(Real Talk Series #24) Simeon Siegel
Guest: Simeon Siegel
Topics: BMO Capital Markets, retail trends
Chris Ressa 0:01
This is retail retold the story of how that store ended up in your neighborhood. I’m your host, Chris ReSSA. And I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC management.
Welcome to retail retold everyone. Today I’m joined by Simeon Siegel. Simeon is the Managing Director and senior retail analyst at BMO capital markets. He’s been covering retail equities. For 15 years, he’s regularly a guest on CNBC, to talk all things about the evolving retail landscape. excited to have him here. Welcome to the show, Simeon.
Simeon Siegel 0:47
Thanks, Chris, good to be here. And Happy New Year. Happy New Year to you too, man.
Why don’t you tell us a little bit about what you do, who you guys are and what you’re working on right now.
Sure, sounds good. So in the magical world of retail equity research, I analyze what is a constantly and perpetually changing landscape across retail, from a perspective for investors. So my task is to determine where retail is going on a company specific level, generally speaking for public equities for public stocks, and to recommend whether investors buy or sell them. Part of that is obviously understanding what the industry is doing and where it’s going. And ultimately, being able to chronicle being able to analyze and then in the instances where it makes sense, perhaps even help suggest ideas, is what we do from our seat. So what that means what we’re constantly doing is perpetually changing as well. And hopefully, if I’m doing my job, it’s tracking the trends. It’s using pattern recognition. But it’s also trying to perceive the future a little bit and trying to predict where we’re going. And that’s what makes this so interesting, because we’ve got this great qualitative blend of Cymatics, within retail, but there’s a lot of quantitative as well, and that fusion is what I love doing.
That’s really cool, interesting gig. And I’ve always been fascinated by the equity analyst, folks on Wall Street, and I think they always bring a unique perspective.
And might be the nicest thing anyone has ever said about the collective group of Wall Street analysts before. Look at that. Yes, I think when you really think Come on, man.
Well, I do you guys provide a lot of insights, and you provide a lens to someone like me, who is you’re taking a step back, right, and me, I am in the weeds of it, I’m talking to, or my team and my company, we’re talking to retailers everyday, we’re on the ground with three tailors. And they are and we’re doing business with them every day. So you that that cohort of people give us the opportunity to take a step back and say, Okay, this is what’s going on from a little bit higher level, which is important to do. So what I’ll
say is, if I am not in the weeds, I’m not doing my job all that well. So I agree with you, I hear your point, I think it’s important that we all take a step back. So I think that at the end of the day, that hedgehog and Fox thing if you can be a blend of both, right, so scary looking animal, but it makes a ton of sense. You can’t be higher level without understanding the weeds, and you can only be restricted to the weeds without knowing the implications. And that’s where this part, this idea of using the pattern recognition using what’s happened in the past, to make sure that we don’t continue to play into the future, the same mistakes we’ve made back then, right, the definition of retail insanity. I think that’s really critical. And that’s what I, my team, and I try to focus on, is to constantly take those weeds, take those nuanced, because again, we have to be talking to the retailer’s everyday as well. And then combine that to assess what’s the what’s the broader health, what’s the broader health of this company with the broader health of the macro environment, to then determine, Okay, where do we go from there. And one, one interesting example, was beginning of the pandemic, I remember one specific phone call I had, where I was talking to a vendor, and they made a comment that the retailer’s, cancelled all of their orders. But they expected them to still make all the product just in case. So they a retailer was essentially saying there’s no purchase order coming for holiday, but you make the product and you sit on it, you absorb the risk. And so talking this through all of a sudden, it just became so clear that there was going to be a lack of inventory for holiday. Not because of the port stoppage not because of shipping delays, simply because the factories shut down because people weren’t making orders that they weren’t getting paid to make them for. And so we created this future. Are bottleneck where inventory was going to just simply not be there? What’s so interesting along those lines? Is okay, what do you do with that, because if I were to tell you with a crystal ball, that six months from now, you’re going to sell fewer units simply because you have fewer units. Well, the natural course of action, if you can plan it ahead of time is to make sure you’re pricing those units up, sell less, charge more, make more money, but you have to be able to see that you have to be able to take that nuance, take that weeds, and try to extrapolate what that’s going to mean for the future.
Yeah, that’s a great point, awesome example. All I was getting to was in the if I were to connect, the example you just gave is you’re analyzing based on the retailers and their vendors in those and those people, I’m one of the vendors, I’m a landlord, right. So that vendor who talked to you about the risk that he had to take by, you know, potentially producing that product, and having to sit on it. I’m like that person, the person doing the business with those retailers day to day versus analyze my job being to analyze them, even though we have a lot of data and analyze the information in order to make good decisions about our properties and retailers. It’s a, it’s a little bit of a different lens, you you get to take a step back, because of your role versus that vendor or myself is the point I was making.
So all that means is you and I and me talking every day. Okay.
Fair enough. All right. I want to take us to some of the things you did in 2020. And some of the things you’re doing in the future, because I think you did some interesting things in 2020. And the first thing that I that really, I found and I thought was really thought provoking? Was you did a research project on retailers and retailers who had done mass closures. Can you tell us a little bit about what you find on that on? What you found when you did that research study? Yeah, so So this was
my team. And I had spent a nice amount of time when I apoptosis that ended up pivoting. And that’s, I guess, obviously, the best type of research where you don’t go in knowing what you’re going to find or even what you’re looking for. But playing off of it actually was related to this inventory theme, where we started looking at tangentially we started, everyone always talks about the death of the of retail, retail apocalypse, retail Armageddon, in big words, that sound great. And what we ended up looking through was this notion that in the report that the title of this report was did COVID actually save retail. And I know that’s a very potent title. And it’s not fair to many. But it seemed based on every media headline, that retail was in the course, the way we started describing it was, it was a downward, slightly downward facing hamster wheel. So you’re running in place, but you have this slight angle, which is bringing you downhill, and not in a good way. So this problem for decades, the mantra of retail became grow at all costs, and it was grow for growth’s sake. And the problem with growing for growth’s sake is bigger is not necessarily better. And what we found was there was a point in time where the incremental sale becomes a detrimental sale. And that makes a ton of sense when you’re not dealing with a commodity if you’re selling cereal. And at the end of the day, you supply as much as demand can take, if you’re selling something that has an artificial price, premium scarcity, value matters. And selling an extra sweater may actually devalue all of the prior sweaters. So what we did was we looked into we thought, okay, COVID is here. What does it mean for retail? And what we found, and this is the connection to that inventory story, what we found was that there have been plenty of companies that have had mast store closures, we the list is enormous. But what we found was that every single company that had a mass store closure, so their sales and their operating profit lower than when they did before the cut. And that’s on $1 basis, and it’s on a margin basis. And so that idea, which is not at all what we would have thought we would have found, right, the idea is close underperforming stores and your profit level should go up. What we found was all you’re doing is shrinking your business, if you’re trying to cut if you’re trying to grow by reducing expenses, all you’re doing is shrinking your business. So on the flip side, what we found was companies that were able to commit to raising price actually saw much higher profits. And so to wrap this up in a not so pretty bow. What we found was that out of a group of let’s say 30 companies we were looking At 30 of the largest publicly traded companies, so 30 of the largest companies around only five by our math and my team is math would benefit from a mass store closure, whereas only five wouldn’t benefit from raising price. And that became exactly the way you framed it. Focus the retail it seemed to us that the retail problem in America was not one of an oversaturation of stores, but an oversaturation of discounts. And a Focus on grabbing an incremental consumer when the reality is that incremental consumer isn’t always healthy for the business.
That is fantastic. refreshing to hear. It leads me to a bunch of questions. So I say it’s refreshing to hear because it’s just not what you hear in headline news. But it leads me to a bunch of questions. So here’s the first one. Would you say the same is true in the E commerce world because they are growing at all costs, and they’re growing the customer acquisition. And we often hear marketing is the new rent. And if you look at retailers, occupancy to sales ratio that are physical, and you look at pure play ecommerce retailers, and their marketing costs to sales, it’s significantly higher than retailers brick and mortar occupancy to sales, even when you combine that occupancy number with also their marketing number. And are they adding our E commerce retailers for the sake of growth adding a lot of unprofitable consumers today?
Yeah, so great question. I will before I get to it, I’ll just address one point there that I think is so critical, not only is marketing as a percent of sales, higher than occupancy as a percent of sales. But marketing is a variable percent of sales marketing doesn’t go away. It’s a unit cost. Whereas rent, plenty of rent per square foot, right. And I know that we’re shifting this conversation to becoming one of contingent rent, and there’s different aspects. But the simple idea that rent you know what it is, and therefore you can leverage rent, that’s how you make money, whereas marketing and everything else, right? Ecommerce is a structurally variable cost business, which I would argue is what has made it so hard to be profitable. So I think that that’s a it’s such an important point that I agree with. And I think it’s, it’s important to acknowledge not only is it higher, but it doesn’t go away. In terms of EECOM. Any business that is trying that relies on pricing ability needs to also run the equation of distribution versus exclusivity. Right. And we can talk about this, if you want, we can leave it alone, if you want. But exclusivity is just the ugly way of saying authenticity, they’re the same. I think they’re two sides of the same coin. you’re limiting your audience size. So that’s the choice of figuring out how big you want to be. Econ needs to do the same thing. Right? So econ is playing into this conversation of figuring out ultimately, do I want an infinite amount of consumers and by the way, there are obviously some very large marketplaces that do because they don’t care about pricing, they actually want to use pricing as a lever on the way down. So this matters for companies that are focused on pricing on the way up, that generally is more focused on the brand than it is on the retailer. Retailers selling other people’s goods generally are going to be more incentivized to sell more than to sell healthier, even though that’s counterintuitive, and probably simply factually incorrect. So I think that that’s the easy answer. Your question is yes, e comm does that do? The question is how big are they? Because we’re talking, there’s a certain scale element here. But at the end of the day, any single company that relies on pricing power, and that believes they’re selling something special needs to figure out what the right balance between exclusivity and distribution is.
That brings to the second question as a great answer brings me to the second question, though, the raising of price and you cover some of them like Planet Fitness. A lot of my tenants what they do is they provide a value proposition to the consumer. My tenants are Walmart and Target and Five Below and TJ x and the Burlington stores in dollar stores. Would you say they they fit into the same category that you were discussing about what you found out about the retailer’s about mass closures because it would appear that they’re their specialty is the ability to provide this value in raising prices would hurt them. So you’re
Yeah, and listen, the ones the companies you just mentioned are in a very fortunate ability that they are growing, right? Those are generally growth companies. So they’re generally anchors and they’re growing traffic. So they’re actually seeing people come into the stores. I think there’s an important thing to acknowledge. I think the People have generally talked about we’re in this instant gratification world, that must mean we love e commerce. People don’t love e commerce, people love convenience. So the beauty of the most of the companies you mentioned, I actually think it might be ironic or not. It’s the largest, the companies with the largest store fleets that see traffic growing. It’s the company’s with the 200, to 800 stores to completely over stereotype and oversimplify, that’s the traffic declines. Because if you think about it, right, and you’ll know this a lot more than I will. But if I All things considered all else equal, most people would rather be in an aisle than D in they’re on their couch in their underwear, it’s just more convenient to be sitting on your couch. So if I know that there’s 1500 stores, which means that they’re every most of the stores are going to be 10 minutes away. That’s a much easier pill to swallow. And an easier calculus to make, than to say I need to drive 20 minutes to a mall. So I think that that’s one thing, keep in mind where the company is your your companies that you just mentioned, are actually offering meaningful comedians, to they’re actually offering value that is their proposition. So that’s important. But three, they are all I think all of the ones you mentioned, if I if I go back in my head, I think they’re all selling other people’s things. And that’s a key differentiator as well. Because if you’re selling someone else’s goods, you actually don’t have the choice to raise price, you can obviously raise price, but only to a certain degree and you don’t get to by selling more, you’re not inherently going to be devaluing your store. That’s the question. The question is, you need to take a holistic view of the brand. If there’s a certain handbag, walking down the street, if there’s one handbag, you can charge a lot more than if there’s 1 million handbags, because ubiquity is not cool. People don’t want to see what their if they believe they’re paying up, they want to believe that it’s scarce. That means that that brand can make the decision to make to manufacture fewer goods that can price higher, if you’re selling other people’s goods, your goal is to sell more, rather than to sell healthier, even though again, like I said, that’s you shouldn’t be selling out here, which is not in your control. If you as a specific retailer or a third party retailer decide to sell fewer goods, they’ll make it up somewhere else, and then doesn’t help you at all.
Sure, I think the key point and one of the things that we like is about the a lot of our retail tenants is majority of Americans are craving value. And we love the convenience and the value that a lot of our retail partners can provide to the American consumer, if you’re in a world where I don’t know what it is say. But a couple years ago, 78% of consumers were paycheck to paycheck value is important. They can’t afford to pay for delivery for everything, and every retailer can’t afford to give free delivery. And therefore there’s this physical retailer that can provide a value to the consumer. And also proud to provide a convenience. You mentioned convenience. And I think it depends on your definition of convenience. You know, for me, it’s pretty convenient to get in my car and hop to target real quick. That’s more convenient than ordering on the couch and getting it even in a couple hours or maybe tomorrow. If I want it now I can go grab it. And there are certain products that you need. Now in the middle of the pandemic. One of the things that I story I tell is I have a three and a two year old and we needed diapers. And we went on Amazon and was saying like six weeks. And I was like well, how does that work? Can’t have diapers six weeks from now that won’t that won’t work. And I went on to Walmart’s website. And I saw, you know four stores locally to me where they had them. And I went and got them that day. So to me that was convenient versus ordering from my couch and waiting even 24 hours would have been problematic. And I took over, I took over I took over in my household that having diapers in the house was my responsibility. That was one of the things that happened during the pandemic. So pampers are my responsibility. Yes.
So does that mean it’s not convenient? Or is that mean, you want it now? Right? And I think that there’s a question there because I think we have to be careful because if I told you that Instacart would get it to you faster than you could bring it home, it’s obviously still more convenient to be at home. So I think there’s a little bit of this gating factor. Where wasn’t the fact that the delivery service can bring it to you is also obviously critically dependent on the store being there, right. They’re bringing from the store, not from a DC. So it’s just another version of shopping. So I think that that we can’t let that go alone.
Yeah, that’s a great point. I think you should hit on that. That is a great point. They add at least today and it seems like the foreseeable future that last mile with the perception of Amazon is really the store. Yeah. So
I think that that’s, that’s really important we think about that. But what I will say is, to me, again, everything is some formula, everything is some equation. And the notion, it’s obviously more convenient, right? In podcast air quotes, it’s more convenient to be on a couch, because it’s just easier, right? Convenience disease, but doesn’t mean it’s a better experience. So the question is, how difficult? How inconvenient is it to get to drive out to a big box retailer, or a grocery store that’s within that five to 10 minute drive? It’s not that inconvenient if you have a car, right? So I think that that’s the point where all else equal and as I say, All else equal, you’d rather be picking your own apples, right? You’d rather be able to decide what you want. But there’s a price and it’s less convenience. So the question becomes, that’s why I say ironically, or not the stores that have at least whatever over 1000 stores generally 1500 generally mean they’re closer to you. And therefore you find that they’re more advantageous. I think there’s no question, there’s value to that.
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Let’s pivot a second and let’s in anything else before a pivot anything else on this research project you did did COVID Save retail that you think is insightful that we should talk about.
I could talk about it for days. But without without going page by page or exhibit by exhibit I think those were the main pieces. And I think that ultimately what it did was it showed us that there was an opportunity for context if companies were willing to commit and again, these are more brands than they are third party retailers because you have to be able to see the benefit of the price elasticity. But companies that commit to raising price 25%, which sounds like a lot until you think about it in the context of the sheer dollar either a $20 T shirt going to 25 bucks. But companies that are willing to commit to 25% Lift could actually see as long as they lost less than 40% of their units could still come out ahead, I want to say that again. As long as you’re willing to raise price 25% and stick to it, you can give up 40% of your units and still come out ahead. Now again, that’s an average number, we have company specific pieces. So don’t just take that and apply it run your own flex that analysis. But it was just so clear that there’s some of these really large companies had simply gotten too large, and they indeed valued what their brand stood for.
And who are some of the companies that were in this 30 store project Who were some of the brands
who were the poster children for this what we looked for was we looked for very large brands so I looked my team put together this great scatterplot looking at the largest revenues and the lowest profits because the way that I view it is revenues are a measure of customer buy in gross profit is a measure of brand perception of external brand perception. If you have a lot of revenues and a little bit of profit people want your stuff but they don’t want it that badly. Right they waiting for the deal they’re telling you is worth a lot less than you think. Flip that equation sell less charge more make more so that’s what we look for the two we upgraded so in my world I we have ratings on stocks, we upgraded shares of Elle brands, which owns Victoria’s Secret Bath and Bodyworks and shares of Under Armour at the very beginning of the pandemic for exactly this reason to incredibly large global brands that people love, but had seen their profits plummet in recent years, because I argue they had gone too far. So that’s Victoria’s Secret and Under Armour. And what we’ve seen since then that was early April, May, somewhere around around the early the pandemic. Well, we’ve seen since then we’ve seen a very market and intense, a purposeful shift, to shrink their revenues to grow their profits, not to shrink their expenses to grow their profits, they did shrink expenses, but it was a measure of acknowledging that the revenue base was not healthy for them. So you watch them buy inventory down meaningfully, you watch them promote meaningfully less with this view of recapturing what the brand stood for, even if it meant losing. And losing is too passive of a word because it was active, it was firing certain customers. And what they essentially said was, if you want something from Victoria’s Secret, or if you want a pair of sweatpants from Under Armour, understand there is premium built into this, therefore the price needs to reflect it, and you will not get it at 60% off anymore. And when they did that, we started seeing a very healthy climb in profits, even though revenues continued to fall.
And one more time, this is total gross profits and not just percentages, we’re talking, they had more money, less revenue, they had just more money in their hands.
Speaker 2 26:24
More money in the bank. Wow, on less revenues.
Very, very interesting. And it’s not from cutting stores.
The reality is everyone needs to prune underperforming stores. But it’s not a mass closure. It’s not that no one has ever and it is exactly that right? clothing stores is defensive. It’s not offensive. No one has ever gotten bigger by shutting stores. And then well we all know is that when you start your stores, you also lose corresponding e commerce dollars that are in the neighboring area.
Yeah, for sure. Let’s this has been fascinating. And we’ll talk about where people can find you after. Let’s pivot to the next thing now. We’re in 2021 Give us a glimpse of how you’re viewing what happens next in retail.
Yeah, so I like like no one has a crystal ball. But what I would say is, if the most interesting factor for me last year was this forced lack of inventory reminded people to sell less and raise price. The big question is going to be now that inventory is open now that factories are back now that the inventory stop at the port stop, which is clear themselves up. And we post holiday resumes some level of shipping normalcy. What do people buy inventory? What do they plan? And we don’t yet know, because we’re just turning the corner on 2021. But the question is going to be two companies that got smaller, take their medicine, do they hold the line and acknowledge that they’re better a smaller businesses and focus on health and healthy growth rather than growth for growth’s sake? Or do we find ourselves back in that prisoner’s dilemma? where someone says, I can cross the picket line if no one else does, right? So are they going to hold the inventory line? Are they going to cross it? And if they cross it, how many people are going to do that? Who’s going to be the one that says, I can sell more goods at that higher price? And it’s not going to hurt me? Because inevitably, that’s where the dominoes fall. And I think that that’s what’s going to be so interesting to see. I think that for those fortunate, I recognize that this this comment is very bifurcated. And therefore not it’s it’s an unfair comment. But for those that we’re fortunate enough to survive COVID they then are figuring out, are they going to thrive posted that it was this forced reset? And for these businesses, it was an opportunity to refashion our business for the future? question is do they maintain that human psychology human tendency human nature is to forget the lessons we’ve learned and to continue repeating right again, back to that retail insanity continue making the same mistake over hopefully this was an awakening. Hopefully, this was an opportunity for these companies to acknowledge that they need to focus on profitable growth. But I think we’re going to see it in inventory. And I think that if all of a sudden as shoppers, we start seeing a lot of heavy promotion, we’re going to know that all that learning last year was for naught. And hopefully we can take these lessons and actually focus on the health of the business. Don’t just look to cut expenses look to maintain the right level of revenue, so that you can justify the profits.
Holiday 2020 wasn’t what you expected.
And the numbers aren’t out yet but I would when I walked into holiday 2020 My team and I believe we were going to see a lighter revenue, heavier profits season with very few discounts. So really good if you’re the retailer, not as exciting when you’re holiday when you when you’re trying to find presents under the tree and a great deal. I think that’s what we saw. I think we saw that the companies that I think we saw that for the first time in a long time a holiday where Demand outstripped supply. I think we saw a for the first time in a long time, a non chaotic holiday to an orderly holiday, where retailers and brands were able to bring the holiday early. And I think more importantly than anything, we saw the first holiday since oh eight, where the consumer could not demand whatever they wanted. We saw a shift in the balance of power back to the providers of content back to the retailers and the brands, away from the consumers of content, which had been probably the largest culprit for the biggest erosion of profits we’ve seen over the last decade.
Before we end, what level of research do you do on E commerce and digitally native brands and all that stuff? Do you guys you know, a lot of them aren’t public? Do you? Do you cover you following? Are you tracking? What are you doing there?
Yeah, so my view is to be able to opine on the largest players, you need to understand the entire ecosystem. So we spend a lot of time across the board. We publish reports only on the public stocks, that’s that’s our mandate. But at the end of the day, if someone calls up my team, and we don’t know, what a digitally native brand, is that the problem?
Got it. One of the things that I’ve been wondering is, many of these digitally native brands went into COVID. unprofitable, whereas well, many of the physical retailers, they may have had declining sales, but they went into COVID. At least they were generating profit. Where How do you think that plays out as we move into 2021?
Yeah, so I think two things one, going back to the prior comment, I think that that speaks to the idea of fixed versus variable cost. An ecommerce business with variable cost doesn’t matter how large they get the cost never go away. A fixed cost business, once you cover your fixed costs, once you cover your rent, everything else is gravy. So I think that that’s really important. I think that’s one of the reasons we have now seen a meaningful shift. It’s not new news anymore. But in the last five years, we’ve seen a meaningful shift for the digitally natives. We no longer call them DTC business. We call them digitally native because they started off digitally, but now they’re omni channel. Right? We what I I’ve said this before, I think it’s important, I think omni channel, pre pandemic essentially meant e commerce, right? That was the special part. Everyone knew you had stores and you have econ, what people need to remember is omni channel was the answer. It’s not EECOM. In the pandemic, it became we reverted back to a mono channel retail environment, because you were just going online, but we need to reverse they both have to coexist. And that was very important for profits. Now, to your point, I think another another thing that I’ve been being intellectually honest with myself, if you ask me, okay, so you’re making a bunch of calls, what when you get wrong, I thought exactly what you just described, I thought at the beginning of the pandemic, this was going to be the day of reckoning for a whole host of digitally native VC funded profitless businesses. That’s what I thought as well. And, and how wrong were we Right? Like, it happened to be coincidentally or not, but they were also in sweatpants. But at the end of the day, these businesses were nimble, and they knew how to market to their consumer. And they managed to continue to get their product that was desired into the hands of the consumers that were willing to spend. So I think that the reality is there’s been this pivot and what it means for profitability, what it means for terminal values, and all of those will, that hasn’t changed. But the ability to be nimble at listen to, during the pandemic, large businesses, the largest businesses in the world, and the smallest startups were put on equal footing. If you lose all your revenues, and you don’t have to pay any expenses, then what’s the marketing a startup in a large conglomerate? So all of a sudden, you had to think about it in the same line, right? You have to think about where you want to be. And it gave this really interesting, equal footing. That obviously goes away as soon as doors open. But it lets you rethink how you want to approach the business. And I think that was the most interesting takeaway of acknowledging, what do you want to be when you grow up? If you’re a retailer or brand, don’t let it happen to you take control of your corporate life.
Awesome. And with that, we will move on to the final segment of the show, as has been great. Call the final segment, retail wisdom, you’re studying retailers, but you focus on retailers that have physical presence so you you see real estate from afar. First question we ask people and this is the last episode we’re asking these three questions. So for those listeners out there, we have a new set of retail wisdom coming for 2021. But here’s the questions. Are you ready, Simeon? Ready as I’ll ever be. What is your best piece of commercial real estate advice?
My best piece of commercial real estate advice is to know what you know and know what you don’t and commercial real estate is not something that I should be that I should be advisor enough
Fair enough. But you do you do see all the groups that you cover make real estate decisions, whether it’s opening stores and closing stores, and you see them making real estate decisions all the time.
Yeah, I think don’t just close the store because it’s easy. I think don’t just don’t don’t, it is the, I’m gonna say most obvious without being most correct. I think it might be the most obvious and most glaring and most, most recent, most 2000 to 2020 decision to close stores, if they just seem like they’re underperforming. Instead, focus on how to elevate the stores. Ultimately, if you can’t ultimately, if they are dragged, then yes, obviously, you should prune underperforming boxes. But don’t just put a giant x because those businesses are generating revenue, ask yourself why they’re not being profitable first.
Love that. Next question, fan favorite. Number two, what extinct retailer Do you wish would come back from the dead?
So I used to go play world. And I don’t know how big we have to do whether they’re changed. But I used to go to my grandmother. When I was really young, every time I would go visit her, she would take me to this one toy store. And I think it was called playworld. And if not, I’ll just fall back and go with KB Toys. But it was every I’d get an action figure every time I went, I always wonder where they all disappear too. But it was this great experiential feeling for a four year old. It was just aisles with action figures. So there was nothing experiential about it. But it’s all some really nice memories in toy stores. And I think that as we think about toy stores, toy stores, unfortunately, as commodities, because all they are aisles and toys became a very hard business. But I think for kids being able to walk up and down an aisle and just go crazy is is a special experience.
Very cool. Great answer. Last question. You ready? Drumroll? All right. We’re sitting here you have I normally have a beard. I don’t you have a very nice beard. I am on the beard Club’s website.
And they have their starter kit, which has a straight edge razor, cedar, beard balm, Beard Shampoo, beard oil and a beard brush. What does that retail for?
Is not a fair question. Because if you would see my beard, you’ll see that in no way as my beard remotely groomed, the product you listed are not something I’ve ever used. Let’s go with I’m going to assume you’re only talking to me with some version of premium material. And I’m going to assume you’re not trying to sign me up to a subscription box. So let’s just say a nice kit for I don’t know 6999. But I have no idea what products are even listed to me because I’ve not you’ve never
used them give you a little bit of your own medicines. First off, you’re close $65 regularly. However, however, they they do it they’re doing the CIP there. There is a percentage off and right now it’s retailing at $38.
By the way, you know why there’s a percentage off because people like me during COVID are not doing anything involving grooming with their beards over here. Anyway, right? Well, let’s close with the 65. Yeah, that’s right rule says I lost.
Yes. So where? Where can people find you semi?
I’m fairly accessible on LinkedIn. So Simeon Segal, otherwise my email finds its way out across more avenues than I want. I think it might it might be hackable somewhere to but LinkedIn is probably the best place to find me initially. Awesome. And I’m generally fairly approachable. If I can help, please just let me know.
You’re on TV often. How often can we find you? When can we usually find you on CNBC and places like that?
Well, now that I know that there’s a deal on a grooming set, I can can return to my TV. I tried to be helpful to whoever’s asking so generally speaking, my media appearances are throughout but I think they also managed to find their way onto LinkedIn so that that ends up being a good amalgamation of anything in my life. That’s worthwhile. Apparently that is not family related.
Awesome. Well, Simeon, this has been great, really appreciate it. Thanks so much for coming on, man.
Good to be here. Appreciate it. Happy New Year and I’m glad I can close out the last three questions. I can’t wait to hear what the next three are.
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