Behind the Business

Experts say that periods of increased wealth bring increased spending on art. Christie’s has experienced this first hand.

In May 2026, the centuries-old auction house generated over $1 billion in art sales… in one evening.

But to compete in the ultra-competitive auction industry, Christie’s is looking to broaden its base of buyers.

In this episode of Behind the Business, Fortune’s Phil Wahba gets an inside look at the Christie’s May 20/21 auction to explore how the company is leaning into its multi-million dollar art auctions while attracting younger, next generation bidders.

How Christie’s Made over $1 Billion in One Evening | Behind the Business

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Sold, sold. Congratulations. On the evening of May 18th, Christie sold over $1 billion worth of art. In just a few hours and we should start you at $11 million.12 million dollars, $13 million. After years of stalled sales, the art and auction industries are making a comeback. But that recovery is increasingly concentrated in a small number of ultra expensive, highly competitive collections. We expect about $1 trillion worth of art to change hands over the next decade as competition intensifies for the market's most valuable art collections. Christie's is battling on two fronts securing the limited supply of headline-making masterpieces. And expanding its auctions to attract the next generation of buyers. We do sell things that are 5000 as well as 50 million. There is something that will be interesting to you. Can the centuries-old auction house build its new base while still winning where the bidding means the most? Fair warning, last chance, no regrets. 154 million you Spring is the start of art season in New York. The walls of the world's leading art houses bloom with O'Keefes, Monet's, and Warhol's, welcoming the world's wealthiest to pick up Picasso's and Pollock's. So it's in the region of $80 million the Roscoe, which is the top lot of the 20th century evening sale, but the art market isn't all sunshine and Rothko's. In 2024. Global art sales fell about 12%. Christie's CEO Bonnie Brennan says improving sales in the last year and growing optimism across the market are painting a brighter future for the industry. We had a really solid 25% in the back half of 25. We had a 25% increase in our sales. What does that mean and why does that play a role? Because it gave people confidence. It said, OK, the market is stable. I can sell my works with confidence that there will be competition and great results. What's driving what you sell and demand currently that would explain great prices for so much of the pieces of art and collectibles that you're selling? So much of our success depends on the supply that we have to sell, and we have been incredibly lucky this season that we have excellent supply. A lot of the great collectors of our generation have sadly passed on. And therefore we're seeing those collections come to market that really offers a special opportunity to buyers. It's a rare opportunity and it's a discovery, and that's what makes the market really excited. Is Gerhard Hichter still alive? Yes, so he's perhaps our greatest living painter today. It's not every day that a billion dollars collection hits the market. These works are critical to auction houses' bottom lines, meaning competition for these estates is fierce. Brennan is experienced in winning those battles. Before becoming Christie's CEO in 2025, she had spent decades between both Christie's and Sotheby's, during which she secured and managed record-breaking sales that grossed in the hundreds of millions of dollars. The business of sourcing property to me is something that starts when there's no real opportunity. You have to build that relationship and that trust long before you ever get to the point of saying, would you ever sell that work? The auction business is one that benefits from volume and scale, but it's the right kind of volume and scale. In the art auction world, you'll often hear experts like Drew Watson cite the three D's for why someone might be selling their collection debt, divorce, and death. And we'll sometimes throw in deaccessioning, which is just a fancy word meaning discretionary selling from a collection. And then I will throw in 1/5 1, which is downsizing, people selling maybe a large home, moving into a smaller space. It sounds mundane, but it's a real problem when you're Trying to hang art. Yeah, well, a problem I cannot relate to, but you know, Watson has spent decades advising some of the art industry's biggest spenders. He says that periods of high wealth concentration from the Renaissance to the 1980s tech boom, often come with increased spending on art. 2,200,000 pounds. The art market is a very sentiment-driven market, and the wealth effect essentially tells us that when markets are down. And collectors feel like they have less disposable income to be able to make large discretionary purchases like purchasing art, that typically is a headwind for the art market. And conversely, when equity markets are up, people see their portfolios are up, even if they're not realizing those gains. They feel like they have more liquidity at their disposal to deploy in large purchases. Do you keep an eye on the Stock market and the IPO market, or is the clientele at your top, top, top end a little bit immune to whatever the Dow is doing? We are watching all the time what's happening in the markets. Yes, our clients are immune, but they don't feel immune, and perception is reality. And if they're feeling impacted. That impacts their participation in our sale. Today, the thriving US stock market is expanding the slim class of ultra wealthy buyers, leading major auction houses to focus their sales around the market's most valuable masterpieces. We're coming off of a period of extended stock market gains. This is part of the overall K-shaped economy, and we've seen a stratification, especially in the auction space. The ultra high-end auction houses, the global. Houses like Christie's Sotheby's and Phillips really trying to up-tier their offering and not taking lower value lots as they would have maybe a decade ago. We are in the middle of what many people have thought of in the art world as the great wealth transfer. We expect about $1 trillion worth of art to change hands over the next decade for $39,500,000 sold. $100 million on several of the pieces. There are a lot of wealthy people in the world, but that is serious wealth. Does the pool of buyers not shrink with time? We sell works across 80 categories. Our average lot value is just over $100,000 but our median lot value is under $10,000. Yes, you read the headlines about the $100 million picture. And of course there are fewer buyers for that work. The good news is that there's so much wealth creation in the world that we've actually seen a number of new buyers participating at the masterpiece level. What right now is fueling this top end of the market? The 20th and 21st century sales in New York, I mean this is the moment in the calendar where we know the high end of the market comes out. In other words, the individuals with the highest willingness to pay come out and bid and purchase art. The first Christie's auction. Debuted in London in 1766 when James Christie sold a pair of sheets, some pillowcases, and a couple of chamber pots. Today, Christie's is one of the largest auction houses in the world and offers over 80 different art and luxury categories ranging from cars to collectibles. But the diamonds in Christie's crown are its biannual 2021 art auctions, which feature some of the world's most prized pieces of 19th to 21st century art. This is a Brancuzzi sculpture which previously set records. It was the record for any sculpture ever sold at auction. The current record for Brancusi is around $70 million. We're going to sell it at $93 million selling the Brancusi for $93 million. So 93 to about 1793. Last year, the two weeklong auctions brought in nearly $2.9 billion. Those two sales alone accounted for nearly half of Christie's total annual sales across public and private sales. In other words, a narrow sliver of ultra wealthy buyers, both able and willing to spend multiple millions on a single painting, can now make or break Christie's bottom line. How many people are really participating in this globally? Is it in the hundreds of people? Is it in the thousands? I mean this is the 1% of the 1% of the 1%, right? There are relatively few collectors that are able to bid at that level, but when they do, they will go after it aggressively. Against 4 other bidders, $104 million no regrets for $155 million. Are we sure? 156. While Christie's is still dependent on its 2021 art auctions, Brennan is transforming the centuries-old company into a next generation auction house. The company has leaned into luxury items like handbags, watches, and sneakers, which are the main entry point for new and younger buyers. The millennial and younger cohort now represents almost 50% of the company's new bidders. Tell us a little bit about this new cohort that's coming up. Are they gravitating to the same classics, or do they have their own artists that they're particularly drawn to? I think this generation we see a great confidence and bravery and looking at different things. They're not just following what their parents bought. We've seen a huge demand around luxury goods. We've had a digital art moment here at Christie's. Recently bought a car auction house. We see a tremendous new young audience really interested in vintage automobiles. We have to be good listeners to how they want to engage with us and what they want, and that for Christie's is the best way to make new relationships. Bring them in, have them come to our website, and then be able to show them a much more diverse offering. Technology has become central to Christie's operations. Over 80% of bids are now placed online, allowing Christie's to tap. Into an expanding pool of international buyers. You are obviously well established in the UK and in the US. Where else do you see interest in Christie's and selling through Christie's and buying through Christie's? About 50% of our business is generated in our New York sales room. London has been and always will be our headquarters. Geneva is a major sale room for us for luxury. We see interest from the Middle East. We just expanded in the Kingdom of Saudi Arabia. We have seen great interest from Asia at the highest level of the market. Yet behind the pomp and price tags remains a more human element to collecting art. People who I think are drawn to collecting have to be to some extent emotionally driven, and I think it's no accident that we think of art as a passion asset. Works of art are like children to them. You can sit in someone's living room and they'll talk for hours about how they bought a particular work of art. Those things really mean something to them, and. $11 million.12 million dollars, $13 million. There's an old adage in the art ecosystem that says buy what you love, but I'd like to give that a twist and say you have to love what you buy to be able to navigate the current market with valuations where they are, and selling them for $157 million to Alex Rogers Telephone and selling the product.

With Barneys closed, Lord & Taylor gone, and Macy’s and Saks Fifth Avenue closing stores, the department store industry is in turmoil. Nordstrom's strategy? Going private. Less than a year in, they say the brand has never felt more focused, and it’s growing again. In this episode of Behind the Business, Fortune’s Phil Wahba goes inside the company's Manhattan flagship store to find out how they did it, and whether the success can last.

Can Nordstrom thrive in the department store crisis? | Behind The Business

Today department stores are under siege. 2 dozen stores are now closing nationwide. Closures are part of their goal to shrink its footprint in the United States. Shoppers have moved online. Many brands have left department stores, and bankruptcies have slammed the luxury world. So in 2025, Nordstrom made a bold move, going private and returning control to the founding family. Customers don't care if you're public or private. They like to go where they like to go. And now Nordstrom is enjoying a renaissance, launching high profile brand collaborations and opening more stores. 125 years in, the department store has never felt more like a startup. Why does anybody need Nordstrom? That is the ultimate question. So what exactly is Nordstrom's playbook, and will it pay off? On West 57th Street in Midtown Manhattan, Nordstrom's flagship rises 7 stories with floor to ceiling glass cutting through the skyline. It's impossible to miss. Hey. This flagship opened in 2019, the same year Barney's filed for bankruptcy, and Henry Bendell shuddered after more than a century. Then came the pandemic. Lord and Taylor gone in 2021. Macy's closing 150 stores, and Saks Fifth Avenue closing more than half of its stores in 2026. The industry has been in turmoil for years. Faced with the broader retail disruption and mounting competitive pressure, Nordstrom made a decisive bet. Go private, take back control. What have you been able to do as a private company that might have been a bit tougher to sell to Wall Street as an idea? I would say customers don't care if you're public or private, and most of them don't know, and they don't even necessarily know what that means, but they like to go where they like to go, and I would say it's noticeably different for Eric and myself in that I think we have more clarity, more focus, and more speed, not having the other agenda of being a public company. We certainly save the time. We don't have to invest our time into. Communicating with the public markets and the time that goes into having a public board, that preparation helps us with improved focus as there's some noise that gets removed. What keeps you up at night about the business? It was all us. I mean, if it wasn't going to work, it was all us. It certainly wasn't a ramped up part of our responsibility and accountability that we took really seriously, and we still do. Nordstrom's started as a single shoe store in 1901. Today it's a multibillion dollar retail empire, and the family running it says they see an opening in the industry's upheaval. Where's the opportunity right now that you see for Nordstrom? I don't think the department store model in and of itself is something that can't work. I think it needs to evolve, and that has a lot to do with the symbiotic nature of how online and stores work together. Less than a year in, the results speak for themselves. Under co-CEOs Pete and Eric Nordstrom, the company is expanding, opening 22 new rack stores in 2025 alone, bringing them to almost 300 locations nationwide. Total sales grew to $15.9 billion in the same year, an all-time high of 7% from the prior year, says the company. There was only really one way to do business. You bought stuff from wholesalers, you brought it into the store, you, you displayed it, people came and they bought it. That was the whole recipe of how this worked in my dad's generation. All that stuff has changed in my lifetime, immensely. And so it requires some agility, and I think it requires some thoughtfulness and some curiosity to keep going. See, this all just got built up because we didn't have all the brands represented. I mean, it took a while to get this all filled in, and sunglass is a great example of people get a chance to get a luxury brand in a way that's something they can afford. It is the gateway to all of this stuff. You have an offering that goes beyond just high luxury. Can you dip your toes further into the true luxury market? The way we think about it is how a modern person dresses. And even the richest person around doesn't wear a head to toe designer outfit. People have different things for different occasions, different need states, and what we want to do is represent the best of what a modern person wants to have. Think about who the customer is, where they're going, what they're doing, and how we can be a top of mind solution for them. So what is your number one challenge? I think it's evolving. Customers define what good service is, not us. You go back to like 80s and 90s, that was all about one on one interactions, high-touch interactions in a store with people. And what's changed is the way technology and as it serves online business, the logistics of all that. It's really shown how speed and convenience can be an incredibly important factor in how people define good service. The department stores, they are evolving and going after experience. Stacy Whitlitz has spent her career tracking the retail industry. She says the rules of the game have fundamentally changed. Just like the restaurants, the beauty services, they also want self-discovery. Now the department stores that are successful are leaning into how do we reel them in and how do we keep them here, and then it's through excitement, experience, and services. Beauty is such an important part of the store, particularly as it creates traffic, and that's where customers can touch everything. They don't have to be behind a counter, and there's so much more kind of open sell here. It allows customers their own sense of discovery, but then you've got all the help too. But the experience doesn't stop at beauty. Nordstrom has woven food and beverage throughout nearly every floor of the New York City flagship, including a shoe bar tucked among the designer footwear. It's giving people just a chance to dwell and hang around, and people like drinking. When we introduced bars, it turns out people like that. That's what brings people in. And if you think about it, if a customer is shopping in a high-end experience, they may be with their partner. Great, so their partner has somewhere to sit, have a drink, have a coffee, go to a restaurant. It's all about creating and curating these experiences where you want to hang out and that create an actual destination more than this one-off experience. Nordstrom has made brand relationships a centerpiece of its comeback, cultivating partnerships that go well beyond the shop floor. You're a brands guy, so let's talk about that for a second. You also have to treat brands well. Has those difficulties a couple of your competitors have faced given you the opportunity to attract new brands that you might not have had before? The relationships are important, and we invest a lot of energy in that. What's most important to brands is that they show up. An environment that reflects their brand, whether it's the aesthetic of what they're going after, the other brands they might be around, the kind of customers we're trying to serve, how we serve them. They want to show up in a way that is value add to their brand. And then obviously there's the business part of it they want to get paid. I mean, that's, you know, who doesn't? They're looking for a trusted multi-brand partner. They're probably not going to sell everyone. Let it be us. How do you feel about generally the fleet? We are where we need to be. We do have a capital plan to keep investing in stores. We want to keep up with them. We want every store to feel like it's a Nordstrom that's representative of our brand. Could they do fewer of their larger full-line stores and have more local stores for fulfillment, which has been one of their strategies? Absolutely. I still think the business in general is overstored. There's room to right size, including for Nordstrom. And then there's Nordstrom Rack, where the same designer brands cost a fraction of the price. It's been a bumpy ride, but now the rack is back. Formula that works best for rack is when we can bring the kinds of brands you'd find in a store like this into that off-price market. So while our average price went a little higher, the value is still there because the percentage off what it is from regular price is fantastic. And then that whole ecosystem works together in a complementary way. We get more new customers coming into the rack channel than anything else we do. It introduces more people to Nordstrom and the brands that we carry, but the challenge is you don't want to flow that stuff too much down to the stores because you're competing with yourself in the full line stores, and also you are not making your vendors exactly thrilled if you're selling your stuff on discount. So there's a lot of challenges with it. That's kind of the hole in the market, filling in somewhere between resale and full line. There's also Bloomingdale's, which is stronger than it has been in a very Long time. How does Nordstrom compare now to Bloomingdale's in grabbing this market share? I think there's room for both of them. Nordstrom has two purposes in the market, and again it is about luxury, but it's also about giving the customer something at price points, whether it's giftables or something that a mid to high-end luxury person can come in and find something for them without spending thousands of dollars, and that is, I think. A space that they're really leaning into with a private label. I'm going to the shoe section. I'm going to the shoe section. I'm getting shoes. Behind the business strategy is something more personal a family name on the door and 125 years of legacy to protect. What does it mean to you for the company to be doing better again? I think we feel a lot of responsibility. It's hard for me to separate our name being on it and being part of the family from the job that we do because it's always been that way. Eric and I have been working together for so long that it doesn't feel complicated or feel different, and frankly, if he decided to leave tomorrow, I think my job would become a lot less enjoyable and a lot more stressful. You know, our dad was very much a values driven person, and one of the values that was high on his list was family and loyalty, and I can hear him saying, Support your brothers, support your brothers. I would hope our ancestors would be proud of what we're doing. I think this is a really crucial time and it was the best decision for them to be able to fix their model, whether it's right sizing or inventory issues or figuring out what the rack is going to be to the American consumer to put all that together. Repackage it and come out stronger 3 to 5 years later. It looks to me, it appears that if they get all these things right and have the right leadership, there's no reason why in several years from now we don't see them go back to the public market. It sounds like the department store of the future you're describing is very much like the department store of the past. It was the destination for everybody and a special place to go, right? In a sense, very much it's like what's old is new because we used to go to the department stores, you would go with your friends, you would go with your parents. It was a huge feeling. You remember those things in your childhood growing up. We're going to the mall, so maybe taking a hint from the past to make it that special connection day with your friends or your family, some of that needs to come back in order for the department stores to succeed.

Victoria’s Secret and its iconic Angels are back, but this time with a new definition of "sexy". In an era where consumers value comfort, inclusivity, and authenticity, the brand is fighting its way back into the cultural zeitgeist — with a reimagined Victoria’s Secret Fashion Show and tapping into K-pop stardom to win over Gen Z. In this episode of Behind the Business, Fortune’s Most Powerful Women editor Emma Hinchliffe sits down with CEO Hilary Super to explore how to make a legacy intimates brand relevant once again.

How Victoria's Secret Is Redefining "Sexy" | Behind The Business

Victoria's Secret was and still is the largest intimate brand in the world. For most of the past decade, Victoria's Secret has been treated as a cautionary tale, a once dominant brand that failed to evolve as culture and consumers moved on. It was sexy, that was very narrow and defined by someone else. And yet in recent months, the story has changed again. So sometimes this is sexy, glamorous, and envelope pushing, and sometimes this is sexy because you're feeling great about yourself. Customer growth has returned. Cultural relevance has re-emerged. Everyone on TikTok is losing their minds. Victoria's Secret. This is the bra you've all been going crazy for, right? The Victoria's Secret Fashion Show is back, and for the first time in years, it's driving sales. And after a bruising period for the stock, momentum has followed. There were a lot of reasons you could have said no to this job. So why did you say yes? Because I thought it was the transformation opportunity of the industry of a lifetime. For most of its history, Victoria's Secret didn't just sell lingerie. It sold an aspirational, carefully curated definition of sexy. And for years, that formula worked, turning a mall-based intimate store into one of the most influential global retail brands. As consumer preferences shifted toward comfort, inclusivity, and authenticity, competitors moved quickly to embrace body positivity and digital first strategies. Victoria's Secret, meanwhile, amid a series of scandals, faced growing criticism that it was increasingly out of step with consumers, particularly younger women. You say Victoria's Secret represented a narrow point of view for a long time. If you had to put that into words, what was the narrow point of view? I think that point of view was sexy, and it's sexy is still at the heart of who we are and what we do, but it was sexy that was very narrow and defined by someone else. Victoria's Secret CEO Hillary Super joined the company in 2024 from a disruptive competitor and inherited a business that still generated. Billions in revenue but no longer define the conversation. I mean this brand has incredible global reach. It's the world's 1 intimates brand, #1 bra brand, world's sexiest brand in the world. There's incredible DNA, incredible reach, and cultural relevance, and it just needed to be brought into this next chapter, needed to be repolished, needed to be modernized, and the two brands needed to be made more distinct. And I just wanted to get my hands on that. Amid new competition from celebrity founded brands and digital newcomers, I can't wait for you guys to try this bra. Super's strategy is focused on a return to product expertise and building a brand that resonates with younger generations. There are 4 pillars in our strategy. It's called the path to Potential. The first one is about supercharging bras. The second is recommitting to pink. I believe that we can grow this business back and capture this. Next generation. 3rd, really maximizing beauty. The 4th pillar is really around evolving our go to market strategy. We have an opportunity to make sure that the creative DNA associated with each brand is distinct and compelling, and that we're using our full funnel and all modern marketing tools to really reach segmented groups of customers and to focus especially on customer acquisition. You've defined this new era of sexy. What is sexy? Sexy is what you want it to be. I think sexy means something for every woman, and it means something at different moments in her life. So sometimes this is sexy, glamorous, and envelope pushing, and sometimes this is sexy because you're feeling great about yourself. Over the past year, this strategy has started to pay off, and Wall Street is responding positively. In the third quarter of 2025, net sales rose more than 9% year over year. I'm on the corner of 51st Street and 5th Avenue. This is one of Victoria's Secret's flagship stores, and I'm about to chat with Elizabeth Price, the new CEO. It's a Tuesday afternoon right now and we are still surrounded by people getting their Victoria's Secret fix. There are very few times that the store is not busy at some level. Wow. So how do you get the store ready for Valentine's Day? Oh my gosh, well, the team that goes into this is pretty extraordinary. We have about 35,000 associates across all of our stores. Many of them are full time. We do have some seasonal associates as well. And just a fun fact, every single one of them is trained to be a bro fitter. So it's something we take very seriously, um, but the team is just passionate about the customer, passionate about bringing the customer and bringing that love of Victoria's Secret to life. If bras represent authority, the company's second brand, Pink, represents the future and another key pillar of the new strategy. The thing about Pink, which is a little bit different than Victoria's Secret, is that it's a much more balanced lifestyle, you know, truly a much broader range of apparel for this customer. You said you're laser focused on the 20 year old. Why her specifically? You know, we realize and acknowledge that our customer has grown up with us, and it's really time to introduce ourselves, both brands, to the next generation. Uh, and there are many ways we're doing that. Um, first and foremost with the Victoria's Secret fashion show this year we were really proud that we were able to showcase both brands and to really in real time show the, the living, breathing difference between those two brands, um, and the response was overwhelming. The Victoria's Secret fashion show reached peak cultural relevance in the 2000s as a highly anticipated annual show, but by 2019, shifting consumer expectations and falling ratings made the show feel out of step, leading to its cancellation. Its return in 2024 and evolution in 2025 marked a turning point for the brand, with returning angels and even K-pop stars reflecting the company's updated focus. It's been a few months since the fashion show. What are your biggest takeaways and what has the tangible impact been on the business so far? The tangible impact has been significant growth in customer file, growth in the business as we reported in Q3 earnings, and then buzz and just relevant. Scores, we, we owned the algorithm. We truly owned the algorithm on TikTok for weeks after the show, and I think that organic virality has, has really made a measurable impact on our business. It was really interesting to see your international business grow in your most recent earnings, and you included K-pop in the Victoria's Secret fashion show recently. Where are the biggest opportunities? You internationally and what are they? We will continue to open new stores in our existing regions. We have a few new countries that we're looking to get into and then I would add that social commerce is emerging as a big opportunity for us. It's a huge driver of our China business at the moment, and we're looking to take that learning and apply it globally. You're executing this turnaround, but at the same time facing some major headwinds like a net impact of $90 million from your tariff bill. Will tariffs impact the progress you're making here? I don't think so. I think something that we've learned over the last several years is every time a challenge comes to us, um, whether it's the challenge of COVID-19 or tariffs, we come out on the other side stronger. Has it been challenging? Has it been something we've had to really bond together as a team and figure out how to mitigate? Absolutely. Um, did it come on faster and stronger than any of us expected? Absolutely. Have we, has the team done an incredible job mitigating those impacts? Yes, they have, and I think we are really setting ourselves up to be stronger than ever as we enter 2026. Victoria's Secret has regained momentum and is on the way to a promising comeback. We are not going to be for everyone. A brand has to stand for something. Victoria's Secret stands for sexy, glamorous, accessible luxury, and that is who we are and our job is to connect those attributes to culture today. And while that may not be for everyone, it's for many, many millions of women. We have 25 million plus active customers in North America alone. We have hundreds of millions of women around the world who love Victoria's Secret, and I hope that customers who haven't engaged with. Us yet or maybe haven't engaged with us in a while, we'll give it a chance. We'll come and see what we have to offer because we really do offer a lot more than one point of view. While leadership and Wall Street are both optimistic, the real measure of success will be whether this momentum can be sustained. I think Victoria's Secret is the sexiest brand in the world, and there's, there's just a lot to love about thinking about what that looks and feels like in this next chapter.

From a single Los Angeles motel to a multi-billion-dollar global chain, Hyatt is redefining the meaning of luxury. After leading the company for almost two decades, CEO Mark Hoplamazian gives us an inside look at the hotel operator’s newest frontier: a full-scale brand reorganization designed for the next generation. By shifting from real estate ownership to high-margin luxury experiences, Hyatt is doubling down on the future of luxury travel. In this episode of Behind the Business, Fortune’s Matt Heimer explores how Hoplamazian and Hyatt are navigating transformation in a shifting travel landscape.

Hyatt Hotel’s extensive portfolio features over 1,450 hotels and resorts spread across over 80 countries, ranging from more affordable standard hotel rooms to luxury all-inclusive resorts. Now, in order to meet shifting travel trends and remain competitive among rivals many times its size, Hyatt is nearing the final stages of a full-scale brand reorganization. Here’s why Hyatt is selling real-estate and investing in luxury, experiences, and tech-backed trip planning to book the next generation of travelers.

Why Hyatt is Leaning into Luxury | Behind the Business

How do you actually deliver what the brand promises that actually requires two things. First, super clarity about what the brand stands for and why it is positioned that way to be responsive to what the guest base needs. From its modest motel beginnings, Hyatt has constructed one of the largest hotel and resort portfolios in the world. The company remains far smaller than industry leaders Hilton and Mer. It and rising operational expenses, travel uncertainty, and external shocks like the COVID-19 pandemic have made growth difficult. Hyatt's strategy sell real estate and invest in expanding its luxury brands. Instead of splitting your attention between being a great property owner, we are now really focused on brand building and investing in the brands backed by data-driven. Loyalty programs and new brand acquisitions. H Hyatt is positioning itself to expand its lead in luxury and experiential travel. Younger consumers are spending on these really specialized experiences. It's not a one size fits all anymore. Here's why Hyatt is building brands instead of hotels in order to keep the next generation of travelers checked in. In 1957, a Chicago lawyer named Jay Pritzker purchased and opened the Hyatt House, a motel near LAX. Hyatt has steadily expanded since then into one of the largest companies in the hospitality industry, built in part by veteran CEO Mark Holomasian. This is our founder. Yes, right, Jay Prisker. Yeah. Since stepping into the role in 2006, Hoelmazian has led Hyatt through an IPO, managed the company through the turbulent. COVID-19 pandemic and more than tripled the total number of branded properties in Hyatt's worldwide portfolio. Today, Halomasian is steering Hyatt through the later stages of a massive brand reorganization centered around an asset light strategy. This means selling real estate and transitioning to fee-based revenue streams. These might include earnings from managing and operating hotels or licensing properties to franchisees. In 2025, 80% of Hyatt's profits came from this kind of fee-based revenue, up from just 57% in 2019. And by the end of the year, the company had reached its goal of raising $2 billion in physical asset sales. Hyatt aims to have over 90% of its earnings be asset light by 2027. During your time as CEO, you led Hyatt through what's called an asset light transformation. Why did Choose to do that and what has been the impact of it. It really focuses one's attention. Instead of splitting your attention between being a great property owner and asset manager and a brand builder, we are now really focused on brand building and investing in the brands and the technology platform behind that. So you're really now you're much more focused on talent and marketing and public messaging without necessarily having to worry as much about plumbing, parking, maintenance. You're right. Halimasian and Hyatt's brand strategy organizes the company into 5 distinct brand groups luxury, lifestyle, inclusive, classics, and essentials. Luxury includes some of Hyatt's most upscale brands like the Park Hyatt, while essentials brands like H Hyatt Studios offer a more straightforward business hotel type experience. Marriott and Hilton, both of whose property and financial portfolios are considerably bigger than Hyatt's are also going asset light. In fact, both started their transitions to an asset light model before Hyatt. In order to differentiate itself, Hyatt is leaning into one of the fastest growing sectors in the industry, luxury travel. I think in your Q3 report, the company mentioned that it seemed like from the consumer side, the luxury and lifestyle segment was the one where the demand seemed strongest, where economic threats seemed least. Is that still the case? Do you still feel like luxury is where the growth is going to come from? Absolutely, we have the biggest representation proportionately speaking in our portfolio of luxury and lifestyle versus our competitors, so we've been advantaged during this period of time when luxury has been the strongest segment. I think 26, no matter what happens, the so-called K-shaped economy is going to persist. That doesn't make me happy, by the way. We have to recognize that that's what's happening. And so I do think that luxury will be the highest performer. And this is a very big change in psychology. Hyatt is already a leader in luxury travel. More than 70% of Hyatt's rooms are luxury or upper upscale compared to Marriott at 51% and Hilton at 28%. Since announcing its asset light strategy in 2017, Hyatt has acquired around 10 luxury and upscale hotel lines, including Mr. and Mrs. Smith and Dream Hotel Group, to add to its brand groups. It's a vibe, right? Right? Exactly. It is a vibe and it's a stunning vibe. Yes, it is happening today too, isn't it? Laurie? You're the first global executive I've ever interviewed in front of a basketball hoop. Where are we? What is this place? Yeah, isn't it great? We are in the Chicago Athletic Association. It started as a men's club in the 1890s, has been reimagined as a hotel, and came into the H Hyatt portfolio in 2019. I've got the beautiful Gothic architecture and the crazy carvings. I do not see a Hyatt logo anywhere. Is that intentional? And if it is, how come? Yeah, for this hotel, the Chicago Athletic Association, it is part of the Unbound collection. And what is special about the Unbound collection is every property is unique and historic and tells its own story. May I see the ballroomhould we go check it out? Can we see the ballroom? Let's go to the ballroom. Younger consumers are spending on experiences. This is. The White City Ballroom we're working on curating different types of collections of properties that will tailor to more romantic travel or outdoor luxury travel. It's not a one size fits all anymore. It's these really specialized experiences. I know that the past several years on the branding topic that there have been some really key acquisitions for H Hyatt, especially in the luxury space. Bringing in other brands into the portfolio where from a customer's perspective we're not necessarily going to know about the Hyatt affiliation. How does that sort of change the challenge of maintaining the focus of the company? We have over 62 million loyalty members and the program has been extremely healthy. It's been growing at a 20% compounded growth rate in the last several years straight. When we designed World of Hyatt, it was designed as an experience platform, not as a points program. A lot of loyalty programs are basically The transactional in nature and we wanted it to be something that was actually meaningful to our members. Yes, it's points. It includes points, but we view points as a means to an end that's not just a room night but an overall experience. When you talk about points being about experiences as well as loyalty, does that mean in practice that the points can also be used for things outside of just the stay? We launched a world of Hyatt find experiences also about. Two years ago now and we have experiences on properties we have experiences that we call limited time experiences. What are some travel trends that you're thinking about that are sort of specific to 2026? New things coming down the pike or things that you're going to see expanding? Experiential travel is not slowing down, whether it's for sporting events. We've got some big ones coming to the US, whether it's music or these more niche things are really. Unique one that we launched was with Reese's Book Club. We brought the authors of the month and we hosted reading retreats as part of an outdoor luxury collection experience. So something that we're seeing with travel is in not just experiences but these sort of niche experiences as the brand portfolio expands with the kind of acquisitions you've been describing, how do you make sure that the experience. The customer and that the company's values are consistent across these platforms, especially when some of these platforms to a consumer may not even be recognizable as a Hyatt. If you understand what people actually need, then you can actually appropriately care for them. So that is at the foundation and the core of every single touch point that you would experience across the Hyatt offerings across every brand, across every country, and across all the other experiences. In order to better recognize and deliver these experiences, Hyatt is investing in AI and in-depth data analytics and building personalized intent-based search tools configured around users' individual travel preferences. How do you keep a sense of brand and company identity consistent across experiences in a world where AI is playing a bigger role perhaps in connecting your customers to you? We characterize AI as an augmentation of how you can get closer to your customers, removing a bunch of the administrative tasks that our frontline colleagues are actually burdened with currently. It gives them more time to just be human, human to human interaction. There is so much new technology that helps us to deliver really personalized and tailored content, and now we can speak to you as an individual differently than the next member. The other thing it allows you to do is capture information on that individual that you would never otherwise be able to get true fidelity of information about Matt and his family so that we can better care for you in the future. You became CEO in 2006, and that means that this bare wall that we're walking towards is going to be the wall that gets the next chapter. What are the things that you most want to see on that wall? We've changed the profile of the company and now the launch point from this point forward is how we actually corralling and using the best of technology to continuously make our colleagues' lives easier, make our guests' lives better, and how we can care for more people.

Crate & Barrel is evolving from a home furnishings importer into a multi-hyphenate design, B2B and AI-assisted powerhouse, with plans on expanding its retail footprint while using new technology to change the way customers shop online. As geo-political shakeups in trade and supply chains challenge the businesses’ operations, CEO Janet Hayes says the company is focusing on offering high quality products to forge ahead.

Crate & Barrel Wants You To Know They Are Much More Than Crates & Barrels | Behind the Business

I would have never believed if someone said 5 years from now the company is going to grow over 55%. You're going to triple the bottom line. Long known for wedding registries and modern home decor, Crate and Barrel has grown into a $2.5 billion powerhouse. We've been Reinventing our retail fleet and really doubling down and investing now against a backdrop of tariff headwinds and supply chain volatility, the company is focused on new consumer touchpoints and delivering tech-driven speed under the leadership of CEO Janet Hayes. As the next generation buys fewer homes and online options multiply, how can Crate and Barrel win in the consumer wars? You can see this kind of iconic picture here of the crates and barrels and hence the name started to form. Somebody walked in and said, What's the name of the store? And they just kind of said, I think it's Crate and Barrel, and that's where the name came from. Crate and Barrel was founded in 1962 by Gordon and Carol Siegel as a way to bring Americans high quality home furnishings from around. The world. This is what we call our atrium, which I think is so beautiful. It has since expanded into a multi-hyphenate brand, offering design services, catering to kids, and curating gifts. The German retail company Auto Group bought a majority of Crate and Barrel in 1998. By 2011, Otto Group was Crate and Barrel's sole owner. Despite revenue losses for Otto Group this year, Crate and Barrel was a significant driver of the company's positive earnings. Janet Hayes took the helm in August of 2020, 1 of the most uncertain times in the company's history. In the five years since, they've dealt with three major crises a global pandemic, supply chain turbulence, and the current geopolitical pressures of tariffs. Each time we come out stronger, I would have never believed if someone said five years from now the company is going to grow over 55%. You're going to triple the bottom line. A key part of Hayes's strategy has been in diversifying the company's customer base, growing various streams of revenue while staying focused on Crate and Barrel's core brand identity. Can you walk me through each of your brands and give me a sense of which ones are your biggest revenue drivers? Uh, we'll start with the Crate and Barrel brand. That brand I think most know, and if you ask someone on the street, they'd. Probably pull up a really warm memory of oh I registered there it starts kind of at the beginning of that registry and has grown into quite a big brand and then there's CB2 which is going through in my opinion, a really beautiful evolution. It's much more kind of design focused than crate and barrel, meaning appealing to the trade. They don't have in-house design. They use designers around the world. Then there's Crate and Kids kind of fulfills a couple of rooms in the house that we weren't kidding and really has an aesthetic that matches the crate brand. We also have Hudson Grace, which is a really beautiful, entertaining, and gift brand. And then we are bringing up a couple of other new brands as we are talking, not allowed to be out yet. The company is now doubling down on these 3 pillars. Investing in new technologies, expanding its retail footprint, and broadening its customer base beyond the individual consumer. What will come up pretty big in the next couple of years is our B2B business and our franchise business expanding globally. Oh, tell me about those. So the B2B business one I'm really excited about, we're one of the few companies that can do a whole home or a whole restaurant or a whole hotel from our brands and deliver a really different aesthetic. When you start to put all the different brands together, when thinking about the retail home furnishing landscape, a lot of different players out there, of course, you know, you associate IKEA with like the affordable, accessible designs, restoration hardware, the luxury. What lane do you really want Crate and Barrel to own? We need to be known as beautiful quality, beautiful products, and reliable service, and I think that is how we will win. Oh, this is gorgeous. Yeah, so over the past few years we have been making a lot of evolutions to the brand in order to drive growth. Crate and Barrel is rethinking their retail strategy, including customer experiences like Shop and Shop, offering free in-house design services, and appealing to local markets. In the Chicago market, we love chili, we love football, we love beer, we're simple people. Obviously you're constantly seeing all this data from customers. Was there ever any insight from a customer about a specific product that really changed how you either designed it or imagined it in a store? An example I would give you is our. beds. What we heard is that there weren't enough choices. They want a custom fabric on the kids' bed too. We have a bed that we love and we brought it into a local factory and we're able to customize and put the whole custom wall against it so designers can pick from all of the fabrics that we just saw together in the design desk that came from a customer. In the next 5 years, Crate and Barrel plans to expand their retail footprint. 45 to 50 new stores will be popping up in new cities across the country. Tell me more about doubling down on the physical retail expansion. Why now? Why a time when other people are maybe shying away from it? We are in a really beautiful position of not being overs stored, but we also hadn't really dreamt of a new storm model. And in the last 5 years we have put a new storm model out into. The United States market. In fact, we just opened our 7th, and they are proving to be incredibly lucrative and efficient and giving great service and inspiration to the customer. What we did is reinvented the idea of it to be about 40% smaller, one floor, so you can really see the whole home when you walk into one floor, and the customers love it. But those ambitious plans for expansion will be happening against the backdrop of geopolitical changes which are setting up supply chain challenges once again. President Trump posted to Truth Social announcing a new round of tariff hikes targeting six additional countries. Hayes says she's well positioned, having laid the groundwork in her early days of leading the company during COVID. What it was like felt like day to day, hand to hand combat, but What we were doing was really preparing us for the future. How are you dealing with the current instability? Have tariffs affected you in the business at all? They have, I think most CEOs probably anticipated that there would be some geopolitical disruption as a new administration took place, but I think at the speed and the magnitude that it is happening with the tariffs, I don't think probably a lot. CEOs anticipated the company's workload. We've moved business back to the United States where applicable, and I'm happy with where we're moving, but it is not to be underestimated how difficult it has been. On day one that this tariff news came through. I called everyone together and said, do not make a fast move. Quality is our main objective. Crate and Barrel has also used AI to help tackle supply chain challenges. We are anticipating and executing embedding AI into the business across all of this new technology, so it will and is embedded into the supply chain now and we're already seeing efficiencies and gains and being able to coordinate orders faster and more complete for our customers. In 2023, you made this big new tech announcement. You walk me through what exactly that was and since then what you've implemented in terms of this new tech. It all started a little bit before 2023 when our growth, I said we found kind of some cracks in the foundation and so we pulled together an investment roadmap led by technology to deliver a new warehouse management system. labor management system, transportation management system. We had dreams of a new point of sale system in the stores that started to connect that data and then a website that desperately needed to be updated after years. In addition to the back-end systems, Hayes is implementing new consumer facing technology, giving a whole new meaning to online shopping. We have all different kinds of customers, and some of them are very tech savvy, don't want to go in the store, don't want to interact, but still might need help and want to shop in new and different ways. Hence the virtual store. Do you see a world on the consumer side in which a consumer could say design an entire home or a portion of their house? Using AI and never have to step foot in a store, or do you always think that we're going to need these physical spaces? I think we're going to need the physical spaces. If anything, we have to keep asking that same question to ourselves every day. What makes that physical space relevant for the customer in the future? As Hayes positions the brand for the next generation, it's her approach to both the physical and digital spaces that she hopes will set Crate and Barrel apart. Your youngest consumers Gen Z, Gen Alpha, these digital natives who I think sometimes flock to these more digital only brands, how do you plan to encapsulate this new generation of consumers who are so used to online first and, and do you have a plan for, for the next generation of Crate and Barrel users? We believe very. Much an online first and actually the large majority of our sales are online. We're very digitally dominant. I don't think that that generation wants things that are coming at them en masse. That's what they're telling us. So we've got to personalize not only their shopping experience but their marketing experience. We've got to pay attention to what they're doing in social channels and we will. We're going to develop much more. rich content if it's how to decorate, how to cook something, how to pull something together, we owe them more content than we're giving them right now and that will come. But I think at the end of the day it won't differentiate service. How they want to receive it and when they want to receive it is again something we need to listen to and anticipate and be ready to react to.

Facing brand dilution and declining wholesale sales in the 2010s, Ralph Lauren has sought to reinvent itself and win over a younger generation. Under CEO Patrice Louvet, the company pulled back from heavy discounting, doubled down on its own stores and digital platforms, and refocused on core values like authenticity and timeless design. Today Ralph Lauren is seeing renewed growth, topping $7 billion in revenue the first time in nearly a decade. Fortune's Phil Wahba sat down with Louvet to learn about the strategy behind the turnaround.

Inside Ralph Lauren’s Big Comeback — And How it Won Over Gen Z

We had lost touch with the younger generation, and a lot of the questions I got when I started was, is Ralph Lauren still relevant? For years, Ralph Lauren leaned heavily on discounts and overexpansion, eroding the exclusivity that built its name. But in recent years, the company has worked to overhaul its strategy and win over a younger generation. Now the brand is back in the cultural spotlight from the US Open. To elaborate fashion shows and even a viral Taylor Swift dress moment. So Taylor Swift's dress that she just got engaged in is on sale for Miles Lauren for under $350 right now. For the first time in nearly a decade, the company's revenue topped $7 billion and growing segments like women's apparel are taking off. percent of our shoppers and stores online are actually Whitman, and now Ralph Lauren is looking ahead, experimenting with AI. If we can figure out how to do what we do better with the aid of technology, fantastic. Here's how Ralph Lauren pulled off one of fashion's biggest turnarounds and what it takes to stay relevant in a rapidly shifting luxury market. Here on Madison Avenue sit two of Ralph Lauren's most iconic flagship stores. The sprawling retail locations carry men and women's polos, sweaters, and other preppy mainstays the brand is famous for, alongside growing segments like handbags, outerwear, and luxury home goods. Since taking the helm in 2017, CEO Patci Cove has doubled down on Ralph Lauren's roots while expanding into new categories and rethinking the retail experience. Let's talk a little bit about the branding because here we are in in the mansion, it's opulent, it's luxurious, it could seem exclusive, but in fact it is welcoming. So can you tell me a little bit about how the company manages that balance of being luxury and high-end but without being, you know, unfriendly? Well, about philosophy from the beginning has been this concept of Inspiring the dream of a better life irrespective of where you come from, what your income level is. And so our price ranges today go for, you know, a pack of tennis socks that might be $15 all the way to, we recently sold a $320,000 watch. We want to create an environment that's aspirational but engaging and inviting, right? And this notion of inclusive luxury is really important to us. You have 15 year olds coming in here. And you have billionaires, but Ralph Lauren's luxury empire didn't start this way. In 1967 from a small office in the Empire State Building, Ralph Lauren launched Polo, wide, colorful neckties that stood out in an era of thinner styles. Over the next two decades, Ralph Lauren branched into full men's and women's collections. And created cultural touch points like outfitting Team USA. By the 2010s, the company was stretched too thin. Ralph Lauren was suffering from brand dilution with excessive discounting, multiple sub-brands, and an overreliance on struggling department stores. By 2018, revenue had fallen more than 16% in just two years. The Ralph Lauren story was growing by leaps and bounds for years, and then One could argue it overextended itself. What was your feeling about how to address that? Yeah, I think it happens to a lot of companies across industries, right? Great success, high expectations of continued great success, and when there's pressure like that, there's a temptation to broaden distribution. There's a temptation to increase promotional activity. I think of it as the boiled frog phenomenon, which is you say, just do a little bit, just a little bit more. It'll be fine. It won't impact us overall. But as you do more and more of that little bit, ultimately you're damaging the brand. Our challenge was here in the US where we went too broad, we were too promotional, and um we had to pull back. And yes, it's painful, but it's mandatory. Now Louve is steering Ralph Lauren into an era built on brand elevation. In recent years, the luxury brand has sharpened its focus on core products, attracted younger customers, improved the shopping experience, and pulled back from its heavy. Reliance on discounts and wholesale. So far it appears to be working with margins rising and revenue at a 9 year high. How did you get young people on board with this brand? We did a lot of work to understand what was relevant for the younger generation, where they wanted to shop, how they wanted to engage. Which values matter most to them and what we're finding is the Ralph Lauren values of authenticity, family, optimism, quality, timelessness, those resonate with that younger generation, and they resonate with that younger generation here in New York or in Shanghai or in Milan. Ralph Lauren reinforces those brand values through experiences from in-store coffee shops designed to draw in younger shoppers to long running sports partnerships that spotlight the brand. G's partnership with the US Open started 20 years ago. Wimbledon Australian Open, the Olympics. So if you look at where we are now, what we're finding is we want to celebrate what's on the court, but actually the thing that's most interesting is showing style in the audience, or the fans and how the fans dress and and how the styles varyond sports, Ralph Lauren shows continue to lean into spectacle. The 2024 Hampton show turned equestrian stables into a runway with supermodels Christy Turlington and Naomi Campbell walking before a celebrity packed crowd. At the same time, Ralph Lauren is wrapping up marketing and sharpening its retail strategy. In 2022, it singled out 30 global cities as key markets. It's fueling that push with its largest ever marketing budget, over half a billion dollars. There are a lot of cities in the world, there are, um, and a lot of cities that have a lot of shoppers. 30 only hits obviously a very small portion of it. What's the rationale for that? I think our experience and when you look at the industry. when you overextend yourself, you end up diluting the brand, you end up diluting your resources and therefore you end up diluting your performance. So listen, we're, we're not here for another quarter. We're not here for another 3 years. We're here for another 50 years. So we have plenty of time to go hit the other cities in the world. China for me is a wonderful example. I think there's still a lot of growth to be had in Shanghai, Beijing, Shenzhen, Chengdu, Taipei, Hong Kong, right? Those are massive cities, tens of millions of inhabitants. Once we feel like we're fully established, then we'll continue to drive that business and then we'll start to open the white space. You dilute yourself. You might see the benefits short term, but, but ultimately, it impedes your ability to perform consistently. Clothing and fashion, by definition, there is the risk of misfires. Tell me a little bit about for you, where's the balance between not playing it too safe, but also not going crazy with wild stuff that could flop. So we have the benefit of decades of Presenting core items that consumers know and recognize really well. Our cable knit sweaters, our polo shirts, our Oxford shirts, right? Our tree jackets, like quintessential RA one. That's job one. Job one is how do we continue to present that, animate that, engage the new generation with these types of products, right, and this ability to leverage our core products across generations, I think has served us really well. Women's wear and handbags have also become major growth engines. Women's Wear alone now brings in about $2 billion a year, and in the last fiscal year, Ralph Lauren's bag sales jumped by a double digit percentage. 56% of our shoppers and stores online are actually Whitman. It's less than 1/3 of our business. So for us it's a massive opportunity. Within that, we realized that the handbag category was significantly underdeveloped for us. It's part of the overall lifestyle, and we've gotten some really nice traction behind some of the more recentensitization. These moves have helped Ralph Lauren sidestep the challenges facing much of the luxury market. In 2024, the luxury industry saw its first major slowdown since the Great Recession, as shoppers questioned whether high-end fashion still delivered on quality and creativity. Luxury giants like LVMH, Burberry, and Caring all missed revenue targets that year. While some companies responded by pushing prices higher, Ralph Lauren says it doubled down on its core values. What do stores need to be for you? What does a typical Ralph Lauren store have to? Do to really justify its existence. It needs to be an experience, right, because I can get the products online. It needs to be a place where, you know, you, you, you want to come, you want to discover it, you want to have an amazing engagement with sales associates. You want to discover the different dimensions of the raw For lifestyle. You might not buy the first time, but you'll come back and want to feel that. And that's the bar that we set for ourselves. Like many companies in the luxury retail space, Ralph Lauren is also experimenting with artificial intelligence. We dreamt of the day when we'd be able to do something like this. That's David Lauren, the company's chief branding and innovation officer, and the son of founder Ralph Lauren. In September, he helped launch Ask Ralph, a generative AI shopping tool that lets customers ask style questions and get product recommendations. David, tell me a little bit about Ask Ralph, the AI style assistant. I mean, how long have you been working on it? What customer did you have most in mind when this was being developed? Yeah. Well, the idea for Ask Ralph really started 25 years ago. We launched Ralph Lauren.com, which was really the first luxury fashion website. At the time, we had a sort of archaic version of Style Guide, where Ralph Lauren himself actually answered style questions and it was very popular. When you get dressed in the morning, clothes help give you a sense of confidence, a sense of identity, a sense of who you are and who you want to be, and the ability to pull out of your back pocket. You know, a companion to help give you that sensibility is Ralph. So literally our dream one day is that Ralph himself will be using this to gut check an idea. The company says that what sets this tool apart is its use of Ralph Lauren's full inventory to suggest complete brand approved outfits. Ask Ralph can answer prompts and offer curated looks pulled directly from its collections. Do you see this as a tool that in-store employees could use as they help a customer as well? I think the goal of this is to not only help our our customers, but to help our own employees. The better educated our team can be, the more consistent our voice can be all around the world, the more valuable it's going to be. In many ways. Ask Ralph is a new employee. Even as Ralph Lauren regains its cultural cachet, the wider fashion industry is battling economic headwinds. Shoppers are becoming more price conscious, especially in the US, where discount and value-focused retailers like TJ Maxx are thriving. That pressure has forced Ralph Lauren to rethink how it reaches customers. During COVID, Love leaned into his strategy to open more Ralph Lauren stores and continue exiting weak department stores. As for supply chain, it now stretches from Vietnam to Peru, and the brand is well positioned to weather global trade disruptions, including tar force. Before all the terrorist drama of 2025. Ralph Lauren had done a lot of work to not be too reliant on the same suppliers. Can you tell me a little bit about what that looks like now and what was the rationale for doing that? We were very dependent when when our team started some 89 years ago on A few geographies from the sourcing standpoint, uh, and a few suppliers. And in an environment that's uncertain and volatile, you cannot do that, right? So significant diversification. Now, there's not one market that's more than 20%. We generally have dual sourcing, if not triple sourcing. Across our entire portfolio. The other piece is agility, and I don't think people would have used the term agility to describe Ralph Lauren 10 years ago. And I think in a world that's so dynamic, the ability to be nimble, move production from market A to market B, and I'm actually really proud of the work that teams have done on this one because I think agility is a is a unique strength. Ralph Lauren Ralph Lauren also carries the weight of being a symbol of Americana at a time sentiment abroad towards the US is shifting. Despite these pressures, Ralph Lauren continues to anchor itself in the vision laid out by its founder. So I want to ask you a little bit about um your working relationship with Mr. Lauren himself. Tell us a little bit about how you work with him. Ralph and I spent a lot of time upfront, making sure we're on the same page, making sure we had a consistent ambition for the company, making sure that we valued the same things, value with a big V, and making sure that we were all, we were going to push the same direction. And we talked about what business are we in, right? Because I think that's a fundamental question for all companies is just clarity on what business are you really in. And we concluded that we were in the dreams business, not in the apparel business, not in the fashion business, we're in the dreams business.

Wayfair thrived during the pandemic, scaling to over 30 million products and rising to #217 on the Fortune 500. But after a post-COVID slump, it’s rethinking its strategy. In 2024, the company opened its first large-format retail store and rolled out new AI tools to reimagine how people shop for their homes. Here’s how Wayfair is betting on technology and in-person retail to power its next chapter in a crowded home-goods market.


How Wayfair’s Betting on AI to Future Proof its $12B Empire 

Wayfair is betting big on AI and physical retail to reconnect with shopper

Tech

Wayfair thrived during the pandemic, scaling to over 30 million products and rising to #217 on the Fortune 500. But after a post-COVID slump, it’s rethinking its strategy

How Wayfair Built a $12 Billion Home Retail Empire 

Wayfair built its multi-billion dollar business by selling home goods online, eventually scaling to more than 30 million products. Today, it's the largest online home goods retailer in the United States, but after a pandemic boom in sales, growth slumped, and so did the company's stock price. Now Wayfair is pivoting. In 2024, it stepped into physical retail with its first large format store. At the same time, it's betting on AI to streamline operations and reimagine how shoppers discover furniture. So we've been using the sort of text to image generation capability to generate an AI to be able to showcase a whole bunch of different images that our customers can then react to and say, oh, I like this. Here's how Wayfair built a $12 billion home goods empire. And how it's using AI and big box retail to fuel its next chapter. Founded in 2002 as a network of niche furniture sites, Wayfair evolved into a sprawling online marketplace. It now offers over 30 million products from around 20,000 suppliers. It also runs a lineup of lifestyle and luxury brands. The main basic difference between Wayfair and some of its other home furnishing competitors is that it is a marketplace platform, so they don't own any of their inventory. Everything is just forward position. on their site so that consumers can use it from the many vendors that they work with. Unlike many of its competitors, Wayfair doesn't manufacture or own its inventory. Instead, it connects shoppers with third party suppliers. This dropship business model allowed Wayfair to scale quickly, offering an enormous product catalog while keeping fixed costs low. Having these relationships with some of these smaller vendors is really unique in that it's a More visible way for the vendors to reach a much broader total addressable market. It helps elevate the business of small vendors while it also helps provide more choices to consumers for Wayfair. During the pandemic, that model helped the company thrive. Sales surged by 45% in 2020 as consumers redecorated during lockdowns. The next year, Wayfair shot up the Fortune 500 rankings, climbing more than 100. 30 spots to land at number 217. When we look back at COVID, that clearly accelerated e-commerce adoption across a number of categories, things like grocery and furniture. We saw the share price really rise to around $350 a share, but post-pandemic demand cooled as interest rates climbed and inflation pinched household budgets. Spending on big ticket furniture slowed. Wayfair's stock lost over 80% of its. between 2021 and early 2023, investors realized things are going to reopen. People are traveling. They're eating at restaurants again, and it wasn't idiosyncratic to Wayfair. It was across the industry, right? All of the peers really saw that phenomenon. Major home retailers like Bed Bath and Beyond filed for bankruptcy in 2023, shuttering hundreds of stores around the country. Despite declining sales post pandemic, Wayfair was. A to weather the market volatility. You know, if you look at somebody like Bed Bath and Beyond, there were liquidity issues. Interestingly, despite the fact that really Wayfair isn't generating a whole lot of profitability, the way that the capital structure works is that they don't really need that same sort of liquidity. But as the online home retail market has become more crowded, Wayfair is looking for ways to improve its e-commerce model and its customer experience. So we've been applying AI for quite some time, probably over a decade. The more recent advancements are allowing us to take that to yet another level. Fiona Tan is Wayfair's chief technology officer. Over the last few years, she has helped lead the company's investments in AI. It's a category where it's hard for our customers sometimes to describe what they're looking for. And then sometimes they don't really even know what they're looking for, so we've been using the sort of text to image generation capability to generate a AI to be able to showcase, you know, a whole bunch of different images that our customers can then react to and say, oh, I like this. I didn't know, I don't know what it's called, but it speaks to me. In 2025, Wayfair debuted a generative AI platform called Muse. The tool allows shoppers to curate AI generated home designs in certain styles. From there, the platform will recommend Wayfair products that fit the look. And then you can even tailor it a little bit more and just say, OK, well I like this, but I prefer green chairs instead of beige, and as you interact with muse, it'll generate you another image based on what you're saying. As the customers are inspired and engaged more with us, we're able to discern better what the intent and what their style preferences are, maybe what the budget preferences are, and then it allows us. And then recommend products for them. Waver says that level of personalization may help reduce return rates by giving customers more confidence in their purchases because the customers are more confident of the products that they buy or they've been able to get more information about it, ideally what you also see is there are fewer returns, right, because you're able to help them make um more. Informed decisions. Behind the scenes, Wayfair's legal, HR, and finance teams are also using AI to process data faster and streamline operations. For example, our legal teams using it to be able to look at, you know, user reviews to look for items that may have caused any kind of injury, and then you'll have examples in the technology department. Our accounting and finance team is also leveraging it. So it's really across the enterprise. While AI is helping to streamline Wayfair's digital operations, the company is also testing a more traditional strategy opening physical stores. In May 2024, Wayfair opened its first large format retail store in Wilma, Illinois, just outside of Chicago. The 150,000. A square foot store features showrooms, interior design services, and a cafe. Instead of spending marketing dollars on digital spend, you're spending your marketing dollars on physical spend. While competitors like William Sonoma benefit from built-in visibility through their retail locations, Wayfair has had to rely more heavily on advertising. every, every home. In 2024, they spent about 12% of their net revenue on advertising, while competitors like William Sonoma spent about 7% and Restoration Hardware only spent 4%. Wayfair leans into advertising a little bit more because it's hard to remain visible when you're an e-commerce only retailer, right? And so, You know, reminding consumers that you exist isn't free. Wayfair's new store location sits strategically along a major commuter highway. Since the opening of the store, Wayfair says sales in Illinois have jumped around 15%. Based on early results, Wayfair plans to open two more large format stores, one in Atlanta, Georgia and another in Yonkers, New York. Still, when it comes to home goods, Wayfair operates in a competitive and fragmented landscape. While the company holds the top spot for largest online home goods retailer in the US, it's only by a small margin, very fragmented, very hard to have a competitive advantage. We think Wayfair is one of a number of competitors that are really struggling. To avoid discounting and reinvent themselves in different ways to remain relevant to consumers. Big box retailers like Walmart, Target, and IKEA all sell home goods with the added advantage of physical stores, tight logistics, and brand familiarity. Other high-end home goods companies like RH and Pottery Barn offer in-person shopping that build a more luxury customer experience. It's a lot easier to be top of mind when you are a pottery barn in a mall or a RH that has a freestanding store and a restaurant, and it's an experience, but we. moves into brick and mortar stores and AI are helping to close that gap. So one of the capabilities again of AI and also generative AI is our ability to understand, have a deeper understanding of the products that we sell, discerning the color, the size, dimensions. Some of it's in the product details, sometimes there may be errors and it can also augment and enrich the information. That we get from our suppliers, so we're doing a lot in the customer experience. I do think AI will help young people sort of get their head around how they want to plan their smaller spaces, but also, you know, the accessible price points that is that Wayfair offers also helps bring those consumers in, and I think that a lot of that is their their main consumer.

Fortune sits down with Keurig Dr Pepper CEO Tim Cofer to explore how the $15B beverage giant is outpacing rivals like Pepsi. Cofer breaks down the company’s bold strategy—expanding in energy drinks, innovating in coffee with plastic-free K-Rounds, and navigating inflation and tariffs. Here's how KDP is rewriting the rules of the beverage business under its new leadership.

How Keurig Dr Pepper's $15B Empire Beat Out Pepsi

Fortune sits down with Keurig Dr Pepper CEO Tim Cofer to explore how the $15B beverage giant is outpacing rivals like Pepsi. 

You may not know it, but all the drinks here are owned by just one company, Keurig Dr. Pepper. We have a dawn to dusk portfolio that literally covers every demand space and every need that a consumer has in terms of beverages. KDP generated $15 billion in revenue last year. We put the consumer at the center of everything we do here at Keurig Dr Pepper with both legacy brands. Like Green Mountain and newer brands like Ghost Energy, they've invested a lot to keep up. What up y'all? I got my hands on the new Dr. Pepper BlackBerry. Let's try this. Having that relationship with the consumer, understanding what's important in their lives, understanding the cultural moments that really define that younger generation, Gen Z. and then tapping into it in a very authentic one of a kind way. Smash or pass. Classic Dr. Peppermash. And though Dr. Pepper just overtook Pepsi as the 2nd best selling soft drink in North America, their coffee business is cooling off. Can Keurig Dr. Pepper re up another wave of growth. Yeah, this is one that I really like, although I always get the bottles. The big news is that Dr. Pepper has just gone to #2 among all soft drinks. The milestone that you just referenced is one that's been really years in the making. I think it's a combination of many factors. I point to innovation. I'd point to marketing and sales excellence. This is a brand unique, one of a kind, oldest soda brand in America since 1885, but a really unique personality. In 1885, 1 year before the birth of Coca-Cola, a pharmacist in Waco, Texas famously mixed 23 soda fountain syrups in an experiment to recreate the drugstore's aroma. The blend became Dr. Pepper. Fast forward 140 years, the soda is one of the most popular in North America, and in 2018, Keurig Green Mountain and Dr. Pepper Snapple Group merged in a nearly $19 billion deal to form Keurig Dr. Pepper. All right, here's some cold beverage. Let's look at some of these. Today the Beverage Powerhouse has over 125 hot and cold drink brands, and in recent years, Dr. Pepper has seen a surge in popularity. Y'all, we can make us a dirty soda. Let's make a dirty soda just like the Mormons do. Dirty soda. It's been a thing in Utah for years where people started spiking soda with everything from cream to flavored syrup. Delish. All right, that's it. Goodbye. You have appealed to a much younger audience here. Was that an intentional strategy? How did that happen? We put the consumer at the center of everything we do here at Keurig Dr. Pepper, having that relationship with the consumer, understanding what's important in their lives. Understanding the cultural moment really defining that younger generation Gen Zennials, that was kind of the impetus of us picking up on this dirty soda trend and that allowed us to drive that great new innovation really winning marketing across the patch. Here's our ghost lineup C4, that performance brand, fitness brand, Bloom, a more female forward brand started by a young lady and then Black Rifle veteran focused. The energy drink market has exploded in recent years, fueled by a younger demographic, wellness trends, and a demand for functional beverages once dominated by. Red Bull and Monster, the category is seeing new players. Cur Dr. Pepper, historically absent from the core energy segment, is now making strategic moves to catch up. What we saw a few years ago is an opportunity to continue to shape our portfolio in a way that would be more growth accretive. We love our position in carbonated soft drinks. We knew there were other verticals like energy, like sports hydration, where we had an opportunity to participate more meaningfully. And so energy is our is our latest big bet. 3 years ago we were nonexistent in energy. Today we have over a 6 market share, and I have an ambition to be a double digit market share player here in a couple of years. One of Keurig Dr. Pepper's competitive advantages is DSD, its direct store delivery network. While many beverage companies rely on third party distributors, KDP owns and operates a vast logistics system that delivers products directly to retail shelves. In the beverage industry, DSD direct store delivery, is a scarce asset and it's a critical asset because the consumer is looking for that beverage wherever she shops and needs it right then and ideally needs it cold, right? So DSD direct store delivery is a big source of competitive advantage and it's one of the reasons why we attract so many partners, partners who might not have that critical distribution. One of the highly unusual things about the company was the combination of hot and cold. What power did you see in that combination? You know, I'd start once again at a consumer level. We have a dawn to dusk portfolio that literally covers every demand space and every need that a consumer has in terms of beverages. This is one of our newest brewers in terms of the intersection of hot and cold. This is called the K Brew and Chill. This is the first brewer that actually makes cold coffee to the touch. As COVID began, KDP used data from home coffee makers to foresee a spike in demand after a sudden shift to the stay at home economy. The then CEO ramped production and secured big shipments of cans well before rivals saw the way of building, but as more Americans returned to offices and cafes, demand for at-home coffee began to soften. We love our coffee business. We have over a $4 billion coffee business, and coffee remains today a ubiquitous category. In fact, coffee is second only to water as the most consumed beverage today. Indeed, to your point, however, of late, you've seen coffee under pressure, and so we're really playing the long game on coffee. Coffee will come back and when it does, we're going to be really well positioned to capitalize it, including a revolutionary new system that we'll be launching here in the next year or so. So this is KA Sean, the new system. This is obviously a prototype we're actually just went into beta testing in consumer homes. No plastic, no aluminum, 100% coffee you can. I mean, smell that. That's just nothing but coffee. With a plant-based coating. We're disrupting ourselves with a sustainable option that is plastic-free, aluminum free K rounds. As the beverage landscape evolves, Keurig Dr. Pepper is betting that a diversified portfolio and a powerful distribution engine will keep it competitive even as consumer tastes continue to shift. Give that a try. So it's your favorite ginger ale with a real splash of cherry juice. It's terrific.

Adobe is going all-in on AI, integrating generative and agentic tools across its Creative and Experience Clouds. As the company shifts its strategy, creative and marketing professionals—especially newcomers—face growing pressure to keep up. Here’s what Adobe’s AI push means for the future of creative and marketing work.

Adobe’s Secret Weapon in the AI Race? Trust—and Millions of Subscribers

Adobe is doubling down on AI by integrating generative and agentic tools into its platforms. 

Uncategorized

Adobe is going all-in on AI, integrating generative and agentic tools across its Creative and Experience Clouds. As the company shifts its strategy, creative and marketing professionals—especially newcomers—face growing pressure to keep up. 

For decades, Adobe set the standard in creative software. Tools like Photoshop and Premiere helped define entire industries and shape creative careers. But in recent years, the company has been staking its claim in the fast moving world of artificial intelligence by embedding generative and now agentic AI directly into its legacy products. And creators are noticing Doby's new AI called Firefly. They've done a very good job of taking that loyal following and producing Gen AI in the format that most of those developers have been used to. And Adobe's ambitions don't stop at creative software. The company is now releasing AI tools that are transforming how global brands deliver marketing campaigns. But these transformations across the industry are raising tough questions about AI's role in creative fields and who benefits from this new era of automation. Junior creatives are being pressed by the market to react in AI timing, which is light speed. Here's a closer look at how Adobe is adapting to the AI era and how it's helping to shape the future of creativity and marketing. For years, Adobe sold box software like Photoshop, Illustrator, and Premiere for a flat fee. That changed in 2012, when it moved to a subscription-only model with Creative Cloud. Definitely a cloud. Subscriptions gave Adobe a steady predictable revenue stream and allowed it to update products continuously. They've moved from where you buy the product and then can use it essentially for free from there on out to charging on their way. That's Steven Messer, the co-founder of an AI sales company called Collective Eye. With over a decade of experience in the field, he's had a front row seat to the AI boom. The speed at which its adoption took place, the speed at which people learned to write prompts, prompt engineering was a word that no one had ever heard of, but the speed at which they did that was unfathomable. Gen AI has really changed the creative world dramatically. By 2022, Generative AI was already reshaping how creative work got done. Tools like OpenAI's Dolly and startups like Midourney let users generate high quality images in seconds. No traditional software needed. And when you ask Dolly for an image of a koala bear riding a motorcycle, it knows how to create that or anything else with a relationship to another object or action. After years of layering smaller AI features into its tools, Adobe made its biggest move in 2023 with the commercial launch of Adobe Firefly. Unlike newer AI startups, Adobe integrated generative AI into familiar tools across its Creative cloud, giving it a head start with a built-in audience. Across its Creative Cloud and acrobat applications, the company reaches over 750 million monthly active users. I think Adobe has a loyal base of customers, so a user of their products can just incorporate GenAI as part of their workflow as opposed to having to learn entirely new applications. Similar to other generative AI tools, Adobe Firefly can generate high quality images and video from text prompts, but it goes further, powering tools within creative cloud apps like Generative Fill and Expand in Photoshop. Watch. Boom, and text to vector graphics in Illustrator. Take your sketch from this to this in seconds. Adobe has a legacy of people who know how to use those products very well, which means they're already trained, they're already efficient. They know what they're doing, so if they want to create something very specific, then make it 3D, then have it do different things or be in different environments. Now you're talking about taking that creative license of a professional and just blowing it out um in a much more efficient. And the company is also taking a more cautious approach to AI training. Many AI platforms train their models by scraping content from across the web, raising copyright concerns. The New York Times suing OpenAI, the creator of Chat GPT, and Microsoft for copyright infringement. But Adobe says Firefly is different, trained only on licensed and public domain content. Unlike a lot of other software companies, they've actually chosen to build most. Their Gen AI on their own. Their argument is that it's always licensed creative that they're using, so that anything that's that's going to train their Gen AI is going to be safe from threats of copyright infringement, trademark infringement, etc. And so their real goal is to go out there and say this is a safe environment. But Adobe is far from alone in this space. In just two years, the generative AI market has exploded from a market of 191 million. In 2022 to more than 25 billion in 2024. When you see foundation models coming up at the speed they're coming up, it is all over the map. It's not just meta, which is a risk to them. It's not just runway. It's not just mid journey. It's literally a range of people coming out of nowhere, and it might be people building on top of those models. Competitors like OpenAI, Canva, Sigma, Runway, Stability AI, and Mid Journey are moving fast. With some AI first tools that can be simpler and cheaper than Adobe's offerings, the risk they run is that their loyal audience looks and says, Wait a second, this new tool actually is easier or is faster or is cheaper or is better, and if I don't use this new thing, I'm going to lose in the overall game of competition. Meanwhile, tech giants like Google, Microsoft, and Meta are flooding the space with their own generative AI models. I look at that. When they released their new Llaa model, they came out with a cartoon version of everyone, and everyone quickly flew on to Meta to make a cartoon version of themselves. Well, that is the risk to Adobe. You've never seen the speed at which people are willing to change products just to get one capability that is at the edge or really hot and exciting. But Adobe still dominates when it comes to the creative software market, commanding over 80% of market share in 2024. But the rise of generative AI like Adobe Firefly is reshaping how creative work is done and who gets to do it, especially for junior talent breaking into the industry. Junior creatives are being pressed by the market to react in AI timing, which is light speed. Bruno Lemgruber is an associate professor of design at the University of Southern California and a creative director at Tabaruba Design with over 2. Decades of experience in the industry. So things have shifted in such a dramatic way. Before, you would do something in a week or in 40 hours and now you can do it in 1/10 of the time. And if the market is pressing people to respond in AI timing, then you're being neglected the time to reflect and to use critical thinking. And for senior designers, senior creators. You have enough experience to know what you're skipping, but if you're a junior, you're actually skipping a learning curve. AI is also changing the structure of creative teams. Tasks once given to interns or junior staff can now be done instantly with generative tools. Before, I would have interns or junior designers to try things that I kind of have a vague idea that will probably not work, but I say, hey, let's try it out. Now I can quickly experiment that with AI. There are many things that before you would require junior creatives to be involved. And now you don't need them. When it comes to the creative process, AI has advantages too, like saving time and making it easier to experiment. AI gives you the time because you didn't invest like hundreds of hours. You can quickly experiment, prototype something. Do I like that? Is there where I wanted to go? No, it's not. And like. and do it again. You're not stuck on like, oh, I already spent like 200 hours. I need to keep going. Now some creative professionals say they're under pressure not just to use AI, but prove they're keeping up in design and creative direction in general, if you don't embrace AI, you're most likely going to become irrelevant. As creatives adapt to a shifting landscape, Adobe is pushing beyond generative AI into what's known as agentic AI or AI agents. While generative AI creates content based on data patterns, Agentic AI acts more like a digital assistant, automating multi-step processes. Agenic AI is generally a new concept that people are talking about, and this is where the AI does its own thing on its own, and it starts to make decisions on behalf of the end user for you. Adobe is integrating these AI agents into its creative cloud and marketing products like Gen Studio and the recently launched Agent Orchestrator. The company says these tools help marketers streamline their entire content supply chain. Adobe Gen Studio for performance marketing lets marketers create their own on-brand email, paid social ads, and display ads. The tools are built to automate tasks like asset creation and performance tracking, helping brands scale and adapt campaigns more efficiently, and that strategy appears to be driving results. In fiscal year 2024, Adobe reported record breaking revenue with joint creative and marketing enterprise deals growing by more than 100% year over year. I don't think people have been paying enough attention to Adobe's approaches to Gen AI. They are doing some pretty interesting things. They are playing with different ways to incorporate Gen AI into existing products, but I don't know if they've really gotten the attention of the world, and I think that's what people keep waiting for is what are they doing on the frontier that's really going to blow people away.

Trek CEO, John Burke, takes us inside the company’s high-stakes race to stay ahead in a rapidly shifting cycling industry. As e-bikes surge in popularity, supply chains evolve, and consumer habits change, Burke shares how Trek is adapting its strategy to lead the pack. From innovation and sustainability to manufacturing and tariff trouble, Burke sheds light on the challenges and opportunities of the billion-dollar family business.

Trek built a $2B business. Now Tariffs are jeopardizing its future.

Trek CEO, John Burke, takes us inside the company’s high-stakes race to stay ahead in a rapidly shifting cycling industry.

Bikes might just have pedals, but they're powering an industry worth over $60 billion globally. High-end cycling has seen a renaissance in the past decade, fueled by a surge in e-bike popularity and a wave of amateur road racers investing in pro-level gear. Few companies have ridden that wave more successfully than Trek. Trek has doubled in size over the past decade, taking its $1 billion revenue in 2016 to $2 billion in 2024. But now the company faces global economic headwinds. Tariffs, how have they affected track? Huge. You know, we're an international business. Put in the chat GPT, chances of a successful 49-year-old company lasting 100 years, and the answer came back 8%. And so I play against that number every day. So with the increased economic uncertainty, how will Trek maneuver to stay relevant in a volatile landscape? The bicycle has always had a boom and bust relationship with American consumers from explosive growth in the 1890s and 1970s to sharp crashes just years after those. The industry has had to recover countless times, and out of the ashes, Preck was born in 1976. My first day at Trek, the training program was one day. I graduated from school, went home, got my wisdom teeth pulled, and the next day I was at Trek, and I remember my first boss, Joel Holden, he told me, he said all the great salespeople drive on Sunday, and I lived in the Rocky Mountains. And I had like 12 states and so I would always drive on Sunday um just to get be in position for Monday morning. John Burke took over as CEO in 1997 from his father, who founded the company in 1976 in Waterloo, Wisconsin. 1982 I was in college and my dad, he wanted to go on a bike trip and so we went out to Colorado. He always loved challenges. He thought it'd be super cool if we could climb Independence Pass. and so early one morning he and I climbed up Independence Pass, and that's been a famous photo. We have a saying, a track called Think Bigger Than the Barn. Tell me about the Red Barn. Well, this is where it all started. Red Barn downtown Waterloo, Wis. 1976, I think the first year there were 6 employees and they made about 700 bikes and you know, a lot of times during the day I'll just walk down to the red barn and back and I feel something when I go down there and it keeps me focused. So I love the red barn. As you were a kid, the company was rising. The day you start, it crashes. What facilitates that crash? I think it was arrogant. I think it was not focusing on the customer. It was kind of focused Trek focused on Trek and Trek didn't take care of the customer and then they got into some product issues and it kind of went downhill from there. My father came in and he took over running the business, and he studied the business for 2 or 3 months and said we're gonna have a quality product at a competitive value and we're going to deliver it on time and that's it. And it sounds so boring today, but at that time Trek was doing none of those things. Now imagine, say theoretically you're someone like me who has not ridden a bike in a while. Where would you recommend I start? If you haven't ridden a bike and you want to get into biking? One of the things I'd really recommend is an e-bike. Can I show you my favorite e-bike? Yes, I love this bike, and the reason I love it is because I have one. And the one thing about e-bikes is anyone who rides one has a huge smile on their face every single time. I mean, you get on a bike, it's unbelievable. You can do 2 X, 3 X 4X, where you could usually do. Once considered a niche product, e-bikes are now one of the fastest growing segments in cycling, projected to top $50 billion worldwide by 2030. Trek has leaned into the electric surge, expanding its e-bike lineup across mountain, road, and city models. E-bikes have been a big part of Trek's growth. It's a big part of our sales right now, but if you take a look at racing bikes, We do really well in racing bikes. The unit volume isn't that high. The dollar volume is really high, and we have a really strong brand there. When Lance Armstrong, a trek athlete, rose to fame after multiple Tour de France wins, his celebrity status had a huge impact. Not only did the bike industry see a boost in interest, Trek specifically saw an increase in sales and cultural interest, dubbing it the Lance effect. The global racing bike market is now valued at $7 billion. Tell me a little bit about Trek's customer. Some of these bikes are thousands of dollars. Who is a Trek customer? Well, you know, just a quote that it's always stuck into my head is, you can judge the greatness of a person not at one extremity, but by their ability to touch both at the same time. We saw a lot of kids' bikes, really cool kids' bikes. But then we sell a lot of $15,000 Project one custom bikes. We touch both extremities and everything in between. Are you looking to expand in those categories, or are you still right sizing after the pandemic? Oh, we're always looking to expand. When COVID-19 hit in 2020, global supply chains ground to a halt, but bike demand exploded. With gyms closed and mass transit viewed as a health risk, people turned to bicycles and droves. For many, it was a safe solo way to stay active or simply get outside. For others, it became a critical form of urban transport. The explosion of interest made bike companies. Ramp up manufacturing. What was happening is a lot of retailers were placing just a ton of orders because they couldn't get everything they wanted, so they just kept placing orders and we're like, God, we're geniuses, and we were not geniuses. And so we kept producing more and more and then the music stopped and there were 5060 day lead times had grown to 500. lead times and so you had this massive amount of inventory. I was reading somewhere where you sort of said something to the effect of trek has to be an international business. That's part of what success looks like, but it is a very difficult time to be an international business. brutal. OK, so yeah, I love how we're we're already here. Yeah, tariffs, how have they affected trek? Huge. You know, we're an international business. We design products in the United States, we build products in the United States, we source products in Asia. We have a large factory in Europe. We do more than 50% of our business outside the United States. We're a global company. And we've got tariff policies that are changing on a constant basis. I'm just telling you, we just increased our prices last week 10%. Tariffs can have a massive impact on a company that potentially can have a huge impact on employment levels. Over 50% of Trek's business is done outside the United States. Why would it be difficult for Trek to move all of its manufacturing to the United States? Yeah, you know, we actually This goes back to the mid 90s. We actually had a manufacturing plant that built a lot of volume bikes in the US and it's really hard because the infrastructure doesn't exist. There are not frame manufacturers. There aren't parts manufacturers. Like you can't buy tires, you don't have rim suppliers. You don't have brake suppliers, you don't have crank suppliers. All that business is gone. It hasn't been in the US for 40 years. It doesn't exist. So to snap your fingers and go, let's reshore everything. By the time you resor stuff and started at that, you're 5 years down the road. And for people to think that you can just go like that, you can't. So what are we looking at here? This is one of the most famous moments in trek history. It was maybe 6 or 7 years ago somebody came back and they said, Do you really know what's going on with women's cycling? And I said, No. And they said, Well, they don't make any money. They stay in the worst hotels. They get the worst amount of support, and I was like, Oh, brutal. And I said well why don't we buy a team and we'll do it the right way. And so we started our own cycling team and there's a race called Perry Rubay and it's only for men and it is the most difficult roads in Belgium in that area and it's all cobbles and it's just really hard. They added a women's event. It was 2019 and that's Lizzie Begman and that's the year Lizzie won the first Perry Rube. What does the future of bicycling in the US look like and where does that intersect with the future of track? I think bicycling in the United States is important for a bunch of different reasons. Number one is just exercise. If you take a look at it today, 42% of Americans are obese. The government helped to bring smoking down. The government helped take care of drunk driving. I think the government can play a Bigger role with the health of the American people and the biggest aspect of that is getting people outside and getting people exercising. So I think that's one thing, you know, I just take a look at transportation, you know, a majority of car trips are 2 miles or less, and would you rather drive a car 2 miles or less, or would you rather be on a bike or would you rather be walking in the United States, if we define a car trip. And we say going to work, going to school, going to the restaurant, going to the market, 1.5% of trips are taken by bicycle. If you go to Holland, that number is 25%, and you have to say from a societal standpoint, do we want more and more people driving cars. or would it be really good if people rode their bikes or walked? And I think for physical health, mental health, healthcare costs, we need to get the country moving, and I think cycling is one way that you can do that.

American Express is winning over Gen-Z by offering curated experiences and personalized rewards that resonate with younger audiences. In 2023, Gen Z accounted for 75% of new American Express Platinum and Gold cardholders, drawn to benefits like exclusive event access and dining perks. This video explores how Amex's strategy of tapping into experiential rewards is transforming the credit card landscape and setting new standards for customer loyalty. 

How Gen-Z Made Amex Cool 

In the first quarter of 2025, Millennials and Gen Z drove over 60% of new global Amex sign-ups. 

American Express built its brand on elite travel benefits and luxury perks – but now it’s shifting to win over a younger audience: Gen Z. 

American Express built its brand on elite travel benefits and luxury perks, but now it's shifting to win over a younger audience, Gen Z. That's the powerful backing of American Express. In the first quarter of 2025, Millennials and Gen Z drove over 60% of new global Amex signups fueled in part by influencer-driven buzz. Hear me out. Get the platinum AMEX card. It's metal and it goes. Things at the heart of this growth is Amex's loyalty and rewards program. So especially as everything costs more, if you can get champagne travel on a beer budget, that's a lot of what Gen Z and millennials are trying to achieve. Here's a closer look at how this 170-year-old credit card giant is evolving to stay relevant with the next generation of cardholders. For decades, American Express was the go to card for luxury travelers and the business elite, built on prestige and premium perks. My name is Tina Fey. Oh, go right in. Really, that worked. Are you aware that you can access over 120 lounges simply by showing the platinum card? But that image. and its older customer base is shifting. In 2023 alone, Gen Z and Millennials accounted for 75% of Amex's new platinum and gold card accounts. Gen Zers are actually bigger risk takers with their money. They came of age though at a different time. It was actually around the pandemic time when money was actually flowing freely. People got all that stimulus money. A lot of Gen Z's introduction to money, at least in adulthood, was more gambling on meme stocks and crypto. We've actually seen Gen Zers proving a lot more risk takers with their money, and that includes taking on debt and also taking on riskier investments. A study from TransUnion found 84% of Gen Z consumers aged 22 to 24. Had at least one credit card by the end of 2023. That's a 23% higher rate than millennials at the same age a decade ago. Millennials were famously debt averse, very slow to get credit cards, perhaps because they have hefty student loan burdens, and many grew up around the time of the financial crisis. Gen Z spends differently too. Unlike older generations who prioritized travel upgrades in airport lounges, Gen Z is putting more of their money towards experiences. and lifestyle, and Amex is leaning in. They'll get you a free global entry or TSA PreCheck membership. They have their own special lounges at certain music festivals and sporting events. You get a little bit off your media subscriptions. You get a little bit off Uber. You get a little bit off these food delivery apps, but it is sticky and it keeps people coming back for more. Amex's business model makes it uniquely positioned to build out this rewards ecosystem. Unlike many of its competitors that just run the payment networks, Amex operates in a closed loop system. That means it handles everything in-house, functioning as the issuer, the acquirer, and the network. Amex has a unique business model in that they're both a lender and a payment processor. Visa and Mastercard dominate the network side of things, but they're not lenders. They're not extending credit. Amex is playing both sides of that. That full picture view. From both shoppers and merchants gives Amex an advantage. It knows where customers are spending and can tailor company rewards to keep them coming back. There's something about getting 4x points when paying for dinner with this card that just hits different. Gen Z and millennials use their Amex cards for dining nearly twice as much as other generations, according to the company. Amex saw an opportunity and moved fast. In 2019, the company acquired Resi, a restaurant reservation platform that Cardholders early access to in-demand tables, and in 2024 it expanded its dining ecosystem by acquiring the high-end restaurant booking service Talk, as well as Rome, a mobile payments app. When you're with Amex Gold, you can stack 4 times points on restaurants around the world. Amex has really leaned into dining as one of their key experiences. They have elevated dining rewards on a bunch of their credit cards, but Also relates to the experience aspect where they can help you book a table at a fancy restaurant. They can sometimes offer chef tutorials and meet and greets, and I'm right here in New York City for the American Express Platinum Coast dining experience. Amex also taps into brand partnerships to appeal to a younger audience. Y'all already know by now that my first job every single year at Coachella is always the Amex experience. Influencer marketing. It is a big deal. They do these activations at film festivals and concerts and music festivals and things like that. It is a way to reach young people. These rewards are designed to keep younger cardholders spending. This boosts transaction volume and in turn drives up revenue. Everybody wants a freebie, right? So especially as everything costs more, if you can get champagne travel on a beer budget, that's a lot of what Gen Z and millennials are trying to achieve. If it really keeps people loyal, keeps them spending. That loyalty has been key to Amex's growth, even with hefty annual fees, nearly $700 for premium cards like the platinum. Younger cardholders are still signing up. The annual fee thing is interesting because that shows how sticky their audience is that, you know, every so often, every few years, they introduce new features on a card and they raise the annual fee, and the renewal. Percentage is apparently very, very high. The people are loyal to these cards. They like the perks they're getting. The competition for these young and affluent spenders is fierce. The rewards race is on, and competitors like Chase, Capital One, and Mastercard are catching up. It's a copycat industry, and we're seeing a lot of that. Chase and Capital One are following the Amex playbook when it comes to luxury travel cards, getting you into the airport lounge, building out their own propriety. lounges. That was something that Amex really pioneered. Take the Chase Sapphire Reserve card. It offers premium travel perks, dining rewards, and access to lounges. Once a hallmark of Amex's platinum card. They have a lot more challengers now than they used to, and in fact, Capital One's a real up and coming competitor. They're in the process of acquiring Discover. That's going to make them an even more worthy competitor. They've been building out airport lounges. They've been in. Producing premium luxury travel cards. Chase had a big shot across the bow in 2016 when they introduced that Sapphire reserve card, and that's going toe to toe with Amex Platinum. And American Express is watching for more than just competition. It's also bracing for broader economic headwinds, including the potential impact of rising tariffs. Market volatility and investor jitters over tariffs already contributed to a dip in the company's stock price. are already worried about inflation and the high cost of living. If tariffs make that more expensive, there's a fear that we could tip into recession and that this could kind of be the straw that broke the camel's back. A recession is still bad news for any sort of payments provider. If people are spending less, that pie is shrinking. In its April 2025 earnings call, Amex CEO Steve Squareri acknowledged those risks, but pointed to the company's affluent customer base as a buffer. If you look at our card base now versus our card base in 2019, it is more premium than it was at that point with higher FICOs. And the other thing that I'll say, our millennial and Gen Zs are performing significantly better both from a FICO perspective and from a delinquency perspective than the industry. That high spending, low risk consumer base may help shield the company. From some economic turbulence, the companies that would likely fare the worst in a recession are those that cater to more of a subprime audience, those who have customers with lower incomes, lower credit scores. The Amex audience is very resilient. Delinquencies across the industry have gone up. They haven't gone up as much at Amex, and that's also reflective of the customer base and could bode at least better if there is a downturn.

Since Michelle Gass took the helm as CEO of Levi Strauss & Co. in January 2024, the company has been on a mission to reach $10 billion. Behind this vision is a fresh collection of luxury denim and streamlined go-to-market strategies designed to elevate the brand's status and reach new markets.

Inside Levi’s CEO’s growth plan: "We should be at least a $10B company"

Since Michelle Gass took the helm as CEO of Levi Strauss & Co. in January 2024, the company has been on a mission to reach $10 billion. Behind this vision is a fresh collection of luxury denim and streamlined go-to-market strategies.

Since Michelle Gass took the helm as CEO of Levi Strauss & Co. in January 2024, the company has been on a mission to reach $10 billion.

Just a few head of Levi's blue jeans and a lot of heart miles. You see, fashions may change, but quality never goes out of style. For over 170 years, Levi's has defined American Denim. The brand is now tightening its belt and cutting costs in efforts to reinvent itself and return value to shareholders. We made some tough calls. We made some really tough calls, and that was hard. The brand closed out the 2024 fiscal year with $6.4 billion in net revenue. That's 3% growth in Levi's CEO Michell. Goss's first year at the helm. Now we always have to be really tight in the DNA of the brand. Levi's stock price fluctuated throughout the year, going as high as $24 and as low as $15. The brand is up against fast fashion retailers and luxury giants that aim to rise above the competition in the denim market, but will slimming down costs and tapping into the luxury market be enough to expand its control in the denim wars? So big picture, what has been for you the biggest pleasant surprise? I think one of the most exciting things, and I'd also put it to your question, one of the most surprising things is how much of a lift this is around the culture. You know, Levi's, we've been around for 170 years now. There have been many chapters along the way, but Over the last couple of decades, we've operated largely as a product brand company selling through others, a wholesaler, and now we're saying, OK, we still are going to do that, but close to 50% of our business is GTC. And so when you have to make that level of change, and you can do all the process you want, but you've really, you've got to get the buy in of the hearts and minds of the teams and the people, and I know we have their hearts, you know, and we have their minds, but like what does that mean in practice? But hard decisions have also marked her tenure. The company exited its footwear products in Europe, parted ways with its affordable denizen catalog, and began conversations to sell off its Dockers brand. In January 2024, the denno company also announced it would slash up to 15% of its global corporate workforce, part of a larger productivity initiative. We made some. Tough calls and the responsibility, the role I have responsibility I have to all of our stakeholders, our shareholders, our communities, our board, all of our people, everyone we serve is to make sure that this company is set up to thrive over the long term, and we recognize that we had just we had. Gotten too big and so we had to slim down the organization, especially in our corporate offices around the world. In 2024 $289 million in capital was returned to shareholders. This is 45% higher than the year before. In simpler terms, the company gave back significantly more money to its investors compared to the preceding year, rewarding them for their investments. Let's go say hi to Beyonce. Another first year high for Goss was fortifying a decades-long relationship. I had to. Uh. You gave her a shout out in your most recent earnings call. How important are collaborations like that? We call it living at the center of culture, you know, the right collaborations create great brand heat for us, and they drive that relevancy again. A brand that's been around for decades and decades. How do you continue to reinvent might be too strong a word but stay relevant while always staying true to your heritage? The campaign titled Reimagine puts a spin to iconic Levi advertisements with none other than Beyonce and her song Levi's Jeans. The Levi Strauss and Company brand dates to 1853 when it opened as a San Francisco dry goods store during the gold rush. Levi Strauss, a German immigrant, partnered with Latvian tailor Jacob Davis to create a durable pair of pants for working men, and in May 1873, the pair received a US patent for their design. Today, Levi's ranks 2nd among apparel companies on the Fortune Most admired Companies list. This is 5 spots higher than the previous year. The brand has a global presence across 110 countries with about 3400 stores. Meanwhile, the global denim jeans market is expected to hit $95 billion by 2030, and the company is looking to women to carve out a larger stake in the market. Look for Levi's womenswear. Do you think you can ever get to 50/50 in the genders or even majority female? 50/50 feels about right for us. I mean, we have a great men's business. It's go way back when. It's how the company. right, so while I look to the future, and by the way we're a little over a $6 billion company today. I look forward and we should be at least a $10 billion company, and that's going to come through a few ways, but women's is going to be a key means to do that. Levi's is also looking to expand its identity well beyond its denim jeans. To get this done, the company is aiming for its direct to consumer model to account for 50% of business. The brand also looks to triple its e-commerce operations. When I talk about denim dressing, head to toe denim, you know, our consumers are really responding to fun fashion like this. Driving the shift are decisions to ensure consumers have the latest trends. The company is transitioning from a two-season model to a 4 season approach. The company also aims to slash its go. Market timeline from 16 to 12 months. We have to be a lot faster to make sure we're catching the trend. And so we're faster today than we were a year ago, and we're going even faster because you've got to hit it right when it's happening. You can't be too late. And keeping tabs on trends has already proven invaluable. Our teams who are out looking a couple of years see what's happening on the streets, and now. You know, baggy loose like it's everywhere and everybody's wearing it and I'm very pleased to say that it was Levi's who started that trend. Being attentive has also allowed Levi's to tap into the luxury goods space. The brand introduced Blue Tab for its spring 2025 collection featuring sophisticated silhouettes made with Japanese selage denim. We've had a blue tab for quite some Time and it would show up in our Japanese denim made in Japan product and you know that's been out there enough and consumers even play back to us, Oh, it's the blue tab. That must be the good stuff. While Goss is betting on attracting more women to the brand, widening product lineup, and emphasizing TTC to drive growth, her focus remains squarely on sustained expansion. It doesn't have to be heroics, you know, it shouldn't be these big swings up and down, you know, steady beat of nice growth and without risk there is no reward. Now with that in place. We got to deliver. We've got to execute, and there's still opportunities, you know, and there'll be some mistakes along the way. Not everything always goes as as perfectly as one would expect, but I feel like we are poised to deliver.

In this exclusive interview with Fortune, Nike's newly appointed CEO Elliott Hill shares his vision for the iconic sportswear brand's future. From intern to chief executive, Hill's 30+ year journey at Nike has given him unique insights into the company's DNA. He discusses his plans to refocus on Nike's core strengths, emphasizing sports and athlete partnerships while addressing recent challenges in sales and market positioning. Hill outlines strategies to balance direct-to-consumer sales with wholesale partnerships, reduce promotional pricing, and drive innovation in key categories like running and basketball. With a commitment to authenticity and a deep understanding of Nike's heritage, Hill aims to lead the company back to its roots while pushing forward into a new era of growth and innovation.

‘Nike’s Back’: How Its New CEO Plans to Reassert the Brand’s Dominance

In this exclusive interview with Fortune, Nike's newly appointed CEO Elliott Hill shares his vision for the iconic sportswear brand's future.

Is this a return to Nike's roots? No question. I think every company has a core of what makes them great, and I think sport is the core of what we are, we are about. We're about human potential and performance. Nike's back. Since started as an turn in apparel sales in 1988, Elliot Hill has spent his entire career climbing Nike's ranks. He has spearheaded some of the company's biggest sportswear launches and led headline grabbing marketing campaigns. So don't ask if your dreams are crazy. Ask if they're crazy enough. Now more than 30 years later, all eyes are on him as he steps into the company's most prominent job, CEO. It almost feels surreal like, hey, did this just happen? But Hill has taken the reins at a time when Nike is grappling with declining sales and a fall in stock price. How do you think you're performing at this point? I think we can be better. As Hill kicked off his 33rd year at Nike and 3rd month as CEO, he recounted his journey to the corner office and what's next for the sports retail giant. Nike's sprawling facilities in Beaverton, Oregon didn't exist when Hill first started as an intern. We very much wanted it to feel like a campus, and we moved here in 1990. The buildings that you can see across the way in Brown were the first buildings. At the start of 1988, the company was worth just over $700 million. Three decades later, it's valued at more than $100 billion. You are Nike's newly minted CEO. How did you get here? I took a sports marketing class and I wrote a paper around this company called Nike. I fell in love with the company and I said, you know, that's the type of company I want to work for. I can combine sport with business. And I was fortunate. There was a guy named Tim Joyce who came to speak at our university and after he finished speaking, I went up to him and said, I want to work for Nike and I bothered him for about 6 months and he finally hired me and I started at Nike June 1 of '88 as as an intern. That internship was a springboard to a lifetime career at Nike. In his early years, Hill held various sales roles selling shoes to mom and pop retailers and driving around in an old minivan. I was driving around in a used Dodge minivan, that's for sure. I drove 60,000 miles a year and I was started out in sales. I worked my way up through the sales organization, different experiences. Hill steadily moved up the ladder, never staying in the same role for more than 4 years. In 2018, he was promoted to president of Consumer and Marketplace, a role he held until 2020 when he. Hired, but his exit didn't last long. Four years later, Nike's former CEO John Donahoe was out. Nike's CEO John Donahoe is going to be leaving the company. During the pandemic. Donahoe's aggressive e-commerce and direct to consumer business approach helped drive Nike's share price to a historic high in November 2021. But as the pandemic wound down, market conditions. Changed and the strategy started to backfire. The company lost market share and strained its relationships with retail partners, all while losing sales and street cred. The board needed a replacement. Walk me through how this came to fruition, your return to Nike. I, I had stayed in touch with people at Nike at all levels of the organization. It was a series of phone calls and I, you know what, I, it was a pretty quick decision for me. Nike's share price jumped by more than 6% just a day after it announced Hill would assume the top job. Is there a part of you that felt you had something to prove? Had a great Second chapter, if you will, business career. I was doing a number of investments and projects that inspired me, motivated, kept me busy, but I have to admit there were those moments when I would walk away from a board meeting as an example where your responsibility is to steer, guide, suggest. You know, provide thoughts, perspectives, and then you leave and you don't have the responsibility for continuing the execution. There was a moment when I started to think to myself, is this really what the rest of my life's going to be like? And then I get the phone call. And so and then here we are and my whole world turns upside down and uh and uh and it's just been a crazy 75 days. What's one of mind for you? The next 30 days, the next year, the next 5 years, well, the 1st 60 days were a sprint. I'll tell you that. What I wanted to do first and foremost was to re-engage with the team. So I spent the 1st 60 days and my first day in the office. I did an all employee meeting, brought everybody together, had a fireside chat so they could get to know me. We get to work in schools. We do. That we do, that we do. What are they telling you? What are you hearing? Where we're headed, which is around celebrating the passion and emotions sport that excites them that that gets them motivated. That's what we have to do more of. That's when we're at our finest is when we put athletes at the center of everything we do. We take the insights from those athletes. That's what drives our product innovation pipeline. That's what drives those emotional and inspiring stories that we tell. Those athletes' stories have become synonymous with Nike's brand. 26 times I've been trusted to take the game winning shot. And missed. From Michael Jordan and LeBron James to Serena Williams. And Ronaldo Nazario. This is the Ronaldo pitch as we call it the Ronaldo Field, and so to, to celebrate him and all that he means to Nike, we, we dedicated the the pitch and his name and then of course we have the the statue here and. And we've been fortunate to continue our relationship with him even beyond his playing days. Hill sees those athlete partnerships as a crucial element of Nike's past and future success. As Nike's vice president of North America, Hill forged a strong partnership with Michael Jordan and was instrumental in encouraging the basketball legend to expand his brand globally. The strategy has paid off with sales growing to over $7 billion annually in 2024. Now Nike is looking ahead. We had Caitlyn Clark here I saw that she was in yesterday on her signature shoe that we launch and we're working on her logo and design of her logo. She signed an 8 year $28 million endorsement deal with Nike in April of. Last year, making it the largest sponsorship contract for a women's basketball player, what was the motivation behind that and and what impact do you think it will have on, on women's sports certainly on the WNBA? When we were running just basketball, we never got to the women's opportunity, but by having this small team. That's focused on women's basketball. It unlocked, we believe, opportunities for the game of basketball, but also in product. It becomes an opportunity to grow the overall marketplace by inviting more and more girls into the world of sport. It is in an area that we'll continue to invest in, and we see tremendous tremendous momentum right now. Hill's new role comes at a critical time for Nike. Sales dropped in the last three quarters of 2024, and shares have slumped to more than 43% since 2023. In an effort to clear out inventory, the company began offering massive discounts throughout the year, slashing prices by as much as 30%. Hill says that approach has hurt the brand. You said in the December earnings call, uh, your first as Nike CEO that Nike has become too promotional offering too many discounts. I'm certainly not complaining, but what what's your vision for how Nike should approach pricing and discounts and still uphold its brand value and market position? There are moments in the traditional retail cycle where it makes sense to be promotional Black Friday, Cyber Monday. But we had become too promotional in between those moments we were even leveraging promotions to drive revenue, and frankly that's not great for margin. It's not great for the brand. It's not great for our wholesale partners because they end up competing against us and profitability matters for them. And so starting this spring we're moving to a position where Nike Direct both digital. Physical is going to actually lead the marketplace and be less not only less promotional but elevate the experience that the consumer has with our brand. Nike also faced backlash over its direct to consumer sales strategy. Before the pandemic, it started to pull back from large wholesalers like Foot Locker and Dick Sporting Goods to focus on its own brick and mortar stores and e-commerce. Now that strategy is changing. Pre-pandemic, Nike severed ties with retailers wanted to focus more on direct to consumer. What are your plans to evolve to rebuild, you know, your partnership with wholesale retailers like Foot Locker and so on? I think it all starts with the consumer. There are consumers that want to shop choice wholesale, either digital or physical, and the good news is the space that I spent a big part of my career. I have great relationships with our retailers, made it. Very, very clear to our team first and foremost that we were going to run a balanced. Marketplace and I've had countless numbers of phone calls and meetings already with them making certain that they understand the importance uh that they play to our brand and the development of our brand that's been a great reception by the way, from our retailers are saying OK. Nike's back. Gone are the days of going wide. Hill wants to go deep, and he says Nike will be zeroed in on 5 main categories moving forward running, basketball, training, football, and sportswear. I live in Manhattan. I run in Central Park. I see a lot of people wearing Nike. And but I also see on run. I see hook, right? A lot of these brands that I've eaten into Nike's market share. So what are your thoughts on how you go back to reestablishing yourself as the premium athletic brand and what do you see as the number one driver for growth for Nike as we move forward? It does always come back to have new, different innovative coveted beautiful product. The lineup that we have in running. Uh, is the strongest lineup that I've seen since I've been here top to bottom across the board, and we have to have those retail partners to help us take shelf space, open to buy and market share from our competitors because frankly that's we left it open ultimately. We have to earn our way back onto the shelves. It's that simple. You've repeatedly made this reference where you say we're going back to sports. Sport is at the heart of our brand. When I think of Nike, I think sports apparel. So what do you mean by that? We were running at what we call the gender offense, so men's, women's, and kids, we lost the sharpness around sport. And so we're reorienting the organization to focus sport first, so think running, think basketball, think football or soccer. And then gender second by lining up by gender, it also helps us find opportunities specifically for that gender, whether it's color and material that's different for a man versus a woman. Another big focus for Hill is product innovation. This is the LeBron James Center, and it's all about advanced R&D and innovation, and it's without question we believe one of the foremost centers of innovation of athletic and human performance. Hill still recalls the 1988 unveiling of Nike's now famous Just Do It campaign. I'm thinking of being a lawyer. He also led launches of footwear for elite athletes, but in recent years, critics, including investors, say Nike has fallen behind in the innovation race. What does product innovation look like for Nike as you move forward? We have a team of people that are already working on product in 28, 29. What's that look like? So long term, very futuristic innovation. The best innovation does come from an athlete, how to make you run faster, jump higher. Uh be safer, move quicker. For Nike, many of those insights came from athlete partnerships. Nike's at its best when we have an athlete, and we have a great relationship with that athlete, and we're able to partner with that athlete to take insights from their game and This case obviously basketball and to build the product around that individual's game in this case it happens to be LeBron James. He's very involved in the footwear that he wears and how it looks, how it fits, how it performs. He's just a representation of some of the. The great executions that we've done with him. Few are as familiar as Hill with the history, people, and inner workings of Nike. Despite three decades of experience and a clear enthusiasm for the CEO role, he has his work cut out for him. In your 60 days as a CEO, what have you learned about yourself? What have you learned about leadership? I have to be who I was always. I have to remain authentic. Just because I have a title and a new responsibility, it can't change how I show up because I think if I do, people will see it, smell it, sniff it, and I've done some just real tactical things to try to do that. I it sounds so simple, but I go get my own coffee in the morning and I go get my own coffee in the afternoon. I work out in our gyms here every morning and I move around the gyms and the coffee places so that I can interact with more and more of our teammates. You can't let a A title or new responsibility to change who you are to your core, you have to show up as authentic authentically yourself as you possibly can.

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