Janet Kloppenburg of JJK Research joins Yahoo Finance’s Alexis Christoforous and Brian Sozzi to discuss how the back-to-school debate is impacting retailers, the future of the mall and Brook Brothers, in addition to the latest on Kayne West.
ALEXIS CHRISTOFOROUS: This time of year is traditionally known for back to school shopping, but as states are still unsure of what school is going to look like in the fall, a lot of parents and kids are holding back from fleeing to the stores to purchase everything from clothing to school supplies. Here to discuss that and more is Janet Kloppenburg of JJK Research. Janet, good to see you.
I know just anecdotally, people aren't out there shopping. We had our senior producer go to Target yesterday, and she said, you know, usually things are picked over by this point, in the back to school section. Everything looked pristine. What does this mean? If there is no real back to school shopping season, what does it mean for the Targets and Walmarts of the world?
JANET KLOPPENBURG: Well, it means that-- it-- it's like having a prolonged snowstorm. I mean, the business can't grow. As a matter of fact, it'll probably decline if a large percentage of your schools have not reopened, and a even larger percentage of schools have called for online learning protocols. So we are going to have a very, very small back to school season.
I do look forward to be a rolling back to school season. In other words, it'll start later because of the unknowns, and because a lot of schools will begin to open as they see if the virus has stabilized in their markets. So I do see some opportunity for the business to pick up in the apparel side of the equation, as we go through the season, but certainly we're having a very late start. I would say that the Walmart and the Targets and others have been cognizant of this issue and challenge, and they have been, I think, very careful in their inventory planning for the season.
BRIAN SOZZI: Janet, it's Brian, and I'm in a pretty good mood here because of that. Give me a winner or two, from them all. Who-- who is going to do somewhat decently or perhaps a little bit better than expected for back to school? To be honest to you, I was surprised at that Skechers' earnings call last night. Their sales seemed to be coming back. Maybe one winner there.
JANET KLOPPENBURG: I-- I think that Skechers is-- it had a great call and have some good opportunity as-- as kids and adults look for more comfort footwear, and I think they are very well positioned. I think Vans is also very, very well positioned, not only from a comfort standpoint, but because of the skateboard trend, and kids now have much more time to be on those boards.
I also think Aerie of American Eagle is very well positioned because their comfort, cozy, active clothes, lounge product, and intimate apparel is very, very applicable for a stay at home. And also for, you know, a casualization approach to maybe two or three days in-- in a classroom and then two or three days at home. So lots of versatility for Aerie.
ALEXIS CHRISTOFOROUS: I want to pivot for a minute and talk about this news we saw break this morning regarding Brooks Brothers. So now you've got the mall owner, Simon Properties and Authentic Brands, making a $305 million bid for I think most if not all of the assets of Brooks Brothers, which filed for bankruptcy recently. What do you think about that marriage there, and-- and might other retailers who have gone bankrupt be able to find interested buyers?
JANET KLOPPENBURG: I-- I think Brooks Brothers is a-- you know, a top five American brand, classic American tailored clothing. A long, long history of serving men and women in a work environment, and I think that they-- the Simons of the world don't want to see a brand like this go by the wayside. They've been supporting a lot of other brands, as you know.
They need this mixed content in their portfolio of stores within the malls and there will be an opportunity for-- for dress clothing to come back. There's also an opportunity for a Brooks Brothers name to extend its leadership beyond dress clothing and to a refined casual look, which still has viability in a post-COVID world.
BRIAN SOZZI: Janet, I know you're plugged into all things Gap. What state-- do you have any insight into their current thinking regarding the Kanye West deal? I'm sure you've been following what Kanye West has been saying on social media and his general activity. Is Gap willing to stick with him through this?
JANET KLOPPENBURG: Brian, can you say that again? I had trouble hearing you-- hearing you. Say that again.
BRIAN SOZZI: Yeah, I know you're plugged into all things Gap here. Is Gap inclined to stick with Kanye West as he deals with whatever he's going through?
JANET KLOPPENBURG: I-- I believe they are. The-- the apparel line which covers men's, women's, and children is not expected to launch until next year. My-- my guess is not before the second quarter, and it was an unusual event, and I think a surprise to the Gap management as well, that's my guess. And I think that by the time the marketing and merchandising of this new product assortment launches that the elections will be long over and that will have quieted down. So I think they'll definitely stick with it.
ALEXIS CHRISTOFOROUS: Janet Kloppenburg of JJK Research. Thanks as always.
JANET KLOPPENBURG: Thanks so much.
ALEXIS CHRISTOFOROUS: Thanks. Have a good weekend.