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Black Friday: ‘We had really strong volume over the weekend,’ New Balance CEO says

New Balance CEO Joe Preston joins Yahoo Finance Live to discuss the holiday shopping season, the most in-demand products, shoe inventory, and the resale market.

Video Transcript

AKIKO FUJITA: Well, Black Friday and Cyber Monday may be behind us, but the holiday shopping season just beginning. For more on the holiday shopping trends and habits, we have our Yahoo Finance's Brad Smith-- can we call you our resident sneakerhead-- standing by with a special guest, New Balance CEO Joe Preston.

BRAD SMITH: Yes, I will take the title for now, Akiko. I appreciate that. And thanks for teeing up the conversation. Yes, joining us here on set, we've got the CEO of New Balance, Joe Preston. Joe, thanks so much for joining us in studio here.

JOE PRESTON: Well, thanks for having me.

BRAD SMITH: Absolutely. This is a big time of the year for you guys because there is so much that we're tracking on the inventory trends, on just what the hot topics and hot items are that are moving off of shelves. For New Balance, what are you seeing right now currently in this holiday kind of sellthrough period as compared to years past?

JOE PRESTON: Yeah. Well, we've had a really strong year. We had a record Q3, and that's given us great momentum, as we head into the holiday season. So Black Friday and over the weekend, we had really strong volume on our website, newbalance.com, as well as through our own stores and our partner stores. So we feel really confident that we're going to continue to have that momentum.

The search for our brand has been up significantly all year, which is a pretty good indicator of interest. And it's happening here and around the world.

BRAD SMITH: Now, let's talk about some of the categories and what's doing really well for you right now because a lot of people, like myself, I grew up and I had to have a pair of the classic New Balance grays just on stock in the closet at any time because they go with any fit. But now, you've got basketball. You've got tennis. You've got skateboarding. You still have the running category. Where are you seeing the outperformance in where customers are gravitating towards?

JOE PRESTON: We're attracting a younger consumer. And those younger consumers are coming into our brand. And they're really coming across our categories. But running is at our core. Our classic products that we introduced many years ago, the 990 was the first $100 running shoe, was introduced in 1982, which just celebrated its 40th anniversary with the introduction of the V6. But our entry back into basketball with the signing of Kawhi Leonard in the past three or four years ago has given us great energy in that category. And that's transcending across multiple categories as well.

BRAD SMITH: Big claw energy with Kawhi for sure there. When we think about those categories and additionally, pricing strategy right now, too, we've seen and heard so much in retail about pricing being passed through to consumers. What's the strategy been over at New Balance, especially when you look across the landscape when it comes to the sneaker category right now?

JOE PRESTON: Well, we've tried to be selective. So we have tried to pass along some of the costs that we've been absorbing, whether through labor or through logistics and other elements of that. And so as we come into the holiday season, there's also inventory in the marketplace. That we have inventory and our retailers have inventory. And we're trying to be selective about where we're promoting. So some of our product is on sale if we have more heavy inventory in this other product that is holding price.

BRAD SMITH: Does that mean you're pulling back some inventory from some of the historical retailers that you would have worked to, especially in a more direct-to-consumer environment right now?

JOE PRESTON: No, the answer to that is no. But being direct to consumer through our stores and online is allowing us to get closer to the consumer. That is absolutely imperative on our behalf. We think it's a big reason for our brand momentum. And we think it makes us a better partner for our wholesale partners.

BRAD SMITH: We were talking a little bit before our discussion here about the resale market and how crazy things have gotten. I mean, you go in any of the stores or on the online capacity, and you could see a New Balance shoe reselling for double, maybe triple what it's going for in retail. As you kind of survey the resale environment right now, what comes to your mind? And how does that really shift the strategy over at New Balance, too?

JOE PRESTON: Well, it's probably two parts to it. One of them is when we have a drop, we want to make sure that product is getting to actual consumers and making sure that individual with bots and those type of things are not breaking through, if you will. But when you see product being resold secondary market, it is an indicator of your brand health. It is an indicator of the amount of supply and demand that you have for a particular model. And we do watch it.

BRAD SMITH: Some other companies in this landscape, Nike particularly, they've gone as far as to kind of set in some curbs for resellers when they recognize bots or when they recognize that they're having high restocking. Is that something that New Balance has had to consider as well?

JOE PRESTON: We've definitely brought in technology to allow us to combat the bots.

BRAD SMITH: Interesting. And then just lastly here, while we've got you, look, I know you are wearing some of the overseas produced. Walk us through the model that you've got on right now. What's really selling this holiday season, too? What are you seeing--

JOE PRESTON: So I'm wearing a model that's made in the UK. We're the only athletic manufacturer that has facilities in the UK. We're also the only athletic manufacturer that has facilities here in the US. We have three factories in Maine. We have two in Massachusetts in the Made in USA component of our-- which, as a small portion of our overall volume, is really important to us because it is about craftsmanship. It allows us to also get closer to the consumer.

BRAD SMITH: They're just super comfortable, man. I mean, my goodness, every time I put them on, Joe, honestly, it's a really comfortable shoe. You guys have been doing really great work and excelling into some of those new categories as well in the sneaker game. We appreciate you taking the time here on set.

JOE PRESTON: Thanks for having me.

BRAD SMITH: Absolutely. It's Joe Preston, the New Balance CEO. And Akiko, I'll toss things back on over to you.

AKIKO FUJITA: We didn't get a chance to see Joe's sneakers. You have to send us a photo later.

BRAD SMITH: Yes, will do.

AKIKO FUJITA: All right, Brad Smith with that interview. Thanks so much for that.