Let's talk a little bit about the
expectations because we've seen this,
right? That people are concerned about
prices continuing to go higher here.
Even though the rate of inflation has
cooled down, the absolute levels are
still high. How is that shaping up from
your perspective?
>> Yeah. What I think what we're seeing
this holiday season is certainly I think
for parents there is a little bit more
uncertainty about the economy but at the
same time their kids are going back to
school and you know I think that is a
unique thing about all of our brands
from Aeropostal to JC Penney to Lucky
Brand is that we can make both the
parents happy because they're going to
find an incredible value when they come
into our stores but we can also make
kids happy because the other thing that
we know for sure is happening is the
kids are going back to school and they
want to go back to school and their
parents want them to go back to school
with the confidence of having the latest
style and the latest fashion. So,
they're going to come into Aeropostal,
they're going to find the newest trends,
which is wide um widelegg, baggy,
relaxed denim, but they're going to find
that it is buy one get one free, which
is an incredible value when you walk out
the door. So, that both the parent and
the kids are going to be happy.
>> I wonder what the effect of tariffs are
going to be, Mark. I look at those
brands. Um, some of them, you know, I
grew up with Brooks Brothers was my
first suit. Uh, but I imagine a lot of
them are making uh getting the textiles
and selling them, cutting and selling
them in foreign countries. So, how does
um how do these higher tariffs affect
your margins and then the price that
consumers pay?
>> Right. I think that's been actually one
of the advantages and one of the
strength is we've come together as
Catalyst brand. So, as you know, um,
Catalyst was formed with this
combination back in January. And as we
looked at, um, how we come to life for
the consumer, we come to life, whether
it's Brooks Brothers or Ara, Lucky or J.
C. Penney, in a very unique way for the
customer. So, that denim's going to look
unique. That suit's going to look
unique. At the same time, what we're
focused on is how do we take the power
of Catalyst behind the scenes for
everything that the consumer doesn't see
and put that together so that we can
bring consumers the best possible price
and the best possible value. And that's
where really our sourcing teams are
working to put together all the denim
that we buy across the portfolio, all of
the fleece that we buy across the
portfolio so that we make sure when
we're coming to life for the consumer,
we're bringing them the best value
because especially at times right now,
that's incredibly important is to have
great fashion at an outstanding value.
>> Right. But those things, Mark, are not
made in America. So, um, you know, the
age of cone mills denim is long gone. um
you've got to import them. They're cut
and sewed overseas and they're going to
have tariffs at least 15%.
Are you taking that into your margins or
are you passing that on to uh to the
consumer?
>> We announced at the beginning of the
back to school season that we were going
to hold pre-tariff pricing on all of the
key items. So whether that's denim,
t-shirts, backpacks, or fleece, we're
holding pre-tariff pricing, really last
year's pricing on this year's back to
school items is really a job of our
merchants to to be the buying agents for
our customers and we know what's most
important for them at that time. And so
at back to school, we know those are the
most important items and we're holding
prices on those items to make sure the
consumer sees the best value. You will
see us do similar things as we go into
the holiday season. And Mark, you bring
up denim and I want to talk a little bit
about what we're seeing in the apparel
space when it comes to what's going on
of course with American Eagle, their
denim ad with Sydney Sweeney. You saw
seemingly a response from Gap over the
weekend with their own denim ad. I
wonder as the CEO of Catalyst Brands,
how you approach advertising in this day
and age.
>> Right. So, uh, last week you also saw us
introduce our Addison Ray fit in our
Lucky Brand stores, you know, denim
focused. And Addison, um, we actually
took the Maggie fit, which was a '9s
heritage fit. Addison Ray was wearing
that. our team actually sent her a pair
of the jeans and she helped us co-design
uh a new product based on that Maggie
jean that we introduced last week and
you know it was incredible um incredible
on social and we've seen really strong
um response in in store sales and we're
seeing a younger customer come in for
that as they're finding that product in
social. So we think there's a you know
that there's real potential for those
collaborations.
Matt, in case you were wondering
wondering, Addison Ray is a Tik Tocker
who now is a pop star. She came out with
her debut album.
>> Uh, okay. So, a musician.
>> Yes.
>> From Tik Tok. I Pepsi. There was a long
time when I didn't know who Drake was.
So, I don't have the best uh the best
pop culture. Although, Sydney Sweeney is
uh a name that I know. Um, I w I want to
dig deeper into what's going to happen
to Brooks Brothers here, Mark, because I
think a lot of people grew up getting a
first suit at Brooks Brothers, getting
shirts made at Brooks Brothers. Um, uh,
the the fleece is a is a brand that I
think, uh, touches especially people on
Wall Street, our viewers. Um, so are we
going to see these brickandmortar stores
come back? Are you going to be selling
it through J Penney and online? I mean,
what's your what's your plan for this
iconic American brand?
>> Yeah, we're really pleased actually with
the results that we've seen in Brooks
Brothers. Brook Brooks Brothers had uh
has had really strong comp store sales
so far this year. Um, and really great
product out there. But I think as we're
talking about back to school, if you go
into Brooks Brothers right now, you'll
see our university shop, which is really
bringing in a younger customer with
things like rugies and V-neck sweaters
and and sort of the nostalgic um past of
varsity and going back to school. So,
we're seeing some really positive things
in that brand. And when you talk about
physical stores, we were also really
excited this summer to open a brand new
flagship store at 195 Broadway, kind of
in the heart of the financial district.
So those fullprics brother stores are
very profitable for us and you will see
us continue to grow because we believe
that full price store in the right mall
has a lot of potential.
>> And Mark, you know, we've talked about
some of the different brands that you
have uh under your stable. Brooks
Brothers being one of them. When you
look at the the landscape overall, you
are starting to see some consolidation
among consumer brands. Do you think that
there's room to add to your portfolio
here?
our focus right now like like I said we
came together in January and and we're
really building the combined power of
Catalyst and putting together our
sourcing operations putting together our
store operations and making sure that
everything we do behind the scenes we do
in the most efficient way so that we can
bring the consumer the best value and
then we're focused on the front end of
making sure that each of our brands
comes to life in a unique and distinct
way for consumers. If you look across
the portfolio from Brooks Brothers to J
C Penney to Eddie Bowerard to Nautica to
Lucky and Aerop Postal, right, they each
come to life in a different way. We are
building a platform and we believe as we
build those core capabilities that we
can add more brands into the platform
and and those brands are going to
benefit from that combined power of
sourcing and and store operations and
supply chain to bring the consumer great
brands at a better Value.