Yahoo Finance’s Brian Sozzi speaks with Fashion Designer Rebecca Minkoff at the Goldman Sachs Small Business Symposium about what small business owners should focus on and the possibility of a recession impacting designer bag prices.
BRIAN SOZZI: Joining me now is Rebecca Minkoff, founder and chief creative officer of Rebecca Minkoff. Rebecca, good to see you again.
REBECCA MINKOFF: Thanks for having me.
BRIAN SOZZI: This is quite the event here Goldman Sachs put on with small businesses. What are you hearing from the folks at the event?
REBECCA MINKOFF: You know what? Everyone is preparing. Like, we all just got through the pandemic. And it's like, there's a recession? What am I going to do now? And I think it's on everyone's top of mind is, I just got through this. I thought we were in the clear. And here we go again.
BRIAN SOZZI: It's from crisis to crisis, right? That's a good way of putting it. What should a small business owner be doing now?
REBECCA MINKOFF: I think that they should be assessing where they can save money. What is their core business that they can focus on and hone in on? Sometimes it's like a goldfish where everyone wants to have lots of products. What is the thing that everyone's going to need from you when they're saying, do I buy a coffee, or do I get the muffin? And what is that thing that you could provide to them that provides value and really utility for people, especially right now?
BRIAN SOZZI: You're a business owner. What are you seeing in your business in this environment?
REBECCA MINKOFF: So we're seeing a shift away from shoulder bags to cross-bodies. But I think, again, people are asking the question, do I need that $8,000 bag right now? No, now's probably not the right time. Let me invest in a beautiful bag that is-- I can't even do the math-- but less than less than 1/8 of the price, 1/16 of the price, and have something beautiful and still go to the tank and fill up.
BRIAN SOZZI: Does fears of a recession change how you design products?
REBECCA MINKOFF: It just makes me expand the price offering. We've lived through the 2008-2009 recession. How we got through it was we lowered our prices by almost 50%. And so that fundamentally changed our business. So us going through a recession, I'm like, I've been there, done that. I know what to do. Let me make sure that, categorically, I'm covering on people that are being hit hard and how we can provide something really of value to them during this time.
BRIAN SOZZI: That was a tough time, the Great Recession. I certainly lived through it as well. Does it feel like we're in that environment again?
REBECCA MINKOFF: Not yet, but I think the murmuring, the grumblings, I worry it's coming. And I'm hoping that people are preparing for it.
BRIAN SOZZI: People are returning to work. What are they shopping for?
REBECCA MINKOFF: Oh, my gosh. Well, of course, they're shopping for my handbags. But it's been a long time that people were wearing heels. And so I think as they're going back in the office, it's out of the sneakers and back into some beautiful shoes.
BRIAN SOZZI: Colors, are they in?
REBECCA MINKOFF: Colors are very in. I think it's a very easy no-brainer way to show off something that makes people happy. So we do sell a lot of color. Black is still our number one style, though.
BRIAN SOZZI: Black, OK, number one style. Can you get the goods you need? I talk to a lot of retailers. And they have had to just redesign how they make garments because they can't get the supplies that they used to have been able to get to.
REBECCA MINKOFF: Yeah. So we had zero supply chain issues, I was happy to say--
BRIAN SOZZI: Zero?
REBECCA MINKOFF: --until October of last year.
BRIAN SOZZI: Got you.
REBECCA MINKOFF: And then it all fell apart. And we had an incredibly difficult time getting our bags. And so we just had to hold hands with our partners and say, you know what, spring this season, it's going to be summer. Summer is going to be fall. And we're all just going to hold hands and figure it out.
And so I think we have great partners that have been nimble with us, Nordstrom, Saks, Bloomingdale's, Neiman Marcus, they've all worked incredibly hard to deal with not only delays on our end but all designers. And so I think we just take it one day at a time. And what can we get? And where can it go?
BRIAN SOZZI: Does it feel like a very discount-friendly environment right now?
REBECCA MINKOFF: People want discounts, for sure, especially right now. But that's not new. I think when you saw the rise of online sample sales and discounting, that was something that was started that was incredibly hard to go back from. But we've made a very conscious effort to-- yes, we have our sales. They're at certain times of year. And the customer knows when that is. That's very normal for our industry.
BRIAN SOZZI: Your expectations for the holiday season? Retailers are always looking forward to the holidays.
REBECCA MINKOFF: It's going to be a great time. I mean, you see travel is up, right? Way past pre-pandemic levels. And I think the holiday is that time period where certain people were saying, don't travel. Don't see your family. Don't do anything, which was wrong.
And I think you're going to see people say, enough is enough. I'm going to go be with loved ones. I'm going to buy them gifts, maybe be a little bit more thoughtful about how much you're spending. But definitely, I think it's going to be great for retail.
BRIAN SOZZI: All right, we'll leave it there. Rebecca Minkoff, good to see you. Enjoy the rest of this conference. We'll talk to you soon.
REBECCA MINKOFF: Thank you.