, so gl. I mean, glossier is definitely, at least from my perception, lost the zeitgeist element.

[Lauren Sherman]

Totally.

[Jonathan Schley]

Right. And I just don't, you know, it's sort of, you know, and also the, you know, the sad thing is, you know, in my world, right, and this happened with a few brands during COVID you know, especially ones that overreacted to closing stores.

[Lauren Sherman]

Yeah.

[Jonathan Schley]

Once you. Once you close stores in the commerce. In my commercial world, you know, and I mean, I don't mean, like, you close one underperforming door. I mean, like, you significantly reduce Your portfolio of stores. Once you do that, like you become no longer viable in the conversation. Right. Like the, the, the places that will give you scale where you're going to go to a mall landlord and do 10 deals at once. They don't want to talk to you anymore. Right. Probably because you closed one of their doors already and there's a, you know, a concern there. But also because you've now communicated to the market that you're not doing well, which is a tough place for a brand to be in. Right. Because it's a lot. I don't think that effect is really considered in the short term. You know, cleaning house and you know, financial solution oriented, you know, acts. But it's, you know, it puts them in a tough position. So.

[Lauren Sherman]

Yeah, yeah, I think, I think they just lost the plot and we'll see. I still think the base of the brand is, was brilliant and there is an opportunity there. But unfortunately it just, there was a, there were many things that sort of went wrong from the product itself not really living up to replenishment hype. Like you need to be a brand that the product is good enough that people buy it again and again. I think they struggled with that at one point. I think the marketing got off track at one point. And then also the, they invested in tech. They did. It just was like everything that you're talking about and I do think I was talking to Peter Hamby about this last week. He had texted me from north park over Christmas and his wife said to him, tell Lauren that like there's no line at the glossier store. And that's something like from your perspective. Look, a lot of these lines are manufactured, but that glossier line was not manufactured.

[Jonathan Schley]

No.

[Lauren Sherman]

And so there's no more line. That means something.

[Jonathan Schley]

The last point I'll make on that is I just think, you know, to wrap it up is I'm also, you know, and there was a moment for this and I've, you know, I think there's, I'm going to be careful how I say this. Not because it's about a particular person, but because I realize it's very specific on segment and type of brand. But in, in a lot of cases I'm very skeptical of, you know, brands where the founder is very front facing. Right. And you know, anecdotally the story I'll give, you know, because I think that's hard to give up. Right. That's very difficult to give up. And by the time you're smart enough to give it up, it's probably A little bit, I won't say too late, but you know, you've gone past it, you know, a good example. And I won't say which brands, but you know, who I work with. You know, there was one beauty brand I was working with, you know, while it was independent, that I shouldn't say beauty also fragrance. Fragrance brand that, you know, was like very much that the brand of the, you know, that mid-2000s New York fashion set. And then there was another one I was working with, it was sort of a competitor, but a little more low key, etc. And the competitor brand says to me, he says, you know, when that person dies, that brand won't exist anymore and my brand will live forever. Right. And it was sort of a funny comment because I was like, all right, guy, like you're just jealous. You know, other founder, relaxed. But now that some of these brands have traded hands, you know, 10 years later. He's right. Right. He's right. That in the, you know, in the investor world of that founder led brand, it's not, it just doesn't have the impact.

[Lauren Sherman]

So yeah, and this is something we're going to look at Skims for the next two years of, of what? And I, I personally believe that skims can exist without Kim Kardashian.

[Jonathan Schley]

I think they've done a very good job at not actually making it. Like yes, everybody knows it's her, but I actually think skims has done a really good job at not leaning too heavily on, on her impact.

[Lauren Sherman]

I agree. In spite of her, it succeeded in correct. Because if you look, they really haven't had any other big business success.

[Jonathan Schley]

I agree with you.

[Lauren Sherman]

Good American. Okay. But not, not the best. So like I think they've, that's an interesting case study of it. But yes, you're right. Like I think this is a, this comes back to founder syndrome. Like can you get out of your own way or not? And you can't blame Emily Weiss for all of this. Like she, you also have to give her a lot of credit. But the reality is like something someone lost the plot somewhere and it's just here's hoping they can sort of reposition it and, and get back on track because it is just such a great brand. And, and it's not like the hard thing about building a business in this era is that you are tracked every single day on TikTok by consumers. So it's not, it's the journalist. Yes. But it's also the consumer is like I, this happened at, at the Glossier store. This product. I'm going to review this and you.

[Jonathan Schley]

Have to be brand first. You have to be brand first. I've, I've had, I, I, you know, I was having breakfast with the founder of this, you know, young brand recently. Not beauty, but you know, it was with her and her mother, who's her business manager, who has a, you know, really strong background in that world. And you know, that we're saying like, look, your, your customer probably, you know, your PR agency wants you to do a lot of like customer facing kind of things. And I, you know, I said to her, I was like, I, you know, you're 27 years old. Don't do this. You know, just, just don't exist. Like, don't, don't exist, be a ghost. Like, we're past that being the effective thing. And it will be so much more powerful for your brand long term to just cease, cease to publicly exist. You know, it's a balance. But my advice is like, you know, I think you're shifting that if you are going to do this. You know, it's less about, you know, founder influencer and more about like actual legitimate thought leadership. Like go do a, go do, go do a talk at hbs. Don't like, you know, be in some tech forum kind of thing. So.

[Lauren Sherman]

Great advice. Jonathan, thanks for joining me. This was so fun.

[Jonathan Schley]

My pleasure. Thanks for having me.

[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.