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Lauren Sherman
What's up?
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Sarah Shapiro
I just bought and financed a car through Carvana in minutes.
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Lauren Sherman
You, the person who agonized four weeks over whether to paint your walls eggshell or off white, bought and financed a car in minutes.
- [01:12]
Sarah Shapiro
They made it easy, transparent terms, customizable, down and monthly.
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Lauren Sherman
Didn't even have to do any paperwork. Wow.
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Unknown
Mm.
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Sarah Shapiro
Hey, have you checked out that spreadsheet I sent you for our dinner? Options Finance your car with Carvana and.
- [01:25]
Lauren Sherman
Experience total control financing subject to credit approval. Foreign 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 our new correspondent, Sarah Shapiro. We're talking holiday shopping, Bernard Arnault in court, the Saxon Neiman Marcus marriage, and so much more. What's up friends? It's Tuesday. How was your Black Friday? How was your Cyber Monday? How was your Thanksgiving? I feel like I've been off for weeks. It's only been four days. I had a very productive weekend of not working. I went to a bunch of stores and checked in to see where people were shopping, where they weren't. Lots of activity again at Abercrombie and Fitch. This time I went to the outdoor Abercrombie and Fitch on Colorado in Pasadena, which is like a stretch of Pasadena that's like a Main Street, a big mall. J. Crew was also very busy store that was not that busy. But Seems busy online because so much stuff is sold out is vori. I don't get it. I don't. I don't get it. I got to say it. I don't know who's buying it. If you're buying it, call me. I need to understand why you want it and you want to look like this. It's not. It's not a good situation there. And there weren't that many people in the store that, again, went online. Tons of people. So maybe it's just the way that they operate, but I think that from a product perspective, they can do better. There was this one jacket in particular that was really upsetting to me that is like this very. It's like a shirt jacket that was cut to the knee, essentially, for women in this, like, terrible plaid that should have been cut to the hip was like a shirt jacket, but they just inexplicably cut it to the knee. It just. It was. It really upset me. Anyway, it was fun. I watched a lot of television, and agency is, you know, if you watched the Bureau de Legion, you will enjoy it. And I also went to see Cinderella with my kid, which was. Was super fun. And he, you know, he has a very, very good attention span because he doesn't watch a lot of tv. So he was able to sit through the whole thing and seem to mildly enjoy it. Even the part where they say sewing is women's work. There is a lot going on in line sheet this week. We have this big announcement that Sarah Shapiro, who is our guest today, is joining the business and we are going to expand to five days a week in January, which is so exciting. And I'm so happy to have Sarah. She's awesome and you're gonna hear from her all the time and learn a lot from her. I love her substack retail diary, which Puck has acquired. So it's very, very exciting. And more on that a little bit later. And then I am doing my usual digging. So we've got some LVMH stuff along with some intel from Bernard Arnault's courtroom appearance on Thanksgiving. I also have an update on the Hearst layoffs and kind of what's happening there and a couple other good things later in the week, I'm going to be looking into some stuff that's happening at J. Crew and Gap, and I will also have some editor news from Europe that. That will be running later this week. So high, low, mix, Europe, us, the usual. Hit me up if you have any requests. Unfortunately, Taylor Swift wasn't out and about this weekend. So I have no feedback on that. I will say I really enjoyed the Gwyneth Paltrow Apple, Martin Blythe Danner content from the big debutante ball in Paris. And I would love your feedback on her on their looks. I think Gwyneth stole the show as usual. Although Blake, Gwen is extremely chic. Let's get started with Sarah. Sarah Shapiro, welcome to Fashion People.
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Sarah Shapiro
Thank you. Excited to be here. I feel like I should say the ultimate, like, longtime listener, first time caller. Deal.
- [05:58]
Lauren Sherman
Amazing. Well, we should also say welcome to Puck. You start next week, officially December 9th. But we are so happy to have you.
- [06:06]
Sarah Shapiro
Thank you. I'm really excited.
- [06:09]
Lauren Sherman
So before we get started on the news of, of the week, I wanted to talk a bit about you and what you're going to be doing at Puck and what you've been doing for the last, I don't know, 20 years and how you ended up buying journalism books like as you. As you embark on this new journey. But so, just to start off, Sarah is joining Puck and Line Sheet specifically as a correspondent. She's going to be covering a bunch of different stuff. And as in the same way Rachel Sturgatz covers beauty for us, Sarah is going to be covering the areas of fashion business that are her expertise. So that's a lot of different things, like the business of shopping, retail, direct to consumer, e commerce, all these things and people and brands that we do cover online sheet right now. But we're gonna get to go deeper on now that Sarah's with us. So one of the great things about Puck is that a lot of the people who work at the company, a lot of the journalists were practitioners or they worked in the industry that they covered beforehand. I never worked in the fashion industry. I feel like I did because I've been covering it for so long. But you were, you actually did. You were a buyer for really. And a merchandiser planner for a really long time. So tell us a little bit about your experience. And then you launched this substack called Retail Diary that Puck has since acquired. And. But, but start with your. Your previous life.
- [07:46]
Sarah Shapiro
Sure. My previous life. Although these all just feel like different chapters. I've always been obsessed with fashion and retail. I remember in second grade was probably when I started creating my own catalogs was the way that I did it. And then that became like fashion sketching. So I thought I wanted to be a fashion designer, and that was my only focus and the only thing I ever wanted to do. So I actually studied fashion, design and retail at Syracuse and they have an amazing program for retail. It has since changed schools or departments, but it was fantastic for getting real world experience, internships in New York, all of that. So straight from college I interned both summers with Macy's. So one summer with Macy's, one summer with Bloomingdale's. And that was a great entry point. Learning that the whole world of retail just wasn't even on my radar. So I didn't realize that that was a thing prior the career. And so I really loved the opportunity of doing right and left brain of understanding that retail, the math, it was like sixth grade math. It just really clicked for me. So I from college I went right into the industry and I went into the Bloomingdale's training program which was an amazing start to a retail career and getting such a great foundation. And So I spent 10 years at Bloomingdale's and really loved it. And I probably would have continued staying on there for a long time, but we moved out west and at that point I had the opportunity to work at Williams Sonoma. So from there, and that was when the industry was really going into omnichannel. So you were a buyer for a department store. You were a buyer for the stores only and not for the catalog or for the online. They had a different buyer for each area. But at Williams Sonoma I got the opportunity to do it for all different areas and really got my omnichannel experience. And since then I've just continued to lean into a lot more of site merchandising, online merchandising. And really the other part of this is I've just always really loved talking about retail and the industry. And so through one of my once I moved out to the west coast and through Williamson Home, I had really left a lot of the fashion world and missed that a ton. And then I worked at a CPG consumer packaged goods startup and got more into grocery items and getting into the personal care items and even further away from retail or fashion retail. Which is why I started Retail Diary. It was just a place to have a conversation about retail. And Substack as a platform really created a lot of discovery for my newsletter. So I'd been writing it for for about four years with a pretty small reader base. And it wasn't until Substack where I was able to really grow it through networking with other great writers and getting some visibility for these conversations.
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Lauren Sherman
Substack Revolution so I found you via Substack and a publicist who I really love and respect said, do you read Sarah Shapiro's retail diary. I think you'd really like it. And I had subscribed, I think on my personal email, but was only checking in occasionally. And then I started looking at it really closely. And the thing that I love about what you do is you're really good at organ. You're a great writer and clear writer, but you're also really good at organizing information. And I find that one of the things that I found being at PUC and writing Line Sheet is I have never tried to be comprehensive in what we cover because I think there are a million places that do that. And also it's boring. And most of the stuff that people cover is not worth covering. But what I thought you were really good at is finding the stuff worth covering, synthesizing that information, making it interesting, fun, and really encapsulating what is happening in the industry without like dragging people down or feeling like homework, which is like a huge pet peeve of mine. With a lot of fashion writing, especially like quote unquote, serious fashion writing in the past year or so, as you've like really ramped this up and it's become a bigger thing. What are some of the big stories that you have been following? Like, what are, what are some of the things that your readers in particular have been most interested in? Because this has been like a really crazy year in retail and fashion and, and everything with like the sort of blow up of the luxury industry, but in the return of a lot of these mall brands. And then also just like we're going to talk about online sales and Black Friday in a little bit, but like everything that's been happening online versus brick and mortar, et cetera.
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Sarah Shapiro
So there's a couple of different details of this, I think. One is the way that I've approached Retail Diary or the way that I've approached retail stories is just to make an analogy. Just like you might follow and read the sports section because you really want to know the business behind running the teams, the stats, what players are doing. Well, if you enjoy watching the games, you're enjoying those stories too. And I think of fashion and retail and beauty, retail, all of that very similarly. These are brands that we love. And I want, I think there's an opportunity just for consumers to understand more about the retail industry. There's been plenty of stories out there about excess inventory. What do luxury brands do with all that extra inventory? If luxury brands and all brands could get a better handle on inventory, it'd be better for their bottom line. So I really think there's this idea that if both consumers and the businesses understand more and talk about retail more, they can really. You can be a better consumer, you can be a smarter consumer. You can also enjoy it a little bit more being a part of it. And also I want to see the retail industry do well. Like, I'm obsessed with it. And so I approached Retail Diary as that. So I felt a lot like if there were interesting stories there, I would want to share them. Like, if it was a article, I read a lot of articles. I listen to a lot of podcasts. Like, I read all the magazines. Like, it was another reason for starting Retail Diaries. Like, I needed to make that time productive.
- [14:50]
Lauren Sherman
And so that brings us to Puck and how you. How you ended up here. So you and I met over the summer. We've been thinking at Puck, like, how do we make Line Sheet a five day a week thing without me collapsing? I think, I think I am. I'm fine. Like, I don't. I think because I write so much, writing a lot doesn't mean that you're. I do work very hard, but, like, that's not the hard part for me. It's not. Not a big deal. But like, if we were going to do five days a week, which it felt like there was a big opportunity to do that. Often my newsletters are so long. Like the one that ran on Monday, announcing you. Because I wrote so much at the top announcing, it's just. It's like way too long. But I just have a lot to say and there's a lot going on in the industry. And I've been doing this for so long that people are just like feeding me stuff constantly. That there's a lot of stuff that gets left on the table that I think is fun and interesting. And there's also just a lot that I don't even get to explore because I just don't have time. I'm dealing with every single day an update on the LVMHR lady getting fired situation. So we were thinking about different ways and I knew that I wanted to find someone who could really cover areas of the business that would be really convenient for me to cover since I live in Los Angeles on the west coast, but that I am not covering because I've been so enmeshed in the luxury industry for so long and in European businesses. And I was reading what you were doing and it just felt like it was very complimentary to what Rachel and I do at Line Sheet and that it would fit in there. You know, obviously it's not going to be exactly the same. And we're figuring that out. And it'll be very iterative. Like everything at Puck is. But it just felt like what you were doing would fit in with what we were doing and your skills. Like I, in another life would have been a merchant. Like, I feel that I have it. I have the instinct, but I'm not one. I definitely, like, I did do AP calculus, I somehow got through that. But like, I'm not. I'm not.
- [17:06]
Sarah Shapiro
I always tease, like, all you need is six or seventh grade math. Like I am. And I still use a calculator for everything. That's the thing. A merchant's right or left hand is always a calculator.
- [17:18]
Lauren Sherman
Yeah, well, whatever happened, it didn't happen for me. I'm not doing it. But so it just felt like. And we met over the summer when I was on quote unquote vacation in the Bay Area. We took a really long walk and I definitely was going to ask you if you'd be interested in potentially coming to Puck. But like, it just sort of like we talked for an hour and then at the end we both knew that that's what this was about. So why did you decide to do it? Because you could keep doing Retail Diary on your own forever. But what made you want to try, try this with us? I'm so glad you said yes, but you know, you didn't. I think I was very, very honest with, like, you don't have to do this. You could do what you're doing and it'll still be great. But what made you decide that like, moving to Puck was the right move for you?
- [18:11]
Sarah Shapiro
There's. I mean, there's a lot of personality things for me and like a personal decision. But like my. Up until March of this year, I was writing Retail Diary along with a full time corporate job. And my. When I started Retail Diary, it was never, let me start this and maybe a newsletter and consulting will be my career path. It was always, I want to keep talking about retail and move back into the fashion side of things from the consumer packaged goods space. And this was my way of networking and sharing everything that I knew about retail and the fashion side of retail. So that was all. Especially when making this decision. People would say to me if I was like, should I keep doing Retail Diary on my own? Should I join Puck? It was very much, well, why did you start it? Well, I started it to have more conversations about fashion and retail. And this I felt like was going to open up a lot more opportunities. The other is I was very clear. Like when we were walking, I knew the story of how you came to Puck. And I said to you, like, there's ever an opportunity to work with you. And you're like, well, I mean, there. Puck is so much of what I read and I read so much. But Puck is always like, the second that email hits my inbox, I'm reading what Lauren Sherman has to say. I'm reading Rachel Strugatz for beauty. Like, that was a huge thing for me. And so I just wanted to keep having this conversations. And then like you mentioned, the last 20 plus years of my career have been retail, merchandising, buying, figuring out the assortments. I'm also like, to me, like, Mickey Drexler is like everything. Like, that's the kind of merchant I am. That it's a lot of data and insights, but it's a lot of gut. And it's figuring things out, it's creating special moments for a customer. And I love that. But it wasn't my intention to just write about it on my own and do that thing. And then also, like running the business of a newsletter, there's parts of it that are fun, the branding is interesting and figuring out affiliate links like that was a whole new world to me and has actually been really fun. But running the newsletter every day, all I wanted to do was dive into the stories. As you said, there's not a shortage of stories to write about. That was my problem was I was writing a 20 minute read, which thank you to everybody who takes the time to read it, because it's a lot. So being able to also learn the skills of journalism, how to edit down, how to focus on what's really important, that's what I'm hoping to learn and to grow in this next phase.
- [21:01]
Lauren Sherman
Yeah, I think we both talked about this. I love working for entrepreneurs. I don't want to be one. And also, one of the things about Puck that's really special is we do have this magical team of editors who make everything. The first time they edited me, I was like, oh my God. First of all, like, I have no idea what they did because it just sounds like me. But also they made it way better.
- [21:29]
Sarah Shapiro
I mean, I've never had an editor and I need one. So, like, this will be great.
- [21:33]
Lauren Sherman
Everyone needs an editor. It's really awesome. The editor boys are great. I'm excited for you to get to know them and their magic. So really happy to have you. That was a 20 minute intro to Sarah Shapiro.
- [21:51]
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- [23:26]
Lauren Sherman
This is the Tuesday news day, so we are going to do like a quick fire round of new stuff because you mentioned the affiliate thing. Not only does Puck have affiliate and we're going to be doing some shopping content which I've already been dipping into, but you're also going to be covering that stuff because it's so fascinating.
- [23:47]
Sarah Shapiro
I know, I'm so excited. I mean, I think what's really interesting is to learn about the industry and know about it and then be able to shop it. It's like a twofer. It's great.
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Lauren Sherman
Okay, cool. So let's get started. First off, Black Friday Cyber Monday. What did you do this weekend? Did you go do any channel checks? Have you heard about the results? Like what is going on with people shopping in America online and in store right now?
- [24:19]
Sarah Shapiro
Yes. So I was not really. I enjoyed Thanksgiving kind of a bit more, I guess. You could say like in the country or like off the grid. So I wasn't really near any malls or any Black Friday shopping. But I was very tapped into what was going on online. And I should also mention I love the term channel checks. That's a newer one. I always use the term competitive shopping when looking at and I think it's because I was often in house and so you would go see what other people were looking like. So channel checks or competitive shopping. So what I saw online a lot was it seemed to be incredibly strong. But I don't think there were any. I mean the rushes and the crowds and the fighting for product like just doesn't really happen anymore. It's so funny how that's like vintage photography now is looking at that, that history. But I do think there's still this understanding of is this really the best deal? And also feeling like some retailers said site wide sale and then you'd get to the site and it was only limited products. So I think that was some of the consumer frustration. But overall it seemed to have done really well. Surpassed expectations from what I've seen. And the other thing that I think's worth noting, and I've mentioned this multiple times, is because it is a later Thanksgiving this year. Thanksgiving in the last, you know, the last couple of days of the month, it creates less days. So the last time there were this few days, I believe was six years ago. We're at 26 days this year. Last year there were 32 days. So I think Black Friday and what this week meant, it really needed to do two weeks worth of business. And it seems like it performed there.
- [26:17]
Lauren Sherman
Yeah. And so how did they. Was it mostly the fact like a lot of pre sales, it felt. This felt like the pre sales have been happening forever, but it felt like a lot of retailers that tend to not do pre sales did them this year was that the big strategy was like the week before just like starting to ramp up the sales. And then Friday having the mega sale, there were a lot of brands. I always look at which brands go on sale after Black Friday and which brands don't because there are a few brands that can negotiate not going on sale sale this year it felt like they were all on sale, 50% off after. On Black Friday.
- [27:00]
Sarah Shapiro
Yeah. I think the other part that happened, and I know you've touched on this and I've spoken about this a lot is with an election year, everybody is very cautious prior to the election, at least in the US and then also abroad. But after the election happens Regardless as to what the outcome is, everybody feels a little bit more confident that at least we're, we know the direction of what's moving forward. So I think what also happened is so many retailers saw this drop off in early November and the numbers were not performing that strong. And so they knew they had to pull all the stops out every opportunity that they could. And so maybe, and especially also with that late Thanksgiving, late Black Friday, shorter time period between Black Friday and Christmas is moving up deals and making it a whole week thing.
- [27:58]
Lauren Sherman
Yeah. What do you think? Like what, who seems to be the big winners in this? It sounded like most. You mentioned there aren't as many rushes. When I talked to Peter Hamby on the powers that be on Friday, I was like, yeah, that still happens. I guess maybe not as much, but it sounds like it was mostly online. Like the sales from what I saw data from MasterCard a couple other places, sales were virtually flat in stores. And I went to Nordstrom Rack on Friday not to buy anything because I would not wait. I don't like waiting in line but for to pick up something that I had ordered from just regular Nordstrom and they dropped there. Just giving myself reasons to to have to drive places. But it was pretty goot crazy in there. But not like completely insane. It just feels like, I mean in LA the parking lot situation is just so nuts. That's the stressful part. But it sounded like most of the ramp up was online and not in stores. And do you think that just has to do with accessibility and this idea of one thing that I think about is like because of Waze and Google Maps and all that. So you really know what the traffic's going to be. So I feel like it makes people hesitate if they see oh, a big red line going into the to the Americana at brand parking lot. It's probably not worth worth making the trek. What are you seeing from in terms of distribution of sales and like who was doing well and who wasn't?
- [29:44]
Sarah Shapiro
Yeah. And I think the parking lot situation, the other thing to mention and you did it perfectly with your Nordstrom Rack experience is buy online pickup and store. So I mean that's my favorite thing with Target is to drive up, not even get out my car, like open my trunk. They drop it in. I can tell them exactly which door to put it in and you can even order a Starbucks ahead. Like they make it a really great experience if you don't want to go into the store. But that takes up parking spaces to do that versus people who are going in the store to shop. So I think that that is worth noting. I think the other thing that I think was really interesting with this is looking at the movies from the weekend. Wicked and Moana were huge hits. So that was also driving a lot of people to the theaters, which, you know, if you think of the Grove or some of the other places where there's a mall with a movie theater nearby, there's certainly people who are able, if they're going to watch a movie, they might pop in to a store as well. So I think that probably also helped retail. And then the other thing. And I know it's really hard to think about this when we're. I don't know if we mentioned, but I'm in San Francisco, so West coast, very different. But the seasonality and the temperature is a major driver. I've worked in seasonal businesses before New York. It was. They experienced a bigger drop in the temperature than what it had been the few weeks prior. So it was one of the first kind of like cold hits. And that is driving people to realize, oh my gosh, I need my hat, I need my scarves, I need my jacket. Do I have a warm enough coat? And that's another thing, like being seasonally appropriate. It feels like it's, oh, it's the holidays now. So that also helps drive some of the sales.
- [31:36]
Lauren Sherman
Yeah, you always. Montclair at the end of the year, whether they have a good or bad quarter always has to do with whether global warming is rearing its head more absolutely prominently than usual. So in, in France last week, where they were not celebrating Thanksgiving, but they were all. They're always celebrating shopping and buying stuff. There was a big trial. There's this, this guy, this former head of the French spot, the like French Intelligence unit, who had been employed by LVMH or contracted, let's say not employed, contracted by LVMH for quite some time in the 2000 and tens is on trial right now. And because of that, LVMH's chairman and CEO, Bernard Arnault, was forced essentially to go and testify in front of a court on Thursday. He went with his son Antoine, who has like a bunch of different kind of jobs in the business he doesn't have. He's not a CEO of one of the companies, but he sort of has always helped out with communications and image of the. Of the bigger group. And then also right now his big thing is like negotiating like the F1 deal that they have or he negotiated the Olympics deal. And that's sort of how he's managing things. He's the second eldest, and he is, you know, by all accounts, very nice. All my interactions with him have been very pleasant. And then his head of pr, Jean Charles, and then his lawyer. And it was interesting because the trial, essentially, this guy who worked for Arnault for a long time, who was the company's lawyer, is the one who allegedly hired the spy to do a bunch of different. Allegedly do a bunch of different things, which is including, like, basically, spy on Hermes, check in on a bunch of different things. Again, this is all alleged. I have no idea. You know, but the funny thing was Arnaud claims that he didn't know any of that was going on, and that this guy, this lawyer who actually died in 2018, that passed away after a long illness that he was contracting, this. This former head of the French intelligence unit. So it was a really interesting conversation. And. And what I gleaned from it, and I covered this in Monday's line sheet, but what I gleaned from it is, is the way that LVMH kind of manages all of its brands, manage its communications with journalists, and generally separately. Like, they. They're all run as separate businesses. They're all encouraged to be competitive. So, like, Dior has a head of image who has a lot of power at Loewe. They. They have a CMO who really works closely with the designer, and it's. It's more collaborative. So, like, every brand is totally different how they manage this stuff. But I would say lvmh, on the broader perspective, they tend to just say, like, either they. They never explain. There's a saying in media. Never explain, never complain. They definitely complain, but they never explain. They'll say, that's not true or that's fake. They. A lot. A lot of times I'll message them and they'll say, fake news. Fake news. And I'm like, but what does that mean? Can you guys give me some context? Whereas, you know, some of their competitors will get on the phone with me and be a little more. Explain more, which, whatever. Like, it's their prerogative. They can do it the way they want. But it was interesting because I felt like the way he answered a lot of these questions, which were, quit asking me these stupid questions. He said at one point, or I didn't know. And, like, there was one thing where they had a transcript of his direct assistant, his chief of staff, talking to the spy and being like, Mr. Arnault, blah, blah, blah, Mr. Arnault, blah? Blah, blah. And he totally did not he's like, I didn't know she did that. I don't know anything about it. So it was really interesting. I'm just curious from your perspective, like, one of the things that I thought was fascinating about all of this was because I couldn't be there, I really took the approach of, like, what. How. How are they crafting the LVMH image? And then also how the media responded to the trial. And there were not many outlets that covered the trial, like Reuters did. BoF syndicated a Reuters story. But I'm curious, from your perspective, like, as someone who has been in the industry for a long time, like, how much are you looking at, like, Bernard Arnault's every move and how has that changed from your early days of being a buyer when he was very influential and obviously, like, Bloomingdale's was selling a lot of his brands and has a very productive Louis Vuitton store, and you were an accessories buyer. So I don't know. It's shop and shop, so you probably didn't have to deal with it. Yeah, but, like. Yeah, so.
- [37:10]
Sarah Shapiro
But.
- [37:11]
Lauren Sherman
But I'm just curious from your perspective, like, what did you think of all the hoopla last week?
- [37:16]
Sarah Shapiro
So I think the interesting thing there is usually Arnaud is able to craft his image and be in control of it, but assuming when you go in for a trial, the judge is in charge and you are no longer in control. So I think that was just interesting to see that dynamic and in that place. And you mentioned, like, a couple of the comments that are no head, and the other one that I think was really interesting was the idea saying, I believe it was that a hundred people lost their jobs in a factory. And then the comment was, Arnaud had back, like, well, I created hundreds of thousands of jobs.
- [38:01]
Lauren Sherman
Like, you're not looking at 90,000 jobs.
- [38:03]
Sarah Shapiro
Yes, yes. And I think the interesting idea there is, and we see this in a lot of places, it's the caring about the individual and, like, what happened to those 100 people, as opposed to, like, looking at the broader and the huge impact of the business? Because, yes, he has created a huge economy. Like, huge. But trying to think, like, how to say, you know, at what expense or who didn't get to benefit from that. And so I thought that was an interesting. But seeing, you know, the comments, I think there was also the comment about, like, you know, do you want to go have, like, tea and French fries? Like, because that was supposed to be a dig at, like, northern France, which. That. I just, like the dynamic of how do people actually interact? So seeing how Arnaud might, like, actually speak when he's not presenting a quarterly business report or, you know, showcasing his business, I thought that was, like, kind of interesting to get to see those dynamics.
- [39:12]
Lauren Sherman
Yeah, I actually mentioned a bunch of this stuff in my piece. And also that, like, the place where I think he's the most honest are in those calls with investors. Like he said, he always says something that is real in those calls, which is interesting. It's like, where he's most comfortable and least defensive because he can be. He's being honest because these people have, like, invested in him. The. The interesting thing there. There was some hoopla a couple weeks ago with. They are thinking about bottling cognac, the spirit in China to avoid certain Chinese tariffs. And the. Someone at one of the, like, one of the factory cognac factories that LVMH owns or uses freaked out. And, like, I don't know if they went on straight. They threatened to go on strike. The interesting thing about the way Arnaud operates, and I recommend for everyone to listen to the podcast Acquired, which does these, like, long, four hour. It deep dives into how companies become the way. It's so good. I'm listening to the IKEA one right now, but the. The LVMH one, I think. I think it's really good, especially the early days stuff. I'd say in the newer stuff, there was some things where I was like, damn, I wish they had, like, dug a little more. But it's excellent. And the thing that you have to understand about Arnaud is like, he basically took. He lived in America in the early 80s, mid-80s, and he sort of took the idea of, like, American capitalism and brought it to France. But he took the idea of private equity and he said, oh, I'm gonna build a company, like a private equity firm. But instead of getting rid of stuff, eventually, I'm just gonna keep it, which is the French part of this. So it's like the preservation. And so he's constantly balancing this American capitalistic, let's make as much money as we can way of being. And that's where he gets the, like, wolf and cashmere and all that. But then with this idea that he wants to preserve culture, which they truly believe that they are driving culture, and in some ways they are. I think that, you know, that's a. That's a whole other podcast about, like, has LMH's cultural influence peaked already? That. It's a huge question, but he believes that. So there is this Sense of, like, yes, I'm gonna have factories in France where we make some handbags or luggage or whatever and cognac. But also, I need to do the best thing for my business. And, like, the bottling, the cognac thing, I get it. Like, yeah, you don't wanna pay those tariffs if you don't have to. The tariffs. Think about all this stuff's gonna happen that's gonna happen. So it's interesting, you know, they have the way that if you're. If you're being interrogated in court in such a tricky way, like, of course, you have to defend your. Yourself. And I thought, you know, he did a. An entertaining job of doing that. But it is. Yeah, it's.
- [42:28]
Sarah Shapiro
It's.
- [42:28]
Lauren Sherman
As our. As our world becomes more global and. And business and culture is just everything everywhere all at once. It's interesting to see an executive who is so specific of a culture kind of grapple with being one of the richest men in the world, and suddenly everybody cares about every little thing that you do. I was talking to someone from there a couple weeks ago, and I was like, I'm person number one that's bugging you guys. Like, from now on, it's going to be everybody. So it's a fascinating story, and I do kind of wish I had gone. I was in Paris for Thanksgiving last year, and it was really fun, and I kind of regret it, but it was also fun going to Pasadena and doing channel checks.
- [43:18]
Sarah Shapiro
Yeah. I mean, the other idea with the business decisions, I mean, who wants to have to answer to everybody about a decision, especially one that was made, like, years ago? I'm sure Arnaud is like, let's move on. Like, yeah, I don't need to. There were reasons that this was made, and, you know, it'll all play out, but I can't imagine being in a situation where I'm asked about a business decision I made a few years ago.
- [43:45]
Lauren Sherman
Yeah. Or 10 years ago. But, you know, when you contract a spy, even if you didn't know when your number two contract a spy, that's.
- [43:56]
Sarah Shapiro
One thing I've never done in my background. So.
- [43:58]
Lauren Sherman
No. Anyway, I look forward to seeing how all this plays out.
- [44:06]
Unknown
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- [45:04]
Lauren Sherman
One other thing I wanted to talk to you about really briefly is there have been some updates on the Sachs Niemann merger acquisition that's happening. Sachs acquiring the Neiman Marcus group. So couple of weeks ago or last week, I don't remember, someone reached out to me and was like, do you know what's going on with this? What happened? And then another person reached out, was like, I heard that if the Amazon thing doesn't happen, they're not going to be able to close the deal. I haven't seen that physical contract. So I don't know if the Amazon thing has to happen, like Amazon, the way Amazon committed to it or whatever. If Amazon doesn't put money in, they're not going to be able to close it. What's going on? So I did a little report, a very minor, minor bit of reporting, and found that like they had done a junk bond that was worth something like two, I want to say two billion. At the same time, I was hearing from people in the real estate world saying that, like they were trying to refinance the debt on the Saks Fifth Avenue building and it had been appraised at like 3.6 billion over the summer in 2024. And. But that a lot of people in the real estate world are saying, oh, that was way too high. It's really worth only worth two. So they're not going to be able to refinance that debt anyway and make some money. So I was just hearing all this stuff. Turns out that they sold some junk bond. It sounds like it was for over $2 billion. Then Richard Baker, I did a little thing on Monday, then that Wednesday, or I think they only ran it this week actually. But Richard Baker talked to one of the WWD reporters and was like, I have all the money. It's going to close in like three weeks. So look, I think this is a situation where Richard Baker is going to do whatever he has to do to close this deal. And it sounds like the Sacks thing is fine. I talked to some people connected to these worlds and they were like, look, I mean, the Amazon thing that Amazon is in, they signed. Who knows, maybe that's wishful thinking and they could back out. But it sounds like they're in.
- [47:18]
Sarah Shapiro
And part of the agreement is for Amazon to manage the back end. And I'm sure they want that business.
- [47:23]
Lauren Sherman
Yeah, yeah. So it's interesting. It just feels like it's definitely going to happen. If it doesn't happen, I don't know how Richard Baker will handle it. So let's pray for Richard that this happens. The question for you, I think, and we'll be talking about this a lot more as the story develops and once it does happen, like to see how it all shakes out and see Mark Bettrick is obviously going to run the whole thing. He's Richard Baker's kind of operator, number one. I wouldn't call him a number two. He's a number one. He's going to run this business. And, but, but the question for you is like, as someone who worked at one of their competitors for a long time, like, what do you think about these two businesses being owned by the same company? There's been talk of this for at least 15 years and it's finally happening. So I'm sure when you were at Bloomingdale's, people talked about this a lot too. Like, do you think that this is going to be good for brands? Do you think it's bad for brands? Do you think it's good for retail? Do you think it's bad for the consumer? Like, what do you think about it overall?
- [48:35]
Sarah Shapiro
Yeah. And there's short and long term gain. So in some ways you can say, oh, for brands that have an account at Saks and an account at Neiman's, will, you know, some of their business go away? Because now there's just one entity potentially purchasing it. If they merge all of that. Yeah. But maybe they're buying it smarter and so they're having less returns and able to manage it that way. So there, there can be short term challenges that in the long term end up working out. I think in some places, like Kenneth Sachs and A Neiman's exist in New York City, like on Fifth Avenue? I think so. Or they have Bergdorf there. Like, yes, having Bergdorf and having sacks down the block like that has felt fine. But in some balls where you have a Neiman's as an anchor and then a Sax is an anchor like that, that probably won't work. And so, sure, you can differentiate it Just like my Teresa and Net A Porter, they're saying they're going to keep them differentiated and separate buying teams and separate content. So that's a lot of work. I don't think that's what they're looking to do in this situation. But at the same time, like, does a customer need a Saxon and Neiman's? When you can find everything online and you see the Google Ads across the top and it's the same product, same price point, like, do you really need the two different ones? So I think they can definitely. I think it can be good for the consumer to have some consolidation and cleanup. And for the brands, it's all about managing it and figuring it out like those brands. Also, this has been a big thing that I like to talk about is having the right mix of your business having don't have everything wholesale and don't have everything direct to consumer through your own channels. Like, you need to have that balance to play the two together. So if you do have a pullback on your wholesale accounts because now instead of getting a huge order from Saks and a huge order from Neiman suggesting some. Well, then you have a way to communicate with your customers directly and sell through some other channels.
- [50:49]
Lauren Sherman
Yeah, I mean, I would say they have been very adamant. Everyone I've talked to who is connected to this thing that like, they're not going to close any stores because I think they need to say that to make sure the FTC doesn't.
- [51:06]
Sarah Shapiro
Yes. You know, and lease agreements.
- [51:09]
Lauren Sherman
And lease agreements, yeah, of course. But the thing is, Richard Baker's a real estate guy. He'll like, figure it out. He'll sell them or he'll, you know, like. But yeah, I think you're totally right. It's just not. There are places in this, in this country that Nieman is more of, is. Has resonates more. And there are places in this country that Sachs resonates more. It tends to be in the south because Neiman started in Dallas.
- [51:37]
Sarah Shapiro
Dallas, yeah.
- [51:38]
Lauren Sherman
You're not gonna suddenly. And Dallas could probably keep whatever they have. Like that's a, you know, a place where people still spend money, they pay full price for shit. But like, you're right. Like, I always think of Ball harbor and that's also a very productive mall. So maybe that's a bad example. But like Ball harbor in Miami, the way that there's a Nieman and a Sachs at each corner and you're kind of like, I remember I went there once. I kn. I knew. And there's a Webster which is a smaller department, like multi brand retailer. And I just remember thinking, I don't think why do you need these two stores like then this is ten years ago. So. So yeah, I think you're. You're right, Sarah. We should go because we are. We have been talking forever, but it was. So congratulations on your move to Puck. We're so happy to have you and I'm excited to have you back on here in like a few weeks.
- [52:33]
Sarah Shapiro
Yeah, I'm so excited. I mean we've got. I mean this is like super bowl time period for shopping and consumers, so there's a lot going on. Plus the Sachs Neiman's like everything. It's an exciting time.
- [52:45]
Lauren Sherman
It's going to be so fun. Thank you again and we'll talk really soon.
- [52:49]
Sarah Shapiro
Okay, Sounds good.
- [52:51]
Lauren Sherman
Fashion People is a presentation of Odyssey in partnership with Puck, hosted by Lauren Sherman. That's me. Our executive producers are John Kelly, co founder of Puck, Ben Landy, executive editor of Puck, Gabby Grossman, director of Editorial operations at Puck and Bob Tabador, executive producer at Odyssey. Edited, mixed and mastered by Molly Nugent. Special thanks to the team at Odyssey, including J.D. crowley, Jenna Weiss Berman, Maddy Sprung, Kaiser Josephina Francis Francis, Hilary Schuppf and Kurt Courtney.
- [53:26]
Unknown
At an enterprise level, nothing is more important than communication. Grammarly for Enterprise enables your company to work smarter and faster. Other AI tools can't quantify business impact, but Grammarly gives you actionable insights and measurable results with features like their effective Communication Score, which tracks key metrics so you can make data driven decisions to improve outcomes. Visit Grammarly.com enterprise that's Grammarly.com enterprise.