WEBVTT 00:00:00.000 --> 00:00:03.080 align:middle line:90% 00:00:03.080 --> 00:00:04.270 align:middle line:90% ADAM SHAPIRO: Welcome back. 00:00:04.270 --> 00:00:08.560 align:middle line:84% Brian Sozzi has been tracking this year's retail apocalypse. 00:00:08.560 --> 00:00:10.990 align:middle line:90% And, Brian, let's start with-- 00:00:10.990 --> 00:00:13.780 align:middle line:84% I hate to say the biggest losers of 2020 00:00:13.780 --> 00:00:15.910 align:middle line:84% because I know who you're going to say, 00:00:15.910 --> 00:00:20.120 align:middle line:84% and the company does a lot, but go for it. 00:00:20.120 --> 00:00:22.390 align:middle line:84% BRIAN SOZZI: Well, it's more fun to start on the biggest losers 00:00:22.390 --> 00:00:23.190 align:middle line:90% there, Adam. 00:00:23.190 --> 00:00:26.220 align:middle line:84% It's just true disaster stories that perfectly encapsulates 00:00:26.220 --> 00:00:29.190 align:middle line:84% the "retailpocalypse," which essentially is just doom 00:00:29.190 --> 00:00:31.263 align:middle line:84% and gloom spreading throughout retail through a lot of store 00:00:31.263 --> 00:00:32.130 align:middle line:90% closures and bankruptcies. 00:00:32.130 --> 00:00:34.650 align:middle line:84% But the biggest loser is absolutely Macy's. 00:00:34.650 --> 00:00:36.480 align:middle line:84% This company has been an absolute train 00:00:36.480 --> 00:00:37.950 align:middle line:90% wreck throughout 2020. 00:00:37.950 --> 00:00:41.880 align:middle line:84% You had same-store sales down about 20% in the third quarter. 00:00:41.880 --> 00:00:43.320 align:middle line:84% They came out in February said they're 00:00:43.320 --> 00:00:47.400 align:middle line:84% closing 125 stores in the hopes to save $1.5 billion. 00:00:47.400 --> 00:00:48.720 align:middle line:90% A true disaster. 00:00:48.720 --> 00:00:49.680 align:middle line:90% They're hemorrhaging money. 00:00:49.680 --> 00:00:50.940 align:middle line:90% They have a lot of debt. 00:00:50.940 --> 00:00:52.520 align:middle line:90% It's not a good situation. 00:00:52.520 --> 00:00:53.970 align:middle line:84% And what I think Macy's executives still 00:00:53.970 --> 00:00:56.590 align:middle line:84% don't quite understand is that once humans get vaccinated, 00:00:56.590 --> 00:00:57.390 align:middle line:90% you know what? 00:00:57.390 --> 00:00:59.040 align:middle line:84% We actually like shopping online. 00:00:59.040 --> 00:01:01.200 align:middle line:84% We're not going back into your big, giant stores 00:01:01.200 --> 00:01:02.850 align:middle line:84% with no employees for customer service. 00:01:02.850 --> 00:01:03.960 align:middle line:90% Bye-bye, Macy's. 00:01:03.960 --> 00:01:06.960 align:middle line:84% I think this company is set up a very challenging 2021. 00:01:06.960 --> 00:01:09.490 align:middle line:84% SEANA SMITH: Well, Sozz, as we have clear losers, 00:01:09.490 --> 00:01:11.260 align:middle line:84% there's also clear winners from this pandemic. 00:01:11.260 --> 00:01:14.100 align:middle line:84% A couple of retailers have really outperformed their peers 00:01:14.100 --> 00:01:15.700 align:middle line:90% over the last several months. 00:01:15.700 --> 00:01:18.840 align:middle line:84% What's one or is there one retailer that you would say is 00:01:18.840 --> 00:01:20.910 align:middle line:90% the big winner for this year? 00:01:20.910 --> 00:01:23.390 align:middle line:84% BRIAN SOZZI: Big winner, Seana, is Lululemon. 00:01:23.390 --> 00:01:26.220 align:middle line:84% What you can't see on camera is I'm wearing joggers right now, 00:01:26.220 --> 00:01:28.130 align:middle line:84% and yeah, they're from Lululemon. 00:01:28.130 --> 00:01:30.950 align:middle line:84% It's just the new work-from-home attire, 00:01:30.950 --> 00:01:33.630 align:middle line:84% and you continue to see it in Lululemon's earnings. 00:01:33.630 --> 00:01:36.990 align:middle line:84% Now, their stores were closed in the second quarter, 00:01:36.990 --> 00:01:39.605 align:middle line:84% so you only saw same-store sales up about 8/10 of a percent. 00:01:39.605 --> 00:01:42.773 align:middle line:84% But the company is going to report earnings on December 10, 00:01:42.773 --> 00:01:44.540 align:middle line:84% and a lot of analysts that I talked to on the Street, 00:01:44.540 --> 00:01:46.140 align:middle line:84% they're looking for a blowout quarter. 00:01:46.140 --> 00:01:49.640 align:middle line:84% Same-store sales potentially near 10% increase. 00:01:49.640 --> 00:01:50.510 align:middle line:90% That is huge. 00:01:50.510 --> 00:01:52.650 align:middle line:84% You're not seeing those gains anywhere else. 00:01:52.650 --> 00:01:53.450 align:middle line:90% Bottom line is this. 00:01:53.450 --> 00:01:54.950 align:middle line:84% The company continues to innovate. 00:01:54.950 --> 00:01:57.680 align:middle line:84% People continue to spend $130 on these pairs 00:01:57.680 --> 00:01:59.870 align:middle line:84% of joggers and various clothing from the company. 00:01:59.870 --> 00:02:01.490 align:middle line:84% And oh yeah, in the middle of the year 00:02:01.490 --> 00:02:03.590 align:middle line:84% they spent $500 million to buy Mirror, 00:02:03.590 --> 00:02:05.420 align:middle line:84% and you walk into a Lululemon store now 00:02:05.420 --> 00:02:07.100 align:middle line:84% and you see Mirrors start to be on sale. 00:02:07.100 --> 00:02:08.810 align:middle line:84% It's a good story right now and probably 00:02:08.810 --> 00:02:13.183 align:middle line:90% a good story for 2021 too. 00:02:13.183 --> 00:02:15.150 align:middle line:84% SEANA SMITH: Hey, Sozz, I want to ask you about that Mirror 00:02:15.150 --> 00:02:16.800 align:middle line:84% purchase because I think a lot of people 00:02:16.800 --> 00:02:18.840 align:middle line:84% were questioning whether or not that $500 million 00:02:18.840 --> 00:02:21.645 align:middle line:84% acquisition made sense, if it was going to outperform 00:02:21.645 --> 00:02:23.190 align:middle line:90% here over the next-- 00:02:23.190 --> 00:02:25.560 align:middle line:84% I mean looking beyond 2020, beyond 2021, 00:02:25.560 --> 00:02:26.640 align:middle line:90% if it was going to be a winner. 00:02:26.640 --> 00:02:29.340 align:middle line:84% But it sounds like you think it actually was the right move 00:02:29.340 --> 00:02:31.530 align:middle line:84% and it could compete even though there's a clear winner 00:02:31.530 --> 00:02:33.547 align:middle line:90% out there, and that's Peloton. 00:02:33.547 --> 00:02:34.480 align:middle line:90% BRIAN SOZZI: Look at it now. 00:02:34.480 --> 00:02:37.780 align:middle line:84% Ever since Lululemon made that acquisition of Mirror 00:02:37.780 --> 00:02:41.050 align:middle line:84% during the early summer, Peloton's valuation 00:02:41.050 --> 00:02:42.590 align:middle line:90% has gone even higher. 00:02:42.590 --> 00:02:45.340 align:middle line:84% So it tells you that Lululemon, while they paid out 00:02:45.340 --> 00:02:47.680 align:middle line:84% through their nose for this to buy Mirror, 00:02:47.680 --> 00:02:49.270 align:middle line:84% it looks to be at a somewhat decent 00:02:49.270 --> 00:02:51.340 align:middle line:90% valuation given where Lulu-- 00:02:51.340 --> 00:02:53.020 align:middle line:90% where Peloton has come since. 00:02:53.020 --> 00:02:54.730 align:middle line:84% But the reason why they pulled the trigger 00:02:54.730 --> 00:02:56.740 align:middle line:84% is because a lot of Mirror shoppers 00:02:56.740 --> 00:02:58.270 align:middle line:90% obviously go to Lululemon. 00:02:58.270 --> 00:03:01.270 align:middle line:84% So there was a lot of overlap there, a lot of great data that 00:03:01.270 --> 00:03:04.900 align:middle line:84% will help them sell more tight joggers for $130 a pop 00:03:04.900 --> 00:03:07.980 align:middle line:90% and really expensive Mirrors. 00:03:07.980 --> 00:03:11.160 align:middle line:84% ADAM SHAPIRO: Brian, I know that Target was our company 00:03:11.160 --> 00:03:12.540 align:middle line:90% of the year last year. 00:03:12.540 --> 00:03:15.520 align:middle line:84% They're the most interesting story of the year. 00:03:15.520 --> 00:03:17.100 align:middle line:90% Why so? 00:03:17.100 --> 00:03:18.400 align:middle line:84% BRIAN SOZZI: Well, Target is not-- it's 00:03:18.400 --> 00:03:20.170 align:middle line:90% not a new retailer, Adam. 00:03:20.170 --> 00:03:24.040 align:middle line:84% They operate 1,900 stores, yet they have put up growth rates 00:03:24.040 --> 00:03:27.550 align:middle line:84% this year as if they were-- they have reinvented the wheel 00:03:27.550 --> 00:03:29.770 align:middle line:84% or they're some kind of new magical retailer 00:03:29.770 --> 00:03:31.930 align:middle line:90% selling magical products. 00:03:31.930 --> 00:03:35.860 align:middle line:84% But really, they had 155% same-store online sales 00:03:35.860 --> 00:03:37.000 align:middle line:90% growth in the third quarter. 00:03:37.000 --> 00:03:40.000 align:middle line:84% Again, that's another-- that was another triple-digit increase 00:03:40.000 --> 00:03:41.560 align:middle line:90% for this company. 00:03:41.560 --> 00:03:43.780 align:middle line:84% Same-store sales up in the third quarter 10%. 00:03:43.780 --> 00:03:45.670 align:middle line:84% You don't see retailers put up numbers 00:03:45.670 --> 00:03:48.730 align:middle line:84% like this, let alone a company that has 1,900 stores. 00:03:48.730 --> 00:03:50.230 align:middle line:84% For them, it really boils down to two things. 00:03:50.230 --> 00:03:52.090 align:middle line:84% I like the new Ulta deal they signed. 00:03:52.090 --> 00:03:55.600 align:middle line:84% You will see more shops opening up in Targets-- 00:03:55.600 --> 00:03:57.970 align:middle line:84% Ulta, the shops, opening in Target 00:03:57.970 --> 00:03:59.360 align:middle line:90% by the fall of next year. 00:03:59.360 --> 00:04:01.330 align:middle line:84% Also too they have just reinvented their business. 00:04:01.330 --> 00:04:03.730 align:middle line:84% I can order something right now from Target, 00:04:03.730 --> 00:04:04.930 align:middle line:90% drive up into the parking lot. 00:04:04.930 --> 00:04:07.840 align:middle line:84% A Target employee brings me out my $200 in groceries 00:04:07.840 --> 00:04:08.930 align:middle line:90% and call it a day. 00:04:08.930 --> 00:04:11.170 align:middle line:84% That's a great ease and convenience. 00:04:11.170 --> 00:04:12.370 align:middle line:84% ADAM SHAPIRO: So let's look forward. 00:04:12.370 --> 00:04:15.700 align:middle line:84% After we've dogged Macy's, we've praised Target, what's going 00:04:15.700 --> 00:04:17.380 align:middle line:90% to happen to big-box stores? 00:04:17.380 --> 00:04:18.490 align:middle line:90% Are malls dead? 00:04:18.490 --> 00:04:21.887 align:middle line:84% Is there going to be a mall that anyone wants to go to? 00:04:21.887 --> 00:04:23.020 align:middle line:84% BRIAN SOZZI: Malls are done, Adam. 00:04:23.020 --> 00:04:24.280 align:middle line:84% I hate to be the bearer of bad news 00:04:24.280 --> 00:04:27.210 align:middle line:84% and end this fine, fabulous special with being 00:04:27.210 --> 00:04:29.340 align:middle line:84% a Debbie Downer, but malls essentially 00:04:29.340 --> 00:04:30.910 align:middle line:90% no longer serve any purpose. 00:04:30.910 --> 00:04:31.830 align:middle line:90% I can go to Target. 00:04:31.830 --> 00:04:34.860 align:middle line:84% I can have now same-day delivery through their ship service, 00:04:34.860 --> 00:04:38.160 align:middle line:84% and they can deliver me my clothes, my new Levi's jeans, 00:04:38.160 --> 00:04:39.930 align:middle line:84% which also is another win with Target 00:04:39.930 --> 00:04:42.870 align:middle line:84% because they're now selling Levi's jeans inside of Target. 00:04:42.870 --> 00:04:44.580 align:middle line:84% They can have it in my house for under an hour. 00:04:44.580 --> 00:04:47.850 align:middle line:84% Why do I need to go to the mall and risk getting sick? 00:04:47.850 --> 00:04:48.650 align:middle line:90% SEANA SMITH: No. 00:04:48.650 --> 00:04:50.810 align:middle line:84% Less and less people are traveling to malls, especially 00:04:50.810 --> 00:04:52.730 align:middle line:84% these days, but also just before the pandemic, 00:04:52.730 --> 00:04:54.440 align:middle line:84% it already seemed like it was dying here. 00:04:54.440 --> 00:04:58.310 align:middle line:84% All right, Sozz, thanks so much for joining us.