And we continue to see this even in recent headlines: Chicago’s Magnificent Mile has regained momentum, Austin & Nashville continue to attract ambitious brand expansions, large format experiential stores remain central to many growth strategies.

What feels notable at this stage is not the comeback itself, but the persistence. Even as consumers become more selective and the broader environment feels uneven, brands continue to invest in physical space.

That persistence made me step back and reconsider a more structural question.

Does owning physical space drive brand equity growth, or does brand equity create the freedom to choose where to own space?

Looking at Nike More Closely

As I explored this idea, I looked up something that genuinely surprised me.

Nike operates roughly 85 full price stores and just over 200 outlet stores in the United States (per Statista). For a brand that feels culturally ubiquitous, that footprint is remarkably concentrated and primarily centered in major metropolitan areas.

And yet Nike’s brand equity extends far beyond those cities.

For decades, much of its distribution flowed through wholesale partnerships, including department stores and sporting goods retailers. These are environments where brands do not fully control the experience.

What makes Nike compelling is that its authority was never confined to owned square footage. It was built through product innovation, athlete endorsement, performance credibility, and cultural alignment. Demand was created upstream and traveled across retail environments.

Nike has long been present nationally and globally. Ownership was layered in selectively.

Ownership as a Lever, Not a Foundation

Nike’s footprint forces a sharper question.

If a brand can build national demand largely through product, culture, and distribution partnerships, what role does owned retail actually play?

Ownership is not just about visibility. It introduces control, immersion, and margin capture. But it may not be the mechanism that creates brand equity in the first place.

In Nike’s case, brand strength was built through performance credibility and cultural authority. Wholesale distribution carried that into nearly every market in the country.

Owned stores then became a lever. They deepened engagement. They amplified innovation. They made the brand more experiential. (Enter House of Innovation!)

But they were not the starting point.

That sequencing matters - it suggests that physical ownership may be most powerful when layered onto an already strong brand foundation.

Rethinking Expansion

Entering new markets is frequently positioned as brand building.

Sometimes it is.

But Nike’s footprint suggests that physical ownership is not always the starting point for equity creation. In some cases, demand exists well before a brand owns a lease in that market.

The more interesting question may be whether the store is introducing the brand, or deepening demand that is already there.

Those are very different strategic positions.

Why This Matters Now

Consumers today are more discerning. Choice is abundant and comparison is immediate. Loyalty is not automatic.

In that environment, brand equity carries weight.

Physical retail can reinforce trust and create memorability in ways digital channels cannot fully replicate. It can make a brand tangible.

But Nike illustrates something important - branding itself begins with product strength and cultural resonance. When that foundation is strong, physical ownership becomes a powerful extension of it.

Ownership does not replace brand strength. It expresses it.

And in a moment where physical retail continues to expand despite a[n allegedly] more cautious consumer backdrop, that sequencing feels worth examining.

Presence builds equity.
Ownership amplifies it.

And the order of these may matter more than the square footage itself.

The assortment was thoughtful. The merchandising was strong. Each brand felt intentional. It wasn’t a negative reaction. If anything, it was energizing. There is clearly no shortage of creativity or ambition entering the market.

But as I walked through the store, I couldn’t stop thinking about a different question.

How many of these brands know what comes next?

Not in the sense of becoming massive or chasing scale for its own sake. Not every brand wants that, and not every brand should. But continuing to exist over time, even at a smaller or more considered level, requires a different kind of work than getting started.

That realization stayed with me.

The Founder-Led Reality

The market today is full of founder-led brands. That’s not a critique. It’s simply true. Many of the most interesting brands are built by people with strong creative instincts and deep product intuition. They know their customer. They know their aesthetic. They know how to get something off the ground.

What many of them don’t have is a background in finance, strategy, or capital markets. They haven’t spent time thinking about capital structure, long-term tradeoffs, or how decisions begin to compound once a business has momentum.

And they shouldn’t have.

That’s not what founders are meant to be good at in the early days.

When the Founder Phase Starts to Stretch

There is a point where the founder-led phase begins to stretch.

The vision still matters. The instinct still matters. But the environment around the business becomes more complex. Decisions last longer. Capital becomes more relevant. The margin for error narrows, even if the brand itself still feels early.

This isn’t always about scale in the traditional sense. Sometimes the trigger is the need for more capital. Sometimes it’s channel expansion or a growing team. Sometimes it’s simply that decisions start to carry consequences that are harder to unwind.

Most founders don’t experience this as a clear transition. There’s no moment where someone tells you that you’ve entered a new chapter. Instead, friction shows up quietly. Progress slows in places that once felt intuitive. Choices feel heavier. The work begins to feel different.

When the Job Changes

I often think about this shift through an unexpected example.

Ryan Serhant has spoken about the moment he realized that after building a highly recognizable real estate brand, his role fundamentally changed. He was no longer spending his days selling. He was hiring. Managing legal. Setting strategy. Building infrastructure.

The work that made him successful was no longer the work the business needed most.

That same dynamic shows up in founder-led brands. Founders do not stop being visionaries, and they shouldn’t. That creative core is the DNA of the brand. But as complexity increases, the business begins to require expertise in areas the founder was never meant to carry alone.

This isn’t about giving up control. It’s about recognizing that the job has changed, even if the title hasn’t.

What Happens Post-Momentum

Thinking about that helped me reframe brands that have been around far longer than we often realize.

Brands like Mansur Gavriel or Cult Gaia didn’t disappear. They didn’t fail. But their trajectories have been slow, uneven, and far from linear. Building something durable takes time, and without the right support at the right moment, it can take even longer.

These brands aren’t cautionary tales. They’re reminders.

Brand building is a long game. Early traction doesn’t map cleanly to long-term outcomes. And the middle chapter, the one after discovery but before durability, is where many brands drift, stall, or simply take years to find their footing.

That’s the part we don’t talk about enough.

What’s The So What Here?

Not every brand wants to be huge.
But the brands that do want to endure face a phase no one prepares them for.

This is the gap I keep noticing. A market full of creative founders and early momentum, but very little infrastructure to help them navigate the moment when intuition alone is no longer enough and new forces quietly enter the picture.

That realization didn’t come from a framework or a trend report. It came from walking through a store full of beautiful brands and wondering how many of them would still be here, and what would determine that.

That question is what I keep coming back to.

This is the phase my work focuses on most. Helping founder-led and growth-stage brands navigate the transition from vision-led building into more complex operating environments, and removing friction when strategy, capital, and long-term decisions begin to matter more.

If you’re interested in learning more, send me a note: kelseymueller110@gmail.com.

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In Part Two, I want to step back and explain why the capital on the other side of the table feels harder right now, and why many founder-led consumer brands feel stuck or misunderstood in fundraising conversations.

What follows in this post is how those shifts actually show up for founder-led consumer brands in practice.

Because the challenge many founders are experiencing isn’t about ambition.

It’s about alignment.

For reference, much of the broader context on venture capital trends I’ve included below comes from recent analysis by Mike Hinckley, drawing on data from Crunchbase, PitchBook, and other private market sources.

Capital Didn’t Disappear. It Became More Disciplined.

Over the last few years, venture capital went through an extreme cycle.

In 2020 and 2021, global VC funding surged to historic levels. Abundant liquidity, stimulus policies, and accelerated digital adoption pushed capital into the market quickly. Valuations expanded, deal cycles shortened, and growth narratives were often rewarded ahead of operating discipline.

That environment corrected sharply.

As interest rates rose and macro uncertainty increased, venture funding declined meaningfully in 2022 and again in 2023. The pullback was especially visible in late-stage rounds, where companies that failed to meet growth or profitability expectations saw enthusiasm cool fastest.

The important point for founders is not the size of the downturn. It’s what replaced it.

Investors shifted toward deeper diligence, stronger unit economics, lower burn rates, and clearer paths to profitability. Capital became more intentional about what kinds of uncertainty it was willing to absorb.

This is what a more disciplined capital environment actually looks like.

What Discipline Means in Practice

Discipline does not mean investors are closed for business.

It means they are less willing to bridge gaps in clarity with optimism.

Today, capital is asking to understand:

• where a brand sits in the market

• how it creates value

• why it deserves to exist at scale

• and whether the founder understands the tradeoffs ahead

That scrutiny flows downstream. And it’s felt most acutely by consumer brands, where brand belief, aesthetics, and narrative do more work early on than spreadsheets alone.

Which leads to the mismatch I’ve been seeing.

The Mismatch for Founder-Led Brands

The challenge for many founders isn’t that they’re at the wrong stage.

It’s that they’re telling the wrong story for the capital they’re actually seeking.

Founders frequently assume that raising capital means sounding institutional. They build full venture-style decks, lead with projections, and try to anticipate every metric an investor might want to see.

At early stages, that instinct often backfires.

When the business is still being proven, capital is not underwriting scale yet. It’s underwriting conviction. Belief in the founder. Belief in the brand idea. Belief that this business has a right to exist.

Trying to tell a later-stage story too early can create friction rather than confidence. It draws attention to what doesn’t exist yet instead of what does. It forces founders to defend numbers they cannot credibly prove, instead of leaning into clarity, judgment, and intent.

This is not a sophistication problem.

It’s a translation problem.

A Step Back: How Funding Actually Works

If you haven’t lived inside capital markets, it’s easy to assume that funding is binary: either bootstrapped or venture-backed.

In reality, most founder-led consumer brands move through several stages, each with different expectations and different listeners.

• Bootstrapped or founder-funded: Early capital comes from the founder, early revenue, or close personal networks. The goal is proof of concept, not scale.

• Friends, family, and angels: This is often the first external capital. Check sizes are smaller. Underwriting is personal. Investors are backing the founder’s judgment and taste more than metrics.

• Strategic or community capital: Some brands raise money from operators, industry insiders, or aligned partners. This capital is often about guidance, credibility, and staying power rather than speed.

• Institutional capital - Seed / Series A: This is where traditional venture capital typically enters. Investors expect clearer economics, evidence of demand, and a credible path to scale. For consumer brands, Series A rounds are often in the low-to-mid single-digit millions, though ranges vary widely by category and model.

• Institutional capital - Series B: By this stage, capital is underwriting whether the business can grow without breaking. The focus shifts to repeatability, operating leverage, and whether early momentum holds up under pressure. Rounds at this stage are typically larger, often in the tens of millions.

• Institutional capital - Series C & beyond: Capital is underwriting durability and risk. Investors are listening for predictability, margin structure, and confidence that the business can support its next phase of scale. Check sizes are larger again, but expectations are materially higher.

For many founder-led consumer brands, especially those built around product, aesthetic, or lifestyle, the first three stages can last years. And that is not a failure. It is often the right path.

The mistake is skipping ahead in the storytelling.

Belief Capital vs. Proof Capital

This distinction matters.

Early capital does not fund proof. It funds belief.

The mistake founders make is asking belief capital to behave like proof capital.

At early stages, investors are listening for:

• clarity of the idea

• depth of conviction

• credibility of judgment

• and an honest understanding of what is known versus what is not

Those are different questions than the ones asked later, when the business is scaled and metrics carry more weight.

When the story matches the stage, capital conversations get easier. When it doesn’t, rejection feels personal even when it’s structural.

Why This Matters More Now

In a more disciplined environment, capital is less forgiving of misalignment.

It doesn’t want louder stories.

It wants stories that hold together under scrutiny.

That’s why clarity, commercial value, and credibility matter so much more than polish. They help investors understand what kind of risk they are actually underwriting.

And they help founders avoid building stories that work against them.

Putting All of This Together…

Capital today is not asking founders to be perfect.

It’s asking them to be precise.

The work is not to sound bigger, more institutional, or further along than you are. The work is to tell the right story for the capital you are actually seeking, at the stage you are actually in.

That’s where alignment begins.

This translation work is something I do with founder-led brands every day.

If this resonates, my inbox is always open: kelseymueller110@gmail.com

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These discussions have moved from what do we want to say to what actually needs to be true.

Founders are no longer asking how to sound compelling. They are asking how to make decisions. What to prioritize. What to cut. What to stop doing. What actually matters when capital is tighter, consumers are more selective, and growth is no longer assumed.

Storytelling has not disappeared. It has become consequential.

This market is forcing clarity not as a creative exercise, but as a strategic one. Brands are being asked to justify their existence with precision rather than aspiration. And for many, that has exposed how much ambiguity had been doing quiet work behind the scenes.

This is the first of a two-part look at what it takes to stand out in this environment. Part One focuses on what founders and operators can control. Part Two will examine how these same dynamics are showing up on the investor side, and why funding has become more disciplined across consumer.

This Is a Hard Market, But Not a Random One

It is true that funding for consumer and apparel brands has slowed. Early and growth-stage capital is more selective, check sizes are smaller, and many funds are prioritizing existing portfolios over new investments.

But what matters more than the slowdown itself is how decisions are being made.

This is not a market where everything has stopped.

It is a market where the tolerance for ambiguity has collapsed.

Brands are no longer being rewarded for broad ambition alone. They are being evaluated on coherence, focus, and whether their strategy actually hangs together under pressure.

Standing out today is not about visibility.

It is about being legible.

The Pattern I See Repeatedly With Founders

When I work with founders, regardless of stage, we almost always come back to the same three requirements. Over time, these conversations have crystallized into a simple but demanding triad:

Clarity. Commercial value. Credibility.

Not as abstract ideas, but as operating realities.

1. Clarity Is Structural, Not Cosmetic

Clarity is often mistaken for branding. In practice, it is much harder than that.

True clarity means being able to answer, consistently and specifically:

• Who this brand is for, and who it is not

• What problem it solves that alternatives do not

• Why this solution needs to exist now

Most brands are not unclear because they lack vision. They are unclear because they are trying to preserve optionality.

Optionality sounds strategic, but it is rarely free.

As brands grow and pressure builds, optionality often gets exercised not from confidence, but from urgency. New categories. New audiences. New use cases layered on top of an already strained core.

What once felt like flexibility can quickly become dilution.

You can see this dynamic play out even in brands that were once held up as models of clarity. Lululemon built its early success on an unusually tight definition of who it was for, what it stood for, and the role it played in customers’ lives. That clarity earned enormous trust and, over time, permission to expand.

As growth has slowed, that optionality has increasingly been exercised outwardly. New categories, new use cases, broader claims about who the brand can serve. None of this is irrational. But it illustrates an important point: optionality exercised to sustain growth reads very differently than optionality earned through conviction. In moments like this, the market becomes less forgiving of expansion that feels additive rather than clarifying.

Case in point that optionality has become expensive. It costs focus, narrative coherence, and internal conviction. And once those begin to erode, belief follows.

Clarity does not guarantee success. But without it, execution efficiency, capital efficiency, and brand coherence all deteriorate.

The brands holding up best are not the ones with the most ideas. They are the ones willing to narrow their aperture and commit.

→ It’s Important to Remember that Repetition Is Not Redundancy

One of the most underestimated disciplines in brand building is repetition.

Founders often assume that once something has been articulated clearly, it has been understood. In reality, people are busy, distracted, and consuming information in fragments.

The strongest brands repeat themselves more than might feel comfortable. Not because they lack creativity, but because consistency is how meaning compounds.

This applies equally to consumer storytelling, investor communication, and internal alignment. Clarity does not come from saying something once. It comes from saying the same thing, the same way, over time.

2. Commercial Value Is Where Strategy Gets Tested

Clarity alone is not enough. It has to translate into something people are willing to pay for repeatedly, without excessive persuasion.

Commercial value shows up when customers return without being reminded, when pricing feels earned rather than explained, and when demand is driven by belief rather than constant intervention.

This is where many brands struggle. The idea may be compelling, but the product does not quite justify the economics. Or the product works, but the story is too broad to create belief at scale.

In practice, this often means making uncomfortable calls. Killing a category that might work. Walking away from a partnership that expands reach but blurs meaning. Delaying growth that looks attractive on a spreadsheet but weakens the core.

In this market, both consumers and investors are asking a more disciplined question:

Is this simply interesting, or is it durable?

3. Credibility Is Built Through Restraint

Credibility is not claimed. It is accumulated.

It shows up in consistency, restraint, and the willingness to grow at a pace the brand can actually support.

Credible brands do fewer things better. They resist the urge to chase every channel or adjacency. They earn trust by demonstrating that they understand their own limits.

In a capital-constrained environment, credibility becomes a proxy for confidence. It signals that a brand is being built with intention rather than desperation.

What This Looks Like in Practice

A handful of recent funding examples help illustrate how clarity, commercial value, and credibility come together in the real world. Not as guarantees of success, but as signals of what the market is currently rewarding.

Skims

Skims raised $225 million in a new funding round just last month (November 2025), valuing the company at approximately $5 billion. It is easy to assume the brand’s success is driven by celebrity association. But the durability of the business comes from coherence. A tightly defined problem, product that consistently delivers on that promise, and a customer who returns because the utility is real. The clarity came first. The scale followed.

Dôen

Dôen announced the closing of its Series A funding round in June 2025, led by growth equity firm Silas Capital. Prior to this round, the brand had raised only approximately $1 million in outside capital while organically building a business generating more than $100 million in annual revenue. That capital efficiency did not come from chasing every opportunity, but from maintaining a disciplined point of view. Dôen has remained focused on a clearly defined aesthetic, customer, and brand ethos, resisting the temptation to overextend before the core was fully proven. The result is a brand that earned credibility first and optionality later.

LYS Beauty

LYS Beauty closed a Series A round in 2024 by anchoring itself around inclusivity and performance rather than trend velocity. In a crowded category, the brand’s clarity around who it serves and why has supported commercial traction without diluting its point of view.

Pickle

Pickle raised a $12 million Series A earlier this year for its peer-to-peer fashion rental platform. The company refined its model over time, ultimately narrowing in on a clear behavioral insight: for a growing segment of consumers, access matters more than ownership. Rather than scaling prematurely, Pickle rebuilt around that insight. The result was a business that became legible, both commercially and to investors, precisely because the use case was no longer unfocused.

Many clear brands will still fail. Execution risk never disappears. But almost no ambiguous brands compound.

What these examples share is not simplicity, but coherence. Clarity working alongside commercial logic and credibility, reinforced over time.

Why This Moment Is Acting as a Filter

It is tempting to describe the current environment as frozen. In reality, it is functioning as a filter.

Brands built on vague positioning, borrowed language, or loosely defined audiences are struggling because the market no longer has patience for unresolved strategy. The brands moving forward are the ones that can articulate their value clearly, deliver on it commercially, and demonstrate discipline in how they grow.

This is not about perfection.

It is about alignment.

Looking Ahead

In Part Two, I will explore why this same framework is now shaping investor behavior. Why funding has slowed broadly, what has changed structurally in capital markets, and how clarity, commercial value, and credibility are being used as filters long before there is enough data to prove the case.

Because in this market, standing out is not about being seen.

It is about being understood.

If you are a founder or operator navigating these tradeoffs, this is the work I do with clients every day: forcing clarity early, pressure-testing commercial logic, and helping teams make the hard calls before the market makes them for you.

If this resonated and you’re working through similar tradeoffs, feel free to reach out:

kelseymueller110@gmail.com

If it makes sense to talk, you can also book time here: Kelsey’s Calendly

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It has become a mainstay in my TikTok feed. Video after video of resale stores in Japan filled with handbags. Not a few carefully curated pieces, but overwhelming amounts of inventory. Chanel. Louis Vuitton. Dior. Hermes. Entire stores packed with bags stacked floor to ceiling.

It is mesmerizing. And hard to comprehend.

Each time I see it, the same questions surface. Where did all of this come from? How is there this much supply? And how does this make sense at a moment when so much of the conversation around luxury is about fatigue, pullback, and rejection?

That tension is what pulled me in.

Not to prove a point, but to better understand what is actually happening inside Japan’s secondhand luxury ecosystem, and what it might reveal about how consumers are engaging with luxury right now.

What I increasingly believe is that Japan is benefiting from something closer to a perfect storm:

• A market that built its resale infrastructure long before global tourism discovered it.

• A culture that normalized secondhand luxury decades ago.

• A regulatory system that enforces trust.

• A weak currency that amplifies value.

• And, at the same time, a luxury industry that, in some cases, has pushed customers away through rising prices and thinning emotional connection.

A market that is visually overwhelming and structurally large

What makes Japan’s resale market even more striking is that the scale is not just visual.

Japan’s secondhand fashion market topped ¥1 trillion, or roughly $6.4 billion, for the first time last year, according to a study by Reuse Economic Journal. Within that, sales of luxury vintage goods grew 16% in 2024.

To put that figure in perspective, it is important to distinguish between annual transaction volume and total market depth.

• The ¥1 trillion figure reflects realized secondhand fashion sales in a single year.

• Broader estimates that include apparel inventory, informal resale, and long-tail transactions place Japan’s secondhand apparel market at a much larger scale, with some projections estimating total market value at roughly $200 billion today and growing meaningfully over the next decade (per Trendscope).

Japan’s distinction is not that its resale market rivals global totals on annual sales alone, but that it has built one of the deepest, most liquid, and most formalized secondhand luxury ecosystems in the world relative to its population.

What shows up on TikTok as endless rows of bags is not an illusion. It reflects real scale, real infrastructure, and real demand.

Some have even begun to describe vintage shopping as a kind of travel ritual, referring to these mementos as the ‘modern-age tourist souvenir’.

Why Japan has so much inventory

The depth of inventory did not happen by accident.

Japan experienced an explosion in luxury consumption during the bubble economy of the mid-1980s through the early 1990s, fueled by cheap credit, rising asset prices, and growing global brand awareness. European luxury brands became deeply embedded in aspiration, particularly among Japanese women.

That legacy still shapes today’s resale market.

Shinya Nagasawa, a professor at Waseda Business School who focuses on design and brand innovation, has pointed to Japan’s unusually deep supply of secondhand designer goods as a distinguishing feature of the market, shaped in large part by the country’s heavy luxury consumption during the bubble economy years.

What happened next is what makes Japan truly unique.

Luxury ownership in Japan has historically emphasized care and preservation. Bags were often used sparingly, stored carefully, and treated as long-term possessions rather than disposable fashion. When they were no longer wanted, they were resold into a formal, regulated system rather than pushed into informal markets.

Just as important, Japan invested early in resale infrastructure. Authentication standards, licensing requirements, professional auctions, and physical resale retail were built long before secondhand luxury became globally fashionable.

This market was built first to serve domestic circulation. The global attention came later.

What Japan effectively offers today is not just resale, but an archive. A version of luxury rooted in history, craft, and continuity rather than constant novelty.

Secondhand regulation in Japan

Another critical reason Japan’s resale market functions at this scale is regulation.

Under Japan’s Secondhand Goods Act, resale dealers are required to obtain police-issued licenses, maintain detailed transaction records, and adhere to strict rules around authenticity. Selling counterfeit goods is not just a reputational risk. It is a criminal offense.

The result is a resale ecosystem built on institutional trust rather than platform promises. Buyers are not relying on a single store’s word or a marketplace guarantee. They are participating in a legally enforced system designed to keep counterfeit goods out of circulation.

That legal backbone is easy to overlook, but it is foundational. Without it, the depth, liquidity, and confidence that define Japan’s secondhand luxury market would be difficult to replicate elsewhere.

The yen still matters, even if the moment has cooled

Currency has played a meaningful role in amplifying demand.

The yen’s sharp depreciation peaked in 2022 and 2023, and while the pace of decline has slowed, it remains historically weak relative to pre-2020 levels. For American buyers, that still translates into a meaningful currency advantage.

Layer that on top of resale pricing, and the perceived value compounds quickly. A bag already priced below current retail can feel dramatically more accessible when purchased in a weaker currency environment.

The arbitrage effect may be stabilizing, but it has not disappeared. And for resale, perception matters almost as much as price.

That said, currency and tourism are cyclical forces, not guarantees, and a sustained shift in either would likely temper the pace of growth rather than dismantle the market entirely.

Only then does the state of the consumer question become interesting

Once you understand the scale, the history, and the pricing, the more interesting question becomes not why this market exists, but why it feels so resonant right now.

There is no shortage of commentary suggesting consumers are fatigued by luxury. Prices have risen. Entry points feel inaccessible. Brand messaging often feels repetitive and disconnected from how people want to engage.

And yet, consumers are still willing to travel to Japan and spend thousands of dollars on handbags.

For brands that have preserved emotional connection, resale can function as an on-ramp. For brands that have diluted it, resale increasingly looks like substitution.

This is where resale often gets mischaracterized. Rather than a rejection of luxury, it increasingly looks like a rejection of how luxury is currently being presented.

The willingness to spend has not disappeared. What has changed is where consumers find emotional alignment.

What this reveals about brand worlds

Resale does not create a brand world in the way modern luxury flagships attempt to. There are no cafes, no immersive installations, no orchestrated storytelling moments.

And yet, consumers are finding meaning there.

That is because resale allows entry into a brand world that already existed. One that feels less commercial, less mass produced, and less optimized for scale. A version of luxury that feels anchored in history rather than constant reinvention.

When someone chooses a vintage bag over a new one, they are not opting out of luxury. They are opting into a version of it that feels more emotionally aligned.

The takeaway here is not that consumers are done spending. It is that spending now requires belief.

As long as that emotional connection exists, whether through heritage, uniqueness, or permanence, consumers will still spend. Japan’s resale market simply makes that reality impossible to ignore.

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That is what continues to fascinate me. The way this brand has woven a world so convincingly that even people who will never buy in still show up for the show.

There are plenty of luxury brands I scroll past without much thought.

A new Vuitton drop might get a glance.

A Dior campaign is usually pretty, but forgettable.

Even brands I genuinely love do not hold my attention the way this one does.

But when Schiaparelli appears on my feed, usually through the Bergdorf Goodman associate, Abygale, or the creative director’s sister, Liz Fox Roseberry, I stop every single time.

Not because I am preparing for a purchase. Not because I am looking for inspiration for my next bag. Not because I am a couture client. Not because I am a fashion insider.

I stop because the world they have built is surreal and imaginative and a little emotional. I want to step inside it for a moment.

I am not engaging as a shopper. I am engaging as a spectator.

And in this moment of consumer behavior, that difference feels important.

A Brand Revived Not For Commerce, But For Culture

Schiaparelli originally closed its doors in 1954. For almost 60 years, the maison didn’t exist in any active way. It was a reference point in fashion history and nothing more.

Then, in 2006, Diego Della Valle, the billionaire behind Tod’s, quietly purchased the rights to the house.

What stands out is not that he bought it. It is why he bought it. His public comments focused on heritage and preservation. He spoke about restoring an important maison to its rightful place in fashion history. He spoke about culture and responsibility.

There was no talk about scale.

No hints at category expansion.

No promises of turning Schiaparelli into the next Dior.

This was cultural stewardship. It was a revival meant to protect something rare and important.

And when you look back at Elsa Schiaparelli herself, it becomes clear why this mattered.

• She invented Shocking Pink, a color that was more statement than shade.

• She collaborated with Salvador Dali on the Lobster Dress, the Shoe Hat, and the Skeleton Dress.

• She pioneered trompe l’oeil knitwear - a technique that creates an optical illusion. Pronounced ‘tromp-loy’, French for ‘to deceive the eye’.

• She treated the runway like theater long before that was common.

• She believed fashion should provoke feeling and humor and curiosity.

Schiaparelli was never meant to be a product-first brand. It was always meant to be a world.

How Schiaparelli Operates Today

Schiaparelli does not operate like most luxury brands.

It survives on a mix of couture commissions, surrealist accessories, private client work, and global visibility. There is no push for mass product adoption. There is no race to open stores. There is no pressure to commercialize every idea.

Couture pieces can run anywhere from $60K-$300K+. These are not products. They are commissions that live in the overlap between art and fashion.

Accessories tell the same story. A tiny pom-pom for a bag is on the website currently for $1,600. A small clutch can reach $8,000, earnings at $3,000.

What is interesting is not the cost. Louis Vuitton, Dior, and Chanel often sit in the same ranges.

What is interesting is the psychology of the price.

Hermes is inaccessible, but familiar. You can name the prices of a Birkin, a Kelly, an Oran sandal. Those items exist on a ladder. You understand where they sit.

Schiaparelli feels like it is on a different planet. I have admittedly never even been on the website (until writing this) because I assumed the prices would either 1) not be posted or 2) be so wildly out of my realm of existence.

And, that is where the difference lies. It is not financial inaccessibility. It is conceptual inaccessibility.

The brand does not invite aspiration. It invites observation.

TikTok And The Psychology Of Watching Other Worlds

This is where the platform itself becomes interesting.

TikTok brings unrelated universes into your daily life, and Schiaparelli is simply one of the worlds that thrives in that environment.

The platform has trained us to watch things that have nothing to do with our own lives: restocking videos. Farm routines. Luxury closets we will never own.

We are not watching because we plan to participate. We are watching because we are curious.

Schiaparelli fits perfectly into this behavior.

It does not feel attainable. It does not feel aspirational. It feels imaginary.

And that is exactly why it holds attention.

TikTok did not make Schiaparelli relevant.

It simply gave people a window into a world they will likely never physically enter.

Why This Brand Keeps Pulling Me Back

I am not a fashion insider, but I love retail and I love brands. I love understanding how consumers think and feel.

Schiaparelli sits at the intersection of all of that.

I do not watch these videos because I want to buy something. I watch them because it makes me feel something.

This is why I keep coming back to the idea that consumers crave worlds, not products. I have written about it often, and Schiaparelli is helping to underscore that point.

The product is almost beside the point.

The world is the thing.

How I Think About This As I Build My Retail Advisory

As I shape my advisory, I keep thinking about the space between what a brand intends and how it is actually received.

Schiaparelli is not a brand most people will (or can) ever buy.

It is a brand they will watch. And that gap between purchase and perception is where meaning lives.

Brands do not exist only in strategies, org charts, or internal documents. They exist in how people encounter them, interpret them, and talk about them, often in spaces the brand does not control.

That is the bridge I care about.

The internal story and the external one.

The business and the belief.

Schiaparelli just happens to be a surreal, sparkly example, but the principle applies everywhere.

Some brands exist to sell. Some exist to scale. Some exist to be everywhere. And some exist to make people feel something when they come across them.

I will never buy Schiaparelli.

But I will always watch it.

And that in itself tells me a lot.

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Consumers are prioritizing the things that make them feel better. Travel. Dining. Hospitality. Wellness. Nature. Fitness. Rituals. Small luxuries that bring comfort. Micro experiences that create joy or connection.

It is not about buying less. It is not about experiences replacing things.

It is about choosing what delivers the highest emotional return.

I was inspired to think about this more deeply for three reasons:

1. A Thanksgiving trip to Vail, Colorado last weekend made this shift unmistakable.

2. McK & BOF recently named the “Wellbeing Era” as one of the defining themes in 2026.

3. Wellness houses keep opening in major cities, signaling something structural in how people want to live and spend.

These threads all points to the same truths: consumers want to feel restored. They want to feel connected. They want to feel alive. And when money is tight or life is stressful, these choices become even more intentional.

A Moment in Vail

The slopes were full. The restaurants were lively. The Four Seasons had its own gravitational pull with its table side hot chocolate, going for an astounding $35 for a single mug.

When you think Vail, you think this makes sense - but upon visual review, there were all kinds of people participating in this hot chocolate bonanza, and the town at large. Not only those with Birkins - a wide mix choosing the same moment.

What stood out even more was what wasn’t busy.

The retail stores nearby were noticeably quieter. Not empty. Just no longer the center of gravity.

And that contrast made something click.

If consumers are already assigning more value to the experience than the store, then the rising price of luxury only sharpens that shift. A $10,000 luxury handbag used to cost $5,000 or $6,000. Prices have nearly doubled since the pandemic.

So for many upper-income households who sit below the ultra-wealthy tier, the calculation becomes much more real.

If a handbag has doubled in price, is the emotional return still there?

Or does the value now sit in the weekend that feels unforgettable?

That is where the two observations meet.

The quiet store and the busy lounge are part of the same story.

Who Is Shaping This Shift

We know from spending data that the top 10% of U.S. households account for roughly half of all consumer spending. These households have more flexibility to participate in the Feel Good Economy regularly. This 10% begins at about $250K HHI annually.

Middle-income households participate more selectively. Lower-income households participate through smaller rituals or specific moments that matter to them.

The goal is not to claim every consumer behaves the same.

The reality is simply that the desire to feel good is shaping behavior across the spectrum, even if the expression looks different.

How We Arrived in the Feel Good Economy

This moment did not appear out of nowhere.

It is the result of several forces coming together at once.

• Years of burnout.

• Financial pressure that forces people to prioritize.

• A desire for presence after a period of collective disruption.

• A longing for connection, grounding, and meaning.

• And rising prices that make people question where their money genuinely feels worth it.

At the same time, wellness infrastructure has expanded dramatically.

Wellness houses are opening in New York, Los Angeles, Austin, Miami, and other cities. They are multi-sensory spaces offering sauna, cold plunge, meditation, community, and recovery under one roof. These houses are not fringe trends. They are physical proof that consumers want environments designed to make them feel good.

McK and BOF capturing the “Wellbeing Era” as a 2026 theme aligns with what we are seeing culturally. The desire to feel better is not a trend. It is a priority.

How Brands are Evolving & Responding

Brands are not only following customers into these environments. They are trying to meet them with meaning. In a Feel Good Economy, consumers expect brands to resonate with them, not simply transact with them. The brands that are winning are transporting customers. They create emotional connection. They build belief. They turn touchpoints into worlds.

This shows up in two ways.

1) Brands are meeting customers where they already are

Sporty and Rich has partnered with luxury hotels in France to create hotel-inspired merchandise. Sweats, caps, and pajamas appear directly in the gift shops of the places where their customers choose to spend their time.

Minnow partnered with Auberge on a winter ski collection that launched in Telluride. The rollout included ice skating, s’mores, and an apres ski activation hosted by the Alpine Swim Club. The experience framed the product.

In the Hamptons this summer, Zimmermann designed the uniforms for the staff at Swifty’s, Doen appeared on the coffee sleeves at Jack’s Stir Brew, and Dolce and Gabbana umbrellas lined the beaches at Gurney’s. Brands are placing themselves inside environments that already hold emotional meaning for consumers.

Recently, Amiri partnered with FC Barcelona as their official fashion brand. Sports culture is one of the strongest emotional arenas in the world. By aligning with something people already feel passionately about, Amiri taps into identity, not just visibility.

2) Brands are creating experiences of their own

Brands are designing spaces and moments that give customers the feeling the product alone cannot provide. They are building meaning, not just merchandise.

Frame’s founder, Erik Torstensson, put it simply: “You need to be in your customer’s life with many touchpoints so you stay top of mind. Otherwise the competition is too tough.”

Golden Goose opened an experiential pop up in Mexico City that blended craftsmanship, customization, music, and local culture. It was not a store. It was a cultural moment that placed the brand inside a city with rising global energy. Another example is Alo, which created clubs that merge wellness, retail, and community.

In other words, retail alone is no longer enough.

These are emotional strategies. They are how brands stay relevant in a Feel Good Economy.

What This All Means

Even when these activations feel niche, they matter. They show how a brand is evolving. They signal that the brand understands where its customer feels good and where culture is moving. Highlighting these efforts externally is not simply marketing. It is a way to show that the brand is keeping pace with the consumer, staying intentional, and remaining maniacally focused on relevance.

In a Feel Good Economy, the brands that win are the ones that help people feel something. These moments and partnerships may seem small, but they are powerful indicators of a brand that understands the assignment.

The product still matters.

But the feeling matters more.

And the brands that understand this are already shaping the next era of consumer culture.

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I originally sat down to write about the resale market. Then I went down a pricing rabbit hole (see my piece from earlier this week here). And somehow, that brought me right back to resale.

Because the more I dug into AUR over the past five years - why brands raised prices, who benefited, who didn’t - the more obvious it became that you can’t understand today’s resale moment without understanding that pricing cycle.

And you can’t understand the pricing cycle without looking at how consumers actually changed.

We hear the same thesis repeated everywhere:

“Luxury is slowing because it priced out its aspirational and younger consumer.”

But when you look at what these consumers actually buy (and what they don’t), the price-driven explanation breaks down immediately.

So let’s walk through exactly where the logic stops holding.

If price were the only explanation, younger consumers would be trading down uniformly across accessible luxury.

And yes, some are.

Coach, for example, is attracting both an increasing number of younger customers because it has rebuilt relevance, not because it’s the cheapest option.

But here’s the key: if affordability were truly driving behavior, we’d see broad, uniform trading down across accessible luxury.

We don’t. Instead, we see selective trading toward meaning.

That’s the real signal.

Once you zoom out and look at where younger consumers are actually spending (and not spending), the price narrative stops holding. And where we start to see some broader contradictions…

Contradiction #1: Chrome Hearts is the top brand on Grailed.

I recently learned this, and it stopped me for a moment.

If the dominant narrative is that the aspirational or younger consumer turned to resale because luxury is too expensive, why is one of the most expensive, niche, subcultural brands the #1 performer on Grailed?

Chrome Hearts is nowhere near affordable. Chrome Hearts is not “accessible luxury.” Chrome Hearts is extremely expensive.

It is:

• identity-coded

• scarcity-driven

• culturally specific

• emotionally loaded

And, it is the top-selling brand on one of the largest resale platforms among younger consumers.

That reality alone dismantles the idea that young or aspirational customers are simply seeking “luxury for less.”

Instead, they’re hunting for meaning. Identity is winning over price every time - and Chrome Hearts is proof.

Contradiction #2: Brands like Miu Miu are growing among younger consumers…at $500+ entry price points.

If younger consumers were truly acting out of price sensitivity, they would not be spending:

• $700+ on ballet flats

• $500+ on minis and socks

• $400+ on basic logo knits

And they certainly wouldn’t be making Miu Miu one of the most culturally powerful brands of the moment.

But they are.

The reason is simple: Miu Miu sells relevance, not affordability.

The product itself is incredibly simple - arguably basic. Yet it carries meaning.

This is the core of the shift: younger consumers don’t buy based on how complex or accessible an item is. They buy based on whether it reflects them.

Contradiction #3: Brands like Burberry and Gucci still offer accessible entry points, and are still losing to the younger consumer.

This is where the “priced out” narrative breaks most clearly.

Burberry still offers SLGs at reachable price points, scarves, belts, footwear, etc. Similar to Gucci.

So the barrier isn’t price. If it were, these entry points would be enough to capture the aspirational consumer.

Accessible price points don’t matter if the product story doesn’t resonate with consumers.

What The RealReal reveals (and what it doesn’t).

In a recent BoF interview, The RealReal’s CEO shared some important factoids.

Here’s what actually matters:

1. The items that move fastest are mid- to high-value pieces.

• Not the bargains. Not the cheap flips. Not the “accessible” items.

• This means resale demand is not bargain-driven. It is meaning-driven.

2. The RealReal wins on pieces people can’t find anywhere else.

• Scarcity, nostalgia, and cultural value outperform price every time.

3. TRR pulled back from low-value items because demand was weak.

If resale were primarily about saving money, those items would be strongest. They aren’t.

Resale isn’t a cheaper alternative to luxury. It’s a more relevant alternative to luxury.

The RealReal’s data makes something clear: consumers aren’t turning to resale because it’s cheaper. They’re turning to resale because it’s where the culturally relevant pieces live. If this were about affordability, low-value items would be the strongest sellers. Instead, the fastest-moving pieces are the ones with identity, scarcity, and meaning. Resale isn’t a discount channel. It’s a relevance channel.

Bringing this together: the narrative about price is convenient, but incomplete.

The easy storyline is:

“Luxury slowed because pricing went too far.”

But when you look at actual behavior, the slowdown maps more closely to:

• a relevance gap

• a lack of innovation

• brands losing cultural clarity

• consumers shifting toward items that mean something

• and younger shoppers choosing identity-driven brands across price tiers

This is why:

• Chrome Hearts wins at high prices

• Miu Miu wins at high prices

• Burberry and Gucci stagnate even with accessible price points

• Coach succeeds because it rebuilt meaning

• TRR moves mid and high-value pieces fastest

Price didn’t create these outcomes. Meaning did.

So is resale cannibalizing luxury? No.

Luxury created the conditions for resale to thrive.

Resale didn’t take luxury’s customer. Luxury lost that customer, and resale became the place where the consumer could find identity, rarity, nostalgia, personal narrative, aesthetic alignment and/or cultural relevance.

Younger and aspirational consumers didn’t leave because prices went up.

They left because brands stopped speaking to them.

Resale simply filled the gap.

Resale isn’t winning because it’s cheaper. Resale is winning because luxury stopped evolving, and consumers followed the meaning.

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How did what felt like every major brand across retail raise AUR at the same time?

He kept pressing:

• How do companies monitor the consumer response to a price increase?

• How do brands know when they are getting close to the ceiling

• Why did the market felt so confident taking AUR when the broader consumer was clearly pressured?

• What was the actual catalyst was that set off this wave of price changes across the industry?

I started to wonder what the question behind all of his questions really was.

And it forced me to step back and think about the retail space since the pandemic.

What exactly happened that allowed so many brands to take pricing in unison…and why did it happen when it did?

From 2020 to 2023, the Market Was Defined by AUR

From 2020 through 2023, the retail industry experienced a historic surge in AUR. Handbags, apparel, footwear, accessories. It did not matter whether a brand sat in premium, accessible luxury, or the top end of the market. Everyone moved. Some brands raised prices multiple times a year. Others took double digit increases. And it all happened in the same window.

The timing was too aligned to be random.

But it was also not only a luxury story. Pricing moved across the entire retail landscape.

This was the defining feature of the last cycle.

Pricing became the primary engine of growth in a way the sector had not seen before.

Pricing Before the Pandemic

To understand what changed, it helps to step back to the pre-2020 environment.

Pricing increases were steady and incremental.

Discounting was widespread across the industry.

Consumers were trained to wait for promotions.

Many brands relied on outlets or off-price partners to clear inventory.

Entry price points were protected because they were viewed as essential to keeping the funnel open.

And the boundaries between premium and luxury were more intact.

In other words, AUR was not a headline metric. It was more of a maintenance lever.

This is why the rapid acceleration in 2020 and beyond felt so dramatic.

The Inflection Point: Why the Pandemic Became the Catalyst

It might seem counterintuitive that a global crisis was the moment when pricing power accelerated. But several forces converged that made this window a perfect catalyst.

1. High income demand did not collapse.
   It re-routed. Travel stopped. Experiences stopped. Spending moved toward tangible goods. Elasticity temporarily weakened, and many brands saw strong full price sell through even during a period of uncertainty.

2. Inventory evaporated almost overnight.

   Store closures. Factory shutdowns. Production delays. Material shortages. Brands were simply not receiving the inventory they planned for. With fewer deliveries and far less excess product, the usual promotional calendar fell apart. Consumers could not wait for discounts because the products they wanted were no longer sitting in back rooms waiting to be marked down. The fear of missing out replaced the expectation of promotions.

3. Supply chain constraints drove real cost pressure.

   Freight, labor, materials, and lead times all went up. Brands faced pressure to protect margins. The consumer also understood that costs were rising everywhere, which reduced the likelihood of backlash. Price increases felt justified rather than opportunistic.

4. The mid tier weakened in a structural way.

   Years of promotions and brand dilution eroded its role as an aspirational alternative, long before the pandemic began. This did not influence luxury pricing decisions directly, but it shaped consumer behavior. When luxury raised prices, the traditional trade down path into the mid-tier no longer felt compelling. That reduced substitution risk and made the industry-wide AUR increases easier for consumers to absorb.

5. Competitive visibility increased.

   Anything that happened at a major luxury brand was immediately posted, screenshot, and discussed online. When one brand raised prices, consumers shared it within hours. That created a sense of industrywide permission. If one player moved, others could follow without creating friction.

Combined, these forces created a window where almost everyone realized they had room to take AUR. And because the consumer tolerated it, pricing became the growth story of the period.

The Strategic Reset: How Pricing Reframed the Customer Base

Here is where this becomes interesting.

Luxury houses were not simply raising prices for margin. Perhaps, they were trying to reshape who their core customer was. Price became a way to refine the customer file upward. The lowest tier of the buyer base, often driven by more transactional, lower AUR or logo oriented purchases, gradually fell away.

What is important is that this did not alienate the true core customer. High lifetime value clients continued to buy. Repeat behavior held up. And pricing even reinforced their sense of exclusivity. The industry keeps talking about pricing out the aspirational buyer. But there has been little indication that these brands are worried about bringing that group back. Their focus continues to be on product newness and brand heat, not on restoring accessibility.

For brands lower on the spectrum, the dynamic played out differently. Some saw an opportunity to raise prices simply because the environment allowed it. But those moves were less about redefining the customer and more about capitalizing on demand. In a few cases, pricing overshot what the core customer could absorb. Michael Kors is the clearest example. They have openly recognized that they stretched too far, specifically in the retail channel, and are now resetting.

The difference is intent.

Top tier brands used pricing as a strategic reset; mid tier brands used pricing as a cyclical opportunity.

Why Investors Fixate on How Brands Monitor the Reaction to Pricing

When investors push to understand how brands track the impact of price changes, it is not because they want to see dashboards. It is because they are trying to distinguish between brands with real, structural pricing power and brands that benefited from a temporary environment.

Monitoring the reaction to pricing is the diagnostic.

It shows who can keep climbing, who is close to the ceiling, and who needs a new growth engine.

But there is a second layer that brings us to the present moment.

Over the past several quarters, we have heard a lot about a slowdown in parts of the luxury market, and it has been widely blamed on brands taking prices too far. That explanation is convenient, but it is not supported by what we are seeing across the sector. Some brands that raised prices aggressively are still reporting strong momentum. Richemont is putting up double-digit organic growth. Miu Miu is surging. Hermès continues to outperform. These companies all took pricing, yet their core consumers have not pulled back.

Which suggests that the recent slowdown at other brands is not primarily a pricing issue. It is a relevance issue. It is an innovation issue. It is a product and storytelling issue. These brands have lost some connection with the consumer and have not kept pace with the cultural or creative momentum of the leaders.

Pricing did not push their core customers away. A lack of heat did.

Investors focus on consumer reaction to pricing because it reveals who has true pricing power, but it also reveals something else. It shows which brands are maintaining relevance regardless of price and which ones are leaning too heavily on AUR instead of building the next engine.

The Playbook Beyond Pricing

The last cycle was defined by price led growth. The next cycle will require something different.

Brands will need engines like product innovation, category expansion, tighter distribution, experiential retail, a clearer point of view in storytelling, creator and culture alignment, and margin structure improvements that are not reliant on AUR.

Some brands already have these engines. Others are trying to build them. But the next phase will be defined by which brands can generate growth without relying on price.

This is the heart of the investor’s question.

Who has a playbook beyond pricing.

The Pricing Window Is Closing

The pandemic did not create pricing power. It created a unique set of conditions that made price increases possible, and in many cases necessary. But now, four to five years into this shift, it helps to step back and look at the full picture. What seemed like a collection of isolated price moves was actually a coordinated moment where consumer behavior, supply chain pressure, weakened mid tier competition, and unprecedented transparency all aligned.

Pricing defined the post-pandemic years.

The next few years will look different.

None of this is new information on its own. But viewed holistically, it becomes clear how the industry arrived here, which dynamics still hold, and which brands have the strength to grow in a world where AUR can no longer do all the heavy lifting.

And that is what matters now.

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Today a customer can meet your brand in a hundred different places.

But there’s still a single moment when all of that gets validated in real life, and that moment comes down to culture.

And here’s what feels important to clarify up front: I’ve always understood the importance of stores and store associates. Anyone who has ever worked in retail understands that stores are the business. But what’s coming together for me lately is how the entire system around stores has changed, and how the associate’s role has expanded in a very real way.

We’ve entered a moment where customers “meet” your brand everywhere, long before they walk into your store. And that changes everything.

The Customer Journey Has Completely Changed

The podcast I listened to said something simple but true: marketing still matters, but it’s no longer the starting point.

Today, customers preview your brand across countless touchpoints, such as:

• a TikTok from a creator you paid

• a TikTok from someone you didn’t

• a resale listing

• an outlet haul

• a friend’s bag

• a mall storefront

• a podcast mention

• an unboxing

• a creator’s “what’s in my bag”

• a reel that went viral overnight

Customers come into the store with expectations already formed.

They’ve already seen your positioning, your packaging, your influencers, your styling, your brand world.

And you only get one shot to meet or exceed that expectation.

If the store experience doesn’t match what they’ve already seen elsewhere, most customers don’t give it a second chance. It’s too easy to move on. There are too many other options.

I’m one of those customers.

There’s an athleisure brand I won’t name, but I kept seeing it everywhere on social media. The content was great. The product looked amazing. It made me curious enough to go see it for myself. But the moment I walked into the store, everything changed. The quality felt different than what I expected, the store was overwhelming, and the energy was off. And that was enough for me. I haven’t gone back.

That’s the reality of modern retail.

A single in-store experience can override months of digital storytelling.

Store Associates Were Always Important, but Their Role Has Expanded

This is the part that’s shifted for me.

Store associates have always been essential. I’ve never believed otherwise. But today, they carry a very different level of responsibility.

They’re not introducing customers to the brand for the first time.

They’re confirming the brand the customer already thinks they know.

They’re validating:

• the brand voice customers have heard online

• the product quality customers assume is real

• the tone, energy, and values customers were promised

• the world customers have already entered digitally

And that’s a much bigger lift than it was ten or fifteen years ago.

It’s also why I think so often about my summer internship at AutoZone. Their HQ in Memphis was called the ‘Store Support Center’, not ‘Corporate Headquarters’. That has stuck with me ever since. It’s a simple phrase, but it says everything about who actually runs the business.

And let’s be honest, stores still drive more sales than digital in most categories. The transaction still happens on the store floor. The associate is still the one who closes. The store is still where everything becomes real.

The Internal Flywheel: Slow to Build, Powerful Once It Starts

What I keep coming back to is this internal flywheel — the alignment between leadership, teams, and stores.

It takes time to build. There’s no shortcut.

No rebrand can create it.

No campaign can manufacture it.

But once it’s moving, it feeds itself.

When leaders show up internally and externally with clarity and pride, teams feel that energy. When teams feel that energy, associates reflect it on the floor. When associates reflect it, customers feel it instantly. When customers feel it, they respond. And their response reinforces the internal confidence that keeps the whole cycle turning.

It’s slow at first, but once the flywheel catches momentum, you can feel it in everything.

The Social Media Layer: Why Platforms Like LinkedIn Matter Now

This is where things feel dramatically different from the retail world of even a few years ago.

Social media, especially personal LinkedIn profiles and Instagram accounts, has become a new internal communication system. It’s changing how culture spreads inside organizations.

Ten years ago, employees mostly heard from leaders through Town Halls or formal announcements. Today, a single post from a CEO or a head of retail reaches thousands of associates instantly. A post celebrating a store, a team member, a product, or a milestone is now something the entire organization can see in real time.

And it creates its own flywheel.

I’ve seen some brand leadership teams orchestrate this very well:

• The CEO posts.

• The head of North America posts.

• The CMO posts.

• The head of visual merchandising posts.

• Often times, you see those leaders get invited to conferences, panels, podcasts, and industry conversations from the content they’re putting out. Suddenly the entire leadership team becomes a visible part of the industry’s dialogue.

And inside the company, employees see that.

They see their leaders out there…the pride, the momentum.

It becomes exciting, energizing — a rally cry, if you will. And, something that employees want to be part of.

That’s how social media turns from a communication tool into a cultural flywheel.

AI: The Tool That Changes Everything Except the Human Part

We’re also in a moment where everyone keeps asking what happens to brands as AI becomes more capable.

AI will change a lot of things within the retail world, there is no doubt.

But there are limits.

AI can’t create pride. It can’t energize a store team. It can’t make someone believe in the product they’re selling. It can’t build internal momentum. It can’t make a store feel inviting or magnetic.

And it definitely can’t replace the feeling customers get when an associate genuinely represents the brand.

AI will make retail more efficient, but culture will continue to be the differentiator.

Final Thoughts

What’s interesting to me is how all of this connects: the nonlinear customer journey, the expanded role of the associate, leadership visibility, internal energy, and even the influence of platforms like LinkedIn.

It’s not new that stores matter.

It’s that everything leading up to the store has changed.

Customers arrive with expectations already shaped by everything they’ve seen online.

Associates are now responsible for translating and validating all of it.

And leaders shape the internal momentum that makes this possible.

The brands that understand these connections — and build their culture around them — are the ones that feel alive. The ones customers trust. The ones that earn loyalty in a world where most brands don’t get a second chance.

I’ve been convinced that culture isn’t a slogan.

It’s the experience that ties everything together.

And in this moment in retail, it might be the most important advantage brands have left.

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I kept seeing strong results from retail brands in the US, especially those with high AURs.

Richemont reported growth of 20% in the Americas. Burberry noted improving momentum. LVMH flagged stabilization. And brands like Coach and The RealReal, sitting below true luxury in price point, also posted double-digit growth in North America.

These brands serve different customers, but all of them are telling the same story: their U.S. customer is showing up.

At the same time, every news headline suggests the opposite. Retail stocks sell off on concerns about the consumer. Economists warn about slowdown risks. Consumer sentiment charts fall to multi-year lows.

Where’s the disconnect here?

So, I pulled the data. I charted consumer sentiment against retail sales (ex-auto). I dug through research from Bank of America Institute, Fortune, Morgan Stanley, the Fed, Brookings, and the University of Michigan. And the more I read, the clearer it became:

The U.S. consumer is not one consumer anymore.

There are two economies operating at the same time.

Understanding that split is the only way to make sense of the contradictions showing up in retail.

The Data Doesn’t Match the Narrative

When I plotted consumer sentiment next to retail sales growth, there was almost no correlation. Sentiment has been stuck near multi-year lows since 2020. Retail spending, however, has continued to grow. Of course, most notably among higher-income households.

This alone tells us something important: sentiment no longer predicts behavior.

Before the pandemic, consumer sentiment acted as a rough leading indicator. If people felt bad, they tended to tighten spending. But over the last four years, sentiment has become more of a mood barometer than a behavioral signal.

People feel weighed down by prices, politics, uncertainty, and the general heaviness of the post-pandemic world. But behavior/what people actually do with their money tells a completely different story.

This is the root of the conundrum.

Sentiment Is Emotion. Spending Is Behavior.

Economists at Brookings and the University of Michigan have noted that consumer sentiment has increasingly become an expression of frustration rather than a reflection of financial reality. According to multiple Bank of America Institute Consumer Checkpoint reports throughout 2024 and 2025, U.S. households, especially in higher-income cohorts, continue to save, spend, and pay down credit-card balances at levels that exceed the pre-pandemic period.

In other words, the consumer feels worse than they behave.

Sentiment surveys reflect mood.

Spending data reflects action.

The two point to different realities because they are capturing different groups.

Why Sentiment Hasn’t Recovered Since 2020

As I looked at the line charts, I realized something surprising: consumer sentiment hasn’t meaningfully improved since the early pandemic, despite strong wage growth, low unemployment, and repeated stock market highs.

Why?

Because most of the pain people feel today isn’t about macro conditions. It’s about daily financial life.

→ Prices didn’t come back down: inflation cooled, but the price hikes stayed. Grocery bills, rent, insurance…none of it returned to 2019 levels.

→ Housing affordability has collapsed: this is one of the biggest psychological hits to middle-class sentiment.

→ Emotional fatigue is real: post-2020 uncertainty, constant news cycle negativity, and political stress weigh heavily on sentiment surveys.

→ The broad population doesn’t feel the stock-market rally: this is an important one. Wealthier households are the ones feeling this…and this is the bridge that brings us to the real heart of the story: the K-shaped economy.

The K-Shaped Consumer: Two Economies Inside One

Once you see the gap between sentiment and spending, the next layer becomes impossible to ignore: the U.S. consumer is now K-shaped.

Two sets of households are living in the same economy but experiencing it in completely different ways.

The Top of the K:

These are the households with wealth tied to the stock market and the financial capacity to spend on discretionary categories. They are driving the strength we see in retail, across luxury, premium accessories, travel, wellness and beauty.

According to Bank of America Institute and analysis from Morgan Stanley:

• The top 20 percent of households account for nearly half of all discretionary spending in the United States

• The top 40 percent account for roughly 60 percent of total consumer spending and control almost 85 percent of national wealth. Two-thirds of that wealth is tied to the stock market, which has climbed nearly 90 percent in the last three years.

• Morgan Stanley’s Lisa Shalett notes that spending among these households is growing six to seven times faster than among the lowest-income cohort.

These are not the households expressing distress in sentiment surveys.

The Bottom of the K:

This group is facing a very different reality. They are:

• cutting back on fast food

• visiting restaurants less

• trading down to lower-cost brands

• shifting toward essentials

• constrained by rent and insurance

This consumer is the source of the negativity captured in sentiment surveys. This consumer shows up in headlines about slowdown risk. This consumer is struggling.

Both realities are true at the same time. Both are happening today. And both are shaping the economy.

Consumer sentiment surveys capture how the broad population feels.

But the broad population is weighted heavily toward lower and middle-income households, not the higher income cohort.

We are not seeing a weakening consumer. We are seeing two consumers on diverging paths.

So… Why Do All Retail Stocks Trade Down Together?

Despite all of this complexity, the market trades retail as a single block.

In moments of macro fear, the entire sector moves together. Louis Vuitton, Old Navy, Richemont, Gap, Target and Cartier all trade in the same direction, even though they serve fundamentally different customers.

Investors react to the headline consumer narrative, not the segmented consumer reality.

This is where consumer sentiment data becomes misleading.

Sentiment reflects the lower arm of the K. Spending reflects the upper arm. When investors do not distinguish between these groups, they misread the entire sector.

Does Consumer Sentiment Even Matter Anymore?

Not in the way it used to.

It once served as a useful leading indicator. Today, it captures frustration rather than spending potential.

For brands and investors, the better signals are:

• category-level spending

• income segmentation

• pricing power

• brand connection

• emotional ROI categories

• traffic and frequency

• wealth effects

• mix shifts

These indicate where the consumer is actually moving.

The Most Important Question Is No Longer “How Is the Consumer?”

It Is “Which Consumer Drives Your Business?”

The U.S. consumer is not weakening in one direction. The consumer is diverging.

As this split becomes more pronounced, the frameworks we use to evaluate retail need to change with it.

Sentiment remains a useful indicator, but only when paired with income tiers, category behavior, wealth effects and how different households participate in the economy. Retail is no longer one story. It is multiple stories running in parallel.

Understanding that layered picture is the only way to read the sector with clarity today.

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• It overwhelms employees internally, who feel the pressure to innovate but aren’t sure where to start.

• It overwhelms investors externally, who don’t yet know how to evaluate what “using AI” really means.

• And it overwhelms customers, who keep hearing about a revolution but just want to know what it means for how they actually shop.

Yes, AI is changing retail. But not in a single dramatic leap.

The shifts are real, and they’re happening faster than many expected, just not in the all-consuming way the headlines suggest. The opportunity for brands is to understand where those shifts are actually being felt and to communicate them clearly, both inside and outside the company.

Let’s talk about what’s actually happening right now.

How the shopping process is evolving

Discovery is becoming a conversation.

• The shopping journey no longer starts with a few keywords in a search bar. Increasingly, it begins with a question: “What’s the best option for me?” “What should I buy for a friend who runs every day?” This evolving discovery world is conversational, not transactional.

• That means product data and content now need to be written for clarity and empathy, comparable to how a knowledgeable store associate would explain it to a customer. If AI tools are going to respond to real, two-sided questions, brands have to prepare the information that powers those tools in a way that sounds human, not mechanical. The clearer and more natural the data, the better those assistants can represent the brand in conversation.

Decision-making is compressing.

• AI review summaries, fit guidance, and compatibility checks are quietly collapsing the middle of the decision-making funnel. Shoppers are spending less time toggling between tabs, ordering multiple sizes “just in case,” or texting friends for advice. The friction that once required a customer service email or store visit is disappearing.

• AI is helping people reach confident decisions faster. Not by replacing human judgment, but by reducing the noise that used to slow it down.

Confidence is the new conversion lever.

• Virtual try-on and fit assistants are moving beyond novelty. When executed well, they directly improve confidence to purchase and reduce returns. Ulta’s GLAMlab and Google’s try-on for apparel are proof that shoppers want help visualizing before they buy. When done right, these tools create a real financial impact, not just a fun talking point.

Post-purchase is becoming more human by being less manual.

• Customer service is quietly becoming faster and more personalized. Klarna’s AI assistant now handles the majority of chats in minutes, routing complex issues straight to human experts. The best part is that this efficiency actually makes the experience feel more human, because employees can focus their energy on real problem-solving instead of repetitive questions.

So yes, AI is absolutely changing how we shop. It’s just doing it in ways that are more incremental than revolutionary.

We’ve been here before

It’s not the first time a big technology wave has been framed as the end of how retail operates. Each time, a specific part of the model, whether it be stores, checkout, or supply chain, was supposed to vanish. Instead, it evolved.

→ When e-commerce arrived, the story was “stores are dead.” Two decades later, physical retail still accounts for a larger penetration of sales relative to digital.

→ When mobile shopping took off, we heard “everyone will now buy everything on their phones.” It did, eventually, but only after checkout flows, UX, and confidence caught up.

→ When the DTC boom hit, the message was “wholesale is over.” Today, the most successful brands do both.

The pattern is consistent. Headlines sprint. Operations jog. The companies that win are the ones that focus on what customers actually feel, fix what’s broken, and measure progress in real terms.

So what does this mean for brands and investors?

For brands, it means being informed without being reactionary or performative.

The goal isn’t to be first; it’s to be relevant. No one expects a complete AI transformation by next quarter, but investors and consumers alike want to see that you’re aware of the shifts happening in the market and that your business is thoughtfully evolving.

Right now, investor questions about AI are still basic.

• The ones I’ve heard usually sound something like: “Are you using AI in your business?”

That’s not because investors don’t care; it’s because they don’t yet know how to evaluate it. They’re in the same learning phase everyone else is.

The smartest brands are answering those questions with simplicity and proof points, not buzzwords. For example:

“We’re continuing to explore where AI makes sense for our business. Right now, we’re using it to make our product catalog easier for assistants to understand, so customers can find what they want faster. We’re also testing fit guidance tools in a few key categories where returns are highest. Early results show shorter decision times and fewer size-related returns.”

That kind of answer works because it balances curiosity with accountability. It acknowledges experimentation but pairs it with measurable impact.

Who’s framing the AI story well

These brands aren’t over-promising transformation. They’re showing how AI fits into the story they’re already telling.

• Walmart is leading with functionality, not flash. Its partnership with OpenAI makes shopping via ChatGPT feel practical rather than experimental, emphasizing convenience and conversion rather than futuristic hype.

• Best Buy frames AI around service outcomes. Their messaging centers on resolution times, satisfaction scores, and routing accuracy, highlighting proof that efficiency and empathy can coexist.

• Ulta Beauty continues to use AI in ways that align with its brand. GLAMlab’s virtual try-on tools make beauty more inclusive and confidence-driven. The story stays emotional, not technical.

• Starbucks talks about “Deep Brew,” an AI platform that supports baristas instead of replacing them. Their message is clear: technology helps us deliver more human experiences, not fewer.

The takeaway

AI is changing retail, but not in one grand reveal. It’s unfolding in small, tangible ways, the kinds that customers might not notice individually but will soon expect as standard.

For now, the most important thing a brand can do is stay present in the conversation. Understand what’s shifting. Be able to articulate why you’re experimenting where you are.

And remember that credibility compounds. The brands that will win this next chapter aren’t the ones shouting about disruption; they’re the ones communicating change clearly, calmly, and with purpose.

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My retail advisory firm helps lifestyle and consumer brands bridge the gap: translating brand storytelling into investor confidence. Through the Investor Lens Diagnostic, a focused five-day sprint, we pressure-test your narrative, align your data, and turn meaning into measurable momentum.

Interested in learning more or discussing your brand’s goals? Send me a message — let’s build your investor story.

Today’s Q2 call leaned heavily on optimism, layered metrics, and “green shoots.” There were so many numbers and sub-narratives that it became hard to follow what actually mattered, a point underscored during Bernstein’s question, which tried to untangle the multiple strands of Capri’s top-line story.

The company continues to sound confident. The question is whether the results support that tone.

Here are a few of my observations from today:

1. The $1 Billion Share Repurchase

Capri announced a $1 billion share repurchase program set to begin in Fiscal 2027 (just two quarters from now, once the Versace sale closes).

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They were expensive to build, impossible to measure, and often defended with vague references to “brand visibility.” Even New York’s 5th Avenue, which was once the ultimate retail address, started to feel like a monument to a different era, more billboard than business case.

The old flagship was built for visibility, a stage meant to be seen. The new flagship is built for resonance, a place where people connect rather than pass by.

That shift is reshaping what retail space is for. People no longer want ‘just’ transactions; they want authentic interactions. They want to feel a connection to something real.

Earlier this week, I was in Mexico City and walked into the Golden Goose HAUS in the Roma Norte neighborhood, and that shift was unmistakable.

At first glance, it’s everything you’d expect from the Italian label: distressed leather, signature stars, confident ease.

Walk further into this concept store, and you’ll quickly realize it’s not just retail theater. It’s a space that feels personal and intimate, more like someone’s actual home than a store — like the lived-in master bedroom shot above, curated with ready-to-wear and handbag pieces.

Golden Goose describes HAUS as a space that “welcomes a community of dreamers,” with the idea being not to only showcase product, but to create belonging within its community. Each room feels lived in, filled with warmth and small imperfections that make it human. The brand has created an environment where its values of family, love, and togetherness exist in physical form.

It is not a store built to sell. It is a home built to authentically engage with consumers.

The Flagship, Rewritten

Concept stores like this are the evolution of the flagship.

Where traditional flagships once stood as symbols of scale and aspiration, their modern counterparts serve as symbols of identity.

They are smaller, more intentional, and rooted in place. They act as community spaces rather than retail showrooms, trading volume for depth.

The old flagship was built for visibility, becoming a billboard in physical form. The new flagship is built for resonance, a place where people connect rather than pass by.

For decades, a prime 5th Avenue address was the ultimate measure of brand strength. Today, location has been replaced by emotion. The most valuable retail spaces aren’t the most visible, they’re the most authentic.

So What Does This Look Like in Practice? Enter Coach.

A brand that’s doing this especially well? Coach. (Though I acknowledge I might have some bias after spending the majority of my career there.)

Coach has been building the same idea of authentic connection, including through its Coach Play and Coach Café experiences around the world.

At Coach Café in Singapore, visitors can sit for coffee under the brand’s signature horse and carriage, surrounded by details that merge New York nostalgia with local charm. The experience invites guests to spend time with the brand rather than simply shop it.

The Coach Play series takes that even further, blending the house’s New York heritage with each city’s unique personality. The brand describes it as engaging all five senses to create moments rooted in discovery and self-expression.

This approach speaks to how customer expectations have evolved. People no longer want to only transact; they want authentic interactions. They want to feel a connection to something real.

Coach and Golden Goose are chasing the same outcome: a physical representation of emotional truth.

Why It Matters

Concept stores are expensive, and for investors focused on measurable returns, that can be a hard line item to justify. The question often sounds something like: Why are we spending this much on what looks like a vanity project? How do we know it’s working?

Those are fair questions. The challenge is that the traditional metrics, such as sales per square foot, traffic counts, conversion, don’t tell the full story anymore.

For brands, the value of these spaces lies in how they shape perception, deepen connection, and signal long-term direction. But when that story doesn’t translate clearly to investors, the gap between intention and interpretation grows wider.

Bridging that conversation is what matters most. The brands that can articulate not just what they’re building, but why it builds value, are the ones that earn both consumer loyalty and investor confidence.

Flagships didn’t disappear; they evolved. They stopped shouting scale and started speaking meaning. They found new life as homes, cafés, and cultural spaces that connect people to purpose.

And in a market where connection has become currency, that translation might be the most important return of all.

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My retail advisory firm helps lifestyle and consumer brands bridge the gap: translating brand storytelling into investor confidence. Through the Investor Lens Diagnostic, a focused five-day sprint, we pressure-test your narrative, align your data, and turn meaning into measurable momentum.

Interested in learning more or discussing your brand’s goals? Send me a message or schedule a 30-minute introductory session below. Let’s build your investor story.

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The truth is, most early or growth-stage brands don’t know what they don’t know when it comes to metrics. They measure success through consumer love, not investor logic. Which makes perfect sense… until it doesn’t.

Because in the beginning, the story can absolutely sell. It did for Glossier.

The Disconnect

Founders talk about community growth, sellouts, waitlists, and brand heat.

Investors ask about repeat rates, contribution margin, and retention by cohort.

Neither side is wrong, but they’re operating on completely different definitions of traction. (Check out my recent post on decoding the investor signals brands care about for more on this translation challenge.)

When a brand is still proving product-market fit, things like social growth or sell-through are valid proof points. But once investors enter the chat, the definition of success shifts.

It’s no longer about do people love it? It’s can you scale it without breaking? Show me how these metrics show viability of long-term growth and profitability?

When Vision Outgrows Structure

Founders who build beloved brands often do it by instinct. They have taste, conviction, and an eye for opportunity. But when a brand scales beyond its founder’s personal touch, things can get messy fast if there isn’t a strong strategic or financial advisory layer underneath.

I’ve watched brands that were once extensions of a single creative vision struggle to find footing after a transition (e.g., Stuart Weitzman), not because the product changed, but because the decision-making muscle never evolved. The systems, metrics, and feedback loops that investors rely on simply weren’t there yet.

And suddenly, what used to feel like clarity turns into confusion. The founder still feels close to the business, but investors see a black box.

Glossier’s $1.8B Lesson

Glossier’s sky-high valuation of about $1.8 billion in 2021 was never about current revenue. It was about the belief it could scale like a tech platform.

(For context: that valuation represented Glossier’s Series E funding peak. More recent reports suggest the company is now valued below $1 billion.)

Just like WeWork, Glossier often referred to itself as a “technology company” in press and investor conversations. It invested heavily in building an internal tech team early on, signaling ambitions beyond product development, and its investors had tech-level expectations for scale, data, and margins.

But when that growth didn’t materialize at that velocity, reality hit. By 2025, Glossier’s valuation had reportedly dropped below $1 billion, and the narrative shifted from category-defining to rebuilding.

The lesson isn’t that Glossier failed. It’s that consumer businesses can’t outrun consumer economics. There’s a natural ceiling to scale in DTC, and venture capital learned the hard way that you can’t throw money at a beauty brand and expect it to manifest into a unicorn.

The takeaway for every founder: investors eventually refocus on fundamentals. The metrics that matter are lifetime value, contribution margin, and operating efficiency, not valuation headlines or viral moments.

Vanity vs. Value Metrics

A few examples of how this disconnect shows up—and it’s not limited to early-stage brands. Even established names fall into this trap when storytelling runs ahead of signal-setting.

It’s not that these metrics are wrong. They just need translation.

Investors are listening for signals of repeatability, scalability, and control; not just growth, but quality of growth.

Because from their perspective, every headline, follower count, or launch moment still has to tie back to the same question:

“How does this make the business stronger, more predictable, and more valuable over time?”

Bridging the Gap

The strongest brands learn to tell their story in both languages: the emotional one that wins consumers, and the analytical one that earns investor confidence.

It’s not about changing your story. It’s about layering in proof that you understand the levers behind it, and that you’re in control of them.

Through the Investor Lens

If your team is approaching that inflection point, where culture, community, and consumer love are strong but the investor conversation still feels uncertain, this is where I come in. I help create a frictionless environment that helps early-stage brands get to yes in capital conversations.

My retail advisory firm focuses on helping lifestyle & consumer brands prepare for the toughest rooms they’ll walk into: investor conversations. This work bridges the language of brand with the expectations of capital, combining my exposure to Wall Street with 15 years of in-house operating experience across the retail space.

The flagship Investor Lens Diagnostic is a focused, five-day sprint designed to pressure-test your story, align your data, and bridge the gap between brand and balance sheet.

Interested in learning more or discussing your brand’s goals? Send me a message or schedule a 30-minute introductory session below. Let’s build your investor story!

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On a three-year basis, KER’s stock has declined roughly 20%, compared to double-digit gains of its luxury peers, including Richemont gaining over 100% over the same time period. Since CEO Luca de Meo took the helm, shares have risen 85%.

🧩 1. AUR Up, Volumes Down — and That’s Intentional

Average unit retail continued to rise, but not because of broad price hikes (though this was still a contributor). The lift came from mix — selling higher-ticket items even as units fell. It’s a classic elevation move: protect profitability while pruning less-productive demand. For investors, it signals that Kering’s brands are being repositioned for quality of revenue, not quantity of sales.

🏬 2. Full-Price Outperformance, Outlet Retrenchment

Full-price stores were the bright spot of the quarter. Kering reiterated that its brands are gradually reducing outlet footprint and assortment — effectively unwinding years of over-extension. That hurts traffic now, but it’s brand-repair work the market has been waiting for.

🌍 3. Regional Pulse: Polarization Still Defines Demand

• Western Europe: Down 7% YoY but improved sequentially. Local demand (40% of total) carried the quarter, with tourism recovering only modestly (though improving vs. the prior quarter) — and no clear disclosure on which cohorts drove it.

• North America: +3% — a win relative to recent double-digit declines. Management cited improved traffic and resilient high-end spending (even as AUR is increasing), while e-commerce grew among aspirational shoppers. American cluster globally was flat in Q3, an improvement from Q2.

• China: “Progressing in the right direction,” but still polarized between top-tier and middle-income consumers — consistent with luxury peers. Sales declined 10% in the quarter.

👜 4. Gucci’s Balancing Act

Analysts repeatedly circled back to one question: where does Gucci stand? It’s a fair focus, given its outsized weight in Kering’s portfolio. Management’s tone implied that the brand’s transition is still in its early innings — emphasizing elevation of the mix and re-engagement of the high-end consumer.

• Elevation vs. Accessibility: The fact that AUR growth is coming from mix rather than price suggests Gucci is quietly reshaping its assortment toward higher-ticket items. This is a brand reset more than a pricing play — aiming to lift perceived value without alienating core customers.

• Outlet Contraction: The ongoing effort to shrink outlet presence and assortment underscores a deliberate push to rebuild exclusivity. It’s short-term pain for long-term brand equity.

• E-commerce Bifurcation: Management noted “good performance from e-commerce, where aspirational customers shop,” perhaps subtly confirming a two-speed strategy — keeping aspirational demand online while refocusing physical stores toward higher-end clientele.

• Early Innings: The brand’s new aesthetic under Sabato De Sarno is still finding its footing, and the payoff will take time.

Gucci’s evolution, of course, remains the single biggest determinant of Kering’s future multiple — and, in many ways, the ultimate test of de Meo’s turnaround strategy. Sales remain in free-fall, shrinking by more than one-third in just three years.

💄 5. The L’Oréal Deal: Streamlining to Refocus

Earlier this week, Kering announced its intention to sell its entire beauty division to L’Oréal for roughly €4 billion ($4.7 billion).

The three-pronged agreement includes:

• The sale of Creed, the high-end fragrance house Kering bought in 2023.

• 50-year exclusive licenses granting L’Oréal rights to produce and distribute fragrance and beauty products for Gucci, Bottega Veneta, and Balenciaga.

• A joint venture between the two companies to explore future wellness and luxury lifestyle opportunities.

In return, Kering gains a multi-billion cash infusion and a stream of future royalties, allowing the group to reduce debt and refocus on its core fashion houses. At the end of 2024, Kering’s net debt stood at over €10 billion as demand was slumping for Gucci, thanks to a spree of an acquisitions and prime real estate buys. This cash is welcomed.

Importantly, the sale of the beauty division to L’Oréal marks one of CEO de Meo’s first major strategic decisions — and a sharp departure from Kering’s previous direction.

CEO Luca de Meo called it “a decisive step for Kering,” adding: “Joining forces with the global leader in beauty will allow us to achieve scale in this category and unlock their immense long-term potential.”

Behind the polished press language lies a sharper reality:

• Kering’s short-lived attempt to build a beauty empire in-house cost over €3 billion (per an insider) — capital that proved difficult to scale.

• Selling to L’Oréal reverses that strategy, giving Kering a €4 billion cash injection at a time when group net debt exceeded €10 billion and Gucci’s sales are forecast to fall to just €6 billion in 2025 (from €10.5 billion in 2022).

• It signals that de Meo has both the mandate and urgency to make big moves, cutting complexity and freeing resources for a core fashion turnaround.

This JV Could Be A Sign of Where Luxury Is Headed:

The joint venture’s focus on wellness and lifestyle isn’t just a throwaway line. It reflects where the luxury consumer is migrating — spending less on logos and more on experience, longevity, and self-optimization. For Kering, it’s a way to stay in the conversation even as it retreats from beauty operations. For L’Oréal, it’s access to the ultra-high-end aesthetic world that’s increasingly shaping what “luxury” means.

🔮 6. What’s Next: Spring Capital Markets Day

Kering will host a Capital Markets Day in spring, promising to outline “longer-term initiatives driving the company and its brands.” Expect updates on:

• Gucci’s medium-term repositioning and category mix.

• Portfolio strategy and debt reduction.

• The role of partnerships — including L’Oréal — in monetizing brand equity more efficiently.

On the top-line, management guided to a similar year-on-year decline in Q4 as in Q3, signaling that the financial turnaround will lag the strategic one (though will note that Q4 has a more difficult comp).

🧠 What are the Investor Takeaways?

Kering is still in the thick of (really the beginning stages of) its reset. But beneath another tough quarter, there’s finally evidence of movement. Fewer outlets, richer mix, a re-elevated Gucci, and now a decisive exit from beauty all point to a company simplifying to grow stronger.

Kering’s next act is about focus — using sharper brand discipline and smarter partnerships to restore confidence and unlock long-term value.

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Everywhere I turn lately, brands are talking about opening more stores in the U.S. over the next few years. Levi’s is expanding. Tapestry wants more Coach and Kate Spade doors. Vuori, Abercrombie, Aerie, Alo, and Lululemon are building out fleets. And then last week, Bombas — a company that built its entire identity online — announced it’s opening its first brick-and-mortar store.

It’s exciting, but it also gave me déjà vu.

It wasn’t that long ago that the industry was declaring the opposite: that physical retail was dying and we were living through a full-blown apocalypse. I can’t help being a little skeptical. Where are all these stores going? Are we actually in a smarter, curated expansion era — or are we quietly rebuilding the same footprint everyone spent years tearing down?

The Retail Apocalypse That Was Real — But Misdiagnosed

Between 2017 and 2020, retail closures hit historic highs:

• ~8,000 stores shut in 2017

• ~9,300 in 2019

• More than 12,000 in 2020

Sears, Forever 21, Payless, Barneys, Toys “R” Us — gone or gutted. Analysts said a quarter of U.S. malls would disappear. “The mall is dead” became a headline, not a hot take.

But consumers didn’t stop shopping in stores. What died were:

• Bad leases

• Oversaturated fleets

• Bloated mall footprints

• Identical inline stores in weak centers

• Legacy retailers carrying 1999 cost structures into 2019

The apocalypse wasn’t the death of physical retail. It was the purge of everything outdated, overbuilt, or stuck in the wrong locations.

Then Came the Pandemic — and a Forced Experiment

When COVID hit, stores didn’t just underperform — they became unusable (for the most part). Brands had no choice but to pour money into e-commerce, fulfillment, logistics, customer service, and digital acquisition. For a moment, it looked like the final verdict.

But the pandemic also created a reset. Executives were suddenly asking:

• When stores reopen, what will they even be for?

• Will customers come back?

• How much of this digital mix is permanent?

• Do we rebuild physical retail — or redesign it entirely?

E-commerce didn’t kill stores. It forced brands to confront which ones were worth saving — and what purpose they would serve next.

The Rebound Nobody Predicted

By 2022, something flipped: store openings outpaced closures for the first time in years. Net new doors have been positive every year since.

The shift wasn’t random. Two things happened at once:

1. Consumers came back — differently.

Foot traffic rebounded fastest in open-air lifestyle centers and redeveloped A-malls. Shoppers weren’t just walking around — they were trying on, returning, browsing, making content, and meeting friends. Stores became part of the discovery loop again.

2. Brands stopped chasing square footage and started curating it.

Instead of building 300 generic mall stores, brands started opening 20 highly intentional ones. Smaller footprints. Better co-tenancy. Higher rent, but higher yield. Lifestyle centers instead of dying malls. Premium outlets instead of outlet sprawl.

It wasn’t a resurrection. It was a recalibration.

The Most Ironic Plot Twist: The DTC Crowd Blinked First

The same brands that built their identities around not needing stores are now opening them.

• Warby Parker has 200+ stores.

• Everlane, whose founder once said he’d “shut the company down before going physical,” has a growing fleet.

• Glossier went from pop-ups to permanent flagships.

• Vuori, Alo Yoga, Skims, and Fabletics are building aggressively.

• And Bombas — one of the purest online-native brands — is now going brick-and-mortar.

That’s not desperation. It’s strategy. Stores became marketing channels, customer acquisition tools, return centers, community spaces, and loyalty engines.

Digital-first brands didn’t abandon their original model — they outgrew it.

The Developers Didn’t Build More Malls — They Curated What Was Left

Here’s what hasn’t come back: the mall construction boom.

Developers like Simon, Tanger, Brookfield, and Macerich aren’t rolling out new enclosed malls across the country. Instead, they’re:

• Redeveloping what already exists

• Carving dead anchors into mixed-use concepts

• Recruiting higher-quality tenants

• Converting weak malls into residential, medical, food, or entertainment hybrids

• Building new open-air outlets and lifestyle centers only in high-growth markets (like Nashville)

This isn’t expansion in the old sense — it’s triage and upgrade.

Some malls will be reborn. Others will quietly die. The difference is location, income, and co-tenancy — not sentiment.

Who’s Growing vs. Who’s Just Recovering

There’s a real divide in who’s adding stores:

Legacy brands that overbuilt (Gap, Macy’s, Express, Victoria’s Secret) had to spend years closing and consolidating before even thinking about growth.

Legacy brands that right-sized early (Coach, Abercrombie, American Eagle) are now selectively reopening — but with healthier economics.

Newer brands that never overbuilt (Vuori, Alo, Skims, Lululemon, Glossier, Warby) are not backfilling dead malls - they’re cherry-picking the best real estate: lifestyle centers, redeveloped A-malls, and premium outlets, without inheriting decades of bad leases.

Curation isn’t a trend. It’s the insurance policy against repeating the last collapse.

So Are We Doing It Smarter — or Setting Up the Sequel?

Everyone’s opening stores again. Levi’s. Tapestry. Lululemon. Aerie. Abercrombie. Alo. Vuori. Warby. Fabletics. Bombas.

That can either be a sign of evolution — or hubris.

Because if store counts start rising just for the sake of signaling growth, we’re back on the same rollercoaster that ended in closures, bankruptcies, and panic headlines.

The so-called retail apocalypse wasn’t the death of stores. It was the death of bad stores. The expansion happening now won’t turn into a rerun — unless brands forget why the last one happened.

And Next?

The twist isn’t just that brands are opening stores again — it’s that the store itself has changed. And in Part 2, I’m breaking down how Gen Z, TikTok, and the new discovery economy reshaped what a physical store even is.

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When I flew back from Ireland earlier this year, I splurged on a new Bottega pouch — and I declared it. The customs officer looked over the form, flagged me for secondary screening, and sent me into the back room to pay duty. The total came out to roughly three percent.

While I was paying, the agent processing it said casually:

“You’re lucky — the 40% tariffs start tomorrow.”

And then I walked out. What surprised me afterward wasn’t the duty — it was the silence…

— No spike in chatter about surprise fees.

— No viral TikToks about luxury bags being taxed at the border.

— No shift in travel shopping behavior.

— No retail commentary calling out a slowdown.

If something had really changed, we’d be seeing it by now — in spend data, in luxury brand commentary, in travel forums, in social feeds, or in the way customs behaves at scale. None of that has budged. Which tells you everything about the moment we’re in:

The tariffs may exist on paper — but for personal luxury purchases, enforcement is still a judgment call, not a certainty.

And that gray zone is exactly why Americans are still flying to Milan, Paris, and Madrid to buy luxury goods without blinking.

For years, Americans have flocked to Paris, Milan, and Florence for luxury shopping because of two big incentives:

• European retail prices are often lower than U.S. prices, and

• VAT refunds can knock another 10–14% off the purchase

Even with currency swings and airfare, buying luxury in Europe can be cheaper — by hundreds or even thousands of dollars per item.

But that arbitrage only works if U.S. customs stays lenient, inconsistent, or uninterested.

The Enforcement Loophole No One Wants to Talk About

There’s a fundamental difference between how tariffs work on commercial imports versus personal travelers:

Commercial imports

→ Tariffs are automatic.

→ Once something hits the Harmonized Tariff Schedule at 25%, 30%, or 40%, there’s no interpretation. Retailers pay it.

Personal luxury goods in your suitcase

→ You’re still legally importing the item.

→ But the officer at the border determines how it’s classified — and whether punitive tariffs apply at all.

Right now, most travelers — even when they declare — are still being charged standard duty rates. Some don’t get flagged at all. And those who do usually pay 3% on the next $1K after the $800 exemption, plus a single-digit percentage on the remainder. That’s exactly what happened to me.

So while headlines scream about 40% luxury tariffs, the people spending thousands of dollars abroad on designer goods aren’t paying anything close to that when they come home — if anything at all.

Nothing has changed yet because nothing has been enforced yet. But the math only works as long as customs looks the other way.

A Real Example: Bottega’s Andiamo Clutch

To make this concrete, here’s what the math looks like on a real item — the Bottega Veneta Andiamo small clutch. I’ve assumed five different potential outcomes, based on how you approach returning to the US.

Assumptions used: VAT refund of 13%, 1.09 exchange rate for USD to EUR, Italy’s Bottega pricing (which already includes VAT of 22%), and an average 8% sales tax in the US. Keep in mind this is directional!

Five Customs Outcomes; Five Final Prices

A — Buy in the U.S.

• Base Price: $3,200

• Sales Tax (~8%): +$256

Final Cost: $3,456 → This is our baseline.

B — Buy in Europe → VAT refund → Declare → Standard duty

• Bag Price in Italy: €2,600, which already includes the 22% VAT (USD = $2,834 at 1.09 conversion)

• VAT refund assumed at ~13% refund = €338

• Net EU Cost: €2,262 or $2,466

• At custom, Duty after $800 exemption (on EU price converted to USD): ~3% on next $1,000 ($30), plus ~6% (for leather goods) on remaining $1,034 ($62) = +$92 total duty

Final Cost: ~$2,559 → About $900 cheaper than buying in the U.S.

C — Buy in Europe → VAT refund → Declare → Punitive tariff applied

• Net EU Cost: $2,466 (from example B)

Scenario 1: At customs, Duty after $800 exemption (on EU price converted to USD): 40% punitive tariff on remaining $2,034 = +$814 total duty

Scenario 2: At customs, the agent could also decide to apply the punitive tariff of 40% on the full price of the bag = +$1,134 total duty

Final Cost: $3,280 OR $3,600 → at the low-end, this is still slightly cheaper ($175) than purchasing in the US. However, if the customs agent decides to apply a duty to the full amount of the item, it now costs $144 more than at home.

D — Buy in Europe → VAT refund → Don’t declare → Not stopped

• Net EU Cost: $2,466 (from example B)

• No duty collected

Final Cost: $2,466 → Nearly $1,000 cheaper. (Not legal, but it’s happening, with potential for significant ramifications.)

E — Buy in Europe → VAT refund → Don’t declare → Caught

Final Cost: Savings wiped out and additional legal ramifications (not quantifiable, but not in your favor).

So Who Would Actually Change Behavior?

The only shopper whose behavior might shift materially is the one doing the math — the traveler debating between a $3K bag abroad or at home. Ultra–high-net-worth clients aren’t worried about a standard 3–6% duty, and they’re not the ones standing in VAT refund lines.

But a 40% tariff applied unpredictably — especially on a $50K haul from Hermès or Dior — becomes meaningful, even for wealthier shoppers. It doesn’t stop them from buying luxury, but it could change where they do it going forward.

This isn’t about whether tariffs exist — it’s about whether they’re enforced, and on whom.

What Luxury Brands Are (and Aren’t) Saying

European maisons aren’t attributing softer numbers to U.S. traveler pullbacks — at least not publicly.

Kering, 1H 2025:

“In Western Europe, sales fell by 13% on a comparable basis. Tourism flows, notably from Asia, are down and did not compensate for the weakness in sales to local clients.”

LVMH, 1H 2025:

They cited “good resilience among local customers,” in Europe but noted that tourism spending was increasingly impacted by currency and macro shifts.

No one is blaming U.S. shoppers — but if enforcement tightens at customs, that could quietly change.

The Real Watchpoint

This isn’t about predicting enforcement — it’s about pressure-testing how much of the European luxury buying habit is sustained by:

• Perceived price advantage

• The psychology and thrill of shopping “abroad”

• Assumed leniency at customs

Customs doesn’t need a new law to change behavior — they just need to start checking more bags.

So What Does This Actually Mean?

Even the possibility of stricter enforcement could shrink the pool of U.S. luxury spend happening abroad — not because billionaires change behavior, but because the middle-tier luxury tourist does.

If even a fraction of that spend is repatriated, U.S. brands and department stores stand to benefit — and heritage European houses could start feeling it at the margins.

The tariff isn’t the threat. Customs enforcement is.

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And it made me wonder:

When does category expansion become over-assortment—and why are so many brands sprinting toward handbags right now?

Because this isn’t really about bags. It’s about intent. Thoughtful expansion is earned — but somewhere along the way, growth stopped meaning “build on what works” and turned into “add more until something sticks.”

Handbag expansion right now is less about consumer pull and more about brand panic, performative growth, or signaling relevance — and the consumer may be the one stuck sifting through the noise. From the outside, it looks like opportunity. From the consumer’s side, it risks reading as noise — more product, not more relevance.

Let’s dive in.

The Belt Bag Was a Signal — Not a Greenlight

Lululemon’s belt bag was lightning in a bottle: a functional, social-friendly product with cultural timing and utility on its side. But success of one SKU doesn’t equal consumer demand for twelve silhouettes and a strategy built around a category you were never known for.

Yes, the company has called out growth in its Accessories category — but that bucket is broad and still relatively small compared to the core apparel business. It’s hard to know how much of that lift is belt-bag-driven versus evidence of real appetite for a multi-style handbag push.

This is where brands often misread momentum as mandate:

A hit doesn’t always mean “do more.”

Sometimes it just means “do that well.”

Why Handbags Became the Default Expansion Move

Across the industry, brands are stretching into handbags because they see:

→ Margin optics — generally, handbags and small leather goods signal profitability even if they don’t always deliver it. Handbags – for the most part – rank among the highest margin categories within lifestyle/fashion. It is important to caveat that margin upside is not universal, and can easily erode if brands over-assort or discount. Furthermore, non-leather items (e.g., nylon) largely tracks closer to apparel margins given out the door pricing and no ‘material story’ to justify high margins.

→ Lifestyle pressure — when brands feel their core is peaking, they don’t refine or innovate further, they start adding categories as a signal of growth. The internal logic becomes: “If she loves us in leggings, why wouldn’t she love us in bags?”, which of course, doesn’t always translate.

→ Visibility value — a bag is carried through more moments and noticed in ways a t-shirt rarely is — especially in an era of streetwear, social content, and “show your day” culture.

And that’s how we’ve landed in a moment where leggings labels, mall retailers, indie designers, and luxury houses are all competing for the same real estate.

The New Flood: Who’s Jumped In

Just in the past year or so, we’ve seen (to name a few):

• Lululemon — aggressive expansion from the viral belt bag into a full accessories wall over the past 1-2 years, with multiple silhouettes across nylon, neoprene, and faux leather.

• Old Navy — launched its first full handbag collection in September 2025.

• Alo — debuted a luxury-leaning handbag line in early 2024, made in Italy in leather and suede.

• Veronica Beard — introduced handbags in Spring 2024, leaning into polished, work-to-weekend silhouettes.

• Khaite — released its first hero bag, the Blake, in mid-2025, entering the space with an it-bag strategy rather than an assortment play.

• Nanushka — debuted the SANDI bag in multiple shapes and variants in early 2025, pushing deeper into leathergoods.

The message:

Five to ten years ago, new handbag brands were born — Polène, Cult Gaia, Mansur Gavriel.

What’s happening now is different: apparel and lifestyle brands are entering handbags not to define themselves, but to compensate — for saturation, maturity, or relevance.

So the real question becomes:

Is this competition — or a sign they’ve hit the ceiling elsewhere?

And more importantly:

Are consumers asking for handbags from these brands — or are brands deciding consumers should want them?

Where Over-Expansion Starts to Crack

Category stretch stops working when it’s reactive instead of intentional. The biggest risks:

• Brand dilution — If the new product doesn’t reinforce your identity, it chips at it.

• Operational strain — Bags require hardware, QA, factories, fit, and inventory bets.

• Commoditization — When silhouettes feel interchangeable, no one owns the space.

• Shelf-filling vs. demand-filling — Over-assortment is often confusion dressed as choice.

• Panic launches — You can feel when expansion comes from fear, not conviction.

• The biggest miss: Is there even a customer for this product?

This is what’s happening to Lululemon: not “meeting demand,” but trying to manufacture it.

What This Means for the Consumer

When every brand sells bags, the burden of editing shifts to the shopper.

• Choice doesn’t equal clarity. When everything looks similar, consumers default to brand heat, price, or whatever logo signals status.

• Brand equity becomes the filter. If silhouettes blur, people buy the name, not the product.

• Impulse replaces attachment. More sameness leads to less loyalty — bags become seasonal fillers, not identity pieces.

• Core loyalty doesn’t always travel. Loving your leggings doesn’t mean trusting you for leather.

• Ironically, the originals may benefit. In a sea of newcomers, heritage and cult players (e.g., Coach, Polène) may stand out more, not less.

What This Means for Brands

If everyone can sell a handbag, the advantage isn’t in entering the category — it’s in how, and why, you do it. The brands that win from here won’t be the ones with the most SKUs, but the ones with the most clarity.

1. Assortment discipline is now a competitive advantage.
   Throwing silhouettes at the wall isn’t strategy — it’s inventory risk dressed up as innovation. When every brand is expanding outward, the ones that edit tightly will feel more confident, more premium, and more intentional.

2. Growth can’t be cosmetic.
   A new category doesn’t fix a flat core. If the main business is losing momentum, adding bags won’t solve the story — it just stretches it thinner. Consumers can feel when category expansion is coming from conviction versus fear.

3. Permission matters more than presence.
   Loyalty in one category doesn’t guarantee credibility in another. Just because a customer buys your leggings, dress, or blazer doesn’t mean she wants your handbag. Category adjacency isn’t the same as category permission.

4. Restraint is starting to read as confidence.
   Five years ago, not expanding made you look slow. Now, in a market where every brand is stretching, holding your lane — or entering one new category with precision — can feel sharper than chasing “lifestyle” status for the sake of it.

When Expansion Works: The Exceptions

There are brands that earned their way into handbags (and this was not an overnight process):

Lululemon (early stage): The belt bag worked because it was functional and spoke to their core audience. The mistake is assuming momentum equals carte blanche for 30+ SKUs.

Telfar: A fashion label that became defined by a single bag, not overwhelmed by many.

Ralph Lauren: A rare example of handbags reinforcing a lifestyle universe rather than chasing trend.

The lesson:

Expansion works when it extends the brand, not replaces or confuses it.

Side Question: What Happens to Pure-Play Handbag Brands?

If everyone’s now in the handbag business, the brands built on handbags have a new problem.

Think Coach, Kate Spade, Michael Kors, Mansur Gavriel, Polène, Longchamp, Dagne Dover. Their competition isn’t just other leather goods players—it’s apparel, athleisure, and mass retail.

The fallout:

• More noise, less clarity

• Price pressure from above and below

• Heritage no longer guarantees relevance

• Differentiation depends on design and heat—not distribution

• Some consumers boomerang back to specialists when newcomers feel hollow

Over-assortment doesn’t just crowd the shelves—it crowds the brands built to own the category.

The Real Point: Precision > Presence

This conversation isn’t anti-handbag. It’s anti-reflex.

Growth doesn’t come from adding categories — it comes from knowing why you’re entering one, and whether you’ve actually earned the right to show up there.

The questions brands think they should answer —

“What’s next?”

“What else can we sell her?”

…aren’t the real questions. The ones that matter now are:

• “Do we have permission to make this?”

• “Does this deepen our relevance, or just hedge our revenue?”

• “Would anyone miss it if it didn’t exist?”

• “Did the consumer ask for this — or are we convincing her she did?”

A hit product shouldn’t trigger panic-scale expansion — it should earn thoughtful extension.

Because if everyone sells a handbag, no one owns the category. And if every brand tries to become a lifestyle brand, restraint — not reach — becomes the differentiator.

Where This Conversation Goes Next (from an Investor Lens)

This wave of expansion doesn’t just reshape shelves — it reshapes scrutiny.

For brands born in the handbag space, the questions from the external community will sound like:

• How are new entrants impacting your market share?

• Is competition diluting demand, or expanding it?

• Does your brand heat insulate you, or do you need to sharpen your edge?

The strong ones will hold — because category credibility still matters more than category volume.

For brands expanding into handbags, the questions from the external world get sharper:

• Why this category — and why now?

• Did consumers ask for this, or did you assume loyalty would transfer?

• How big is the planned investment?

• What does the assortment look like — and what did you test?

• What are sell-through expectations?

• What does success look like beyond “we have bags now”?

Investors and operators won’t just ask if a brand can enter a category —they’ll start asking whether it should.

And that’s where intent — not SKU count — becomes the real strategy.

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Nike’s quarter landed squarely in “better than feared” territory. Revenue was up just 1% (-1% on a currency-neutral basis) to $11.7B. Excluding FX, Wholesale grew +5%, while NIKE Direct fell 5%. Gross margin slid more 320 basis points to 42.2% on discounting, tariffs, and mix pressure. EPS at $0.49 beat expectations, and inventories ticked down 2% year over year.

So yes, Nike cleared the lowered bar. But “relief” isn’t the same as conviction.

The Core Strategy — Back to Sport

Nike keeps emphasizing its reorganization around sport. Basketball, running, football, women’s sport. On paper, it’s clean. It brings the story back to roots, performance, credibility.

But in practice? It feels fuzzy. What about categories that blur lines — yoga, training, everyday wear? Or lifestyle partnerships like Skims? That’s not “sport,” it’s culture. Where do those fit? If the framework can’t explain Nike’s biggest growth engines, it risks looking more like storytelling than strategy.

Guidance, or Lack Thereof

For a company that talks conviction, Nike still is steering clear from giving full-year guidance. At this point, analysts have accepted it as the “new normal.” But it leaves the Street piecing together growth algorithms from scraps. For a brand mid-reset, you’d think management would want to anchor expectations (especially at this point). Instead, the opacity feels like a disconnect.

The CEO’s Voice (and Silence)

Elliott Hill’s presence is everywhere — courtside, on the sidelines, woven into prepared remarks. It underscores the “Nike is culture” story. But in a turnaround? It can read more like optics than focus.

And when you strip the CEO’s script down, there wasn’t much there. Plenty of enthusiasm, even that odd “scary good” line, but light on actual detail. It made me wonder how much of this is conviction vs. performance. Of course, a balance is demanded from CEOs — conviction matters, but so does substance.

Realism in Tone

To their credit, Nike did strike a balanced note this quarter in their commentary. Wins were highlighted — wholesale momentum, cleaner inventory, early product response. But so were the struggles. That realism is refreshing after years of gloss. Still, the growth profile doesn’t yet match the reset narrative.

Sidebar:

So Why Is the Stock Up if I’m Skeptical?

If you’re wondering why the stock rallied on this print when I’m raising so many questions — here’s the short answer: relief and narrative.

• Sentiment was low going in, so “better than feared” alone drove a relief rally.

• Positioning mattered: hedge funds were short, under-ownership was high. Covering creates a tailwind.

• Investors are buying the idea of a turnaround — not the proof yet. Nike has earned longer patience than most.

• Sell-side framing reinforced the positives: “stabilization,” “green shoots,” “innovation building.”

The market trades on what could be, not what is. For now, “not as bad as we thought” is enough to move the stock higher. But, that wait and see position won’t last forever. Eventually the numbers have to deliver.

How Did Nike Even Get Here?

This may be the bigger question. How does one of the world’s most iconic brands find itself explaining a multi-year innovation drought, margin pressure, and strategic whiplash?

There’s a lesson here for brands — and for IR teams:

• Credibility erodes slowly, then suddenly. Ignore product or pipeline discipline, and investors will eventually notice. You can only hide behind numbers for so long — it becomes increasingly difficult to mask the underlying reality.

• Frameworks have to map to reality. If your segmentation looks neat on slides but doesn’t reflect what’s actually driving growth (athleisure, collabs), the market will poke holes.

• Narrative and numbers have to align. Too much of one without the other undermines trust.

• Tone matters. A balanced, realistic script won’t solve problems, but it buys time.

• Keep your head out of the sand. If there’s a material problem, investors want to know. Putting band-aids on big issues only creates snowballing issues later. The Street doesn’t need to hear about every single missteps, but they absolutely don’t want to be surprised. That’s the name of the game.

Sidebar:

The Questions You Don’t Hear on the Call

And OK, you might be thinking — thanks for writing this, but why didn’t sell-siders ask these questions on the live call then? Something else worth flagging, especially for smaller brands who may listen to these calls for cure: you might think, if analysts aren’t grilling Nike, they probably won’t grill us. But public Q&A is only part of the picture.

• Earnings call Q&A is dominated by sell-side analysts, who have to manage relationships with management. They frame questions diplomatically.

• The tougher stuff — “How does sport segmentation actually work?” “Why no guidance?” “Why wholesale up but Direct down?” — often happens behind closed doors: in one-on-ones, group dinners, and investor conferences.

• Buy-side investors (the ones actually moving the stock) push harder in those private settings.

So don’t mistake a polite public Q&A for the absence of skepticism. The questions are there — they just don’t always show up in the transcript.

My Takeaway

Maybe this is an inflection point for Nike. Maybe wholesale momentum + sport framing + cultural visibility will add up. But my gut says the narrative is still running a step ahead of the numbers.

That doesn’t mean Nike isn’t moving in the right direction — it just means the proof isn’t fully there yet. And until it is, I’ll keep questioning the story.

The Street may be willing to buy it. I’m still shopping for proof. And looking forward to these holiday prints!

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