December 13, 2023 • 6 mins
Shinola Watch Co. CEO Awenate Cobbin discusses expectations for retail sales data. He speaks with Alix Steel and Guy Johnson.
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Speaker 1 (00:00):
Tomorrow we're going to get another read on the economy
with retail sales. So for more on that and how
consumers are feeling. We're joined now by awanaate a Cobina
Bedrock manufacturing company. CEO Bedrock is the parent of the
watch company Shinola Watches. Cobina is also a former White
House aid in the Obama administration. You got a lot
going on, Awanat, how is the consumer doing? Like, let's
(00:22):
rate this time for consumers, say to a year ago,
where are they?
Speaker 2 (00:26):
I think relative to a year ago, we are in
a much better place than we were then. The consumer
a year ago is feeling all of the inflationary impacts,
and we've seen some of that softness in the market
continue through most of twenty twenty three. I describe it
as an uneven year for retail businesses like Shinola, but
we've seen some re emergence of the consumer late in
(00:51):
this holiday season. They're generally shopping later than they have
in the past. In previous years with some of the
stimuli that's been happening during COVID in succeeding years, they
really started shopping earlier. But this year, with all of
the promotions we've seen some consumer some consumers return to
the market.
Speaker 3 (01:13):
Can I just say it's quite cool that you make
watches in America when obese, So I think that's something
that we don't often see. So cute us on that
and making them out of Detroit. There's something sort of
mechanical about Detroit that I think really works as well.
Were you raising prices this year? Did you raise prices
last year? Do you think you've got to be raising
prices next year?
Speaker 2 (01:32):
So we raised prices on some items, but not on
the majority of our assortment, to be honest with you,
as we looked at where the consumers were relative to
last year and through the earlier part of this year.
Our busy season is a holiday season, like a lot
of retail businesses are. And as you know, we're in
a discretionary environment, right Our watches, our leather bags, our
(01:56):
jewelry or not something that people need. They are a
perch just that people consider, and so we did not
feel as if we could raise prices on the majority
for items. But as we go into twenty twenty four,
we are looking at items that were strong in twenty
three and looking to consider raising some of those prices on.
Speaker 1 (02:16):
The flip side, you mentioned promotions around the holidays. How
much of your have you had to dig in for
promotions and what do you think you're going to see
next year?
Speaker 2 (02:24):
We've unfortunately our brand was one that had never promoted
prior to this year. But luckily this is China is
tenth year in operation and we were looking to find
a way to really thank the consumer for being with
us for those ten years and their support for startup
like ours. Ten years is an important milestone, although we
(02:46):
want to get to twenty five and twenty five years
and then one hundred. So we did do a thank
you promotion that's currently running actually for consumers, which aligned
with the promotion promotion in the promotional environment that other
businesses are in.
Speaker 3 (03:02):
Yep, why do you think people buy mechanical watches? We're
in a world of Apple watches and everything else that
seem to be taking over at the upper end. I
can understand the queute also of buying a Rolex or
a partake Partake What gives what gives people that the
reason to come to you and want to buy one
(03:24):
of your watches?
Speaker 2 (03:26):
There's three reasons. One they're functional, right, but that does
not distinguish us from from the Apple Watch or other
products that are out there. Secondly, nostalgia. A lot of
people have been wearing watches for their entire lives, some
people have not, but it is an accessory that really
can help set up an outfit and make an outfit
(03:47):
look really good. And three for Shinola, I think people
come to us. As you mentioned earlier, we have the
first large scale watchmaking operation in the United States that's
been open in almost one hundred years, and so as
people think about where they're going to spend their money
and what they're going to spend it on, if they
want to look good, and that they want to contribute
to a region of the United States, Chinola is the
(04:10):
perfect purchase.
Speaker 3 (04:12):
And there's been a lot made over the last year
or so. The Inflation Reduction Act, the Restoring Story the
Biden administration has pushed through to bring manufacturing back to
the United States. What do you make of that. Do
you think that's working. Do you think the programs that
the administration have pushed through are making a difference, and
(04:34):
what impact long term do you think those are going
to have.
Speaker 2 (04:38):
I think in the long term there will be some
businesses that reshure and that bring manufacturing and production back
to the United States. The fact of the matter is
the American consumer likes things that are made in America
but are not on the whole, willing to pay much
more for them. You mentioned the Apple watch and some
of the other brands out there. Watch brands out there,
(05:00):
most of them, if all of them are not are
not produced in America. So as we look at what
the LGI station and those policies will do for the
watch industry and other production, I do think that businesses
like ours will look at what can we make here
affordably and what will the consumer pay for.
Speaker 1 (05:21):
Before we let you go? It is FED day or
looking at potential outline for how the FED is going
to react to the economy next year, et cetera. The
way you view the economy through your lens, is this
a good economy? Is this economy that's slowing fast? Is
it one that may get into recession? How do you
think about it?
Speaker 2 (05:40):
So I look at it personally, and I look at
the jobs numbers which are which are obviously so strong.
Consumer prices are continuing to increase, although at a slower
rate than they were last year, And then I think
about our businesses, right, the higher interest rates have it
an effect on our ability to invest invest in things
like manufacturing, which you just mentioned in the unit United States.
(06:01):
But when I think about the consumer, they want stability.
Most people are able to abably plan their finances if
they know what's coming tomorrow and next month and next year,
and so more than anything, I think that the consumer
wants stability. But the economy has approved over the last year,
and my hope is that it will continue to improve
(06:21):
at some point in twenty twenty four as well.
Speaker 3 (06:24):
Oh and I say great to catch up. Thank you
very much in Dee spending some time with us today.
I want to ta kuld beIN a of the bedroad
manufacturing company.
Tomorrow we're going to get another read on the economy
with retail sales. So for more on that and how
consumers are feeling. We're joined now by awanaate a Cobina
Bedrock manufacturing company. CEO Bedrock is the parent of the
watch company Shinola Watches. Cobina is also a former White
House aid in the Obama administration. You got a lot
going on, Awanat, how is the consumer doing? Like, let's
(00:22):
rate this time for consumers, say to a year ago,
where are they?
Speaker 2 (00:26):
I think relative to a year ago, we are in
a much better place than we were then. The consumer
a year ago is feeling all of the inflationary impacts,
and we've seen some of that softness in the market
continue through most of twenty twenty three. I describe it
as an uneven year for retail businesses like Shinola, but
we've seen some re emergence of the consumer late in
(00:51):
this holiday season. They're generally shopping later than they have
in the past. In previous years with some of the
stimuli that's been happening during COVID in succeeding years, they
really started shopping earlier. But this year, with all of
the promotions we've seen some consumer some consumers return to
the market.
Speaker 3 (01:13):
Can I just say it's quite cool that you make
watches in America when obese, So I think that's something
that we don't often see. So cute us on that
and making them out of Detroit. There's something sort of
mechanical about Detroit that I think really works as well.
Were you raising prices this year? Did you raise prices
last year? Do you think you've got to be raising
prices next year?
Speaker 2 (01:32):
So we raised prices on some items, but not on
the majority of our assortment, to be honest with you,
as we looked at where the consumers were relative to
last year and through the earlier part of this year.
Our busy season is a holiday season, like a lot
of retail businesses are. And as you know, we're in
a discretionary environment, right Our watches, our leather bags, our
(01:56):
jewelry or not something that people need. They are a
perch just that people consider, and so we did not
feel as if we could raise prices on the majority
for items. But as we go into twenty twenty four,
we are looking at items that were strong in twenty
three and looking to consider raising some of those prices on.
Speaker 1 (02:16):
The flip side, you mentioned promotions around the holidays. How
much of your have you had to dig in for
promotions and what do you think you're going to see
next year?
Speaker 2 (02:24):
We've unfortunately our brand was one that had never promoted
prior to this year. But luckily this is China is
tenth year in operation and we were looking to find
a way to really thank the consumer for being with
us for those ten years and their support for startup
like ours. Ten years is an important milestone, although we
(02:46):
want to get to twenty five and twenty five years
and then one hundred. So we did do a thank
you promotion that's currently running actually for consumers, which aligned
with the promotion promotion in the promotional environment that other
businesses are in.
Speaker 3 (03:02):
Yep, why do you think people buy mechanical watches? We're
in a world of Apple watches and everything else that
seem to be taking over at the upper end. I
can understand the queute also of buying a Rolex or
a partake Partake What gives what gives people that the
reason to come to you and want to buy one
(03:24):
of your watches?
Speaker 2 (03:26):
There's three reasons. One they're functional, right, but that does
not distinguish us from from the Apple Watch or other
products that are out there. Secondly, nostalgia. A lot of
people have been wearing watches for their entire lives, some
people have not, but it is an accessory that really
can help set up an outfit and make an outfit
(03:47):
look really good. And three for Shinola, I think people
come to us. As you mentioned earlier, we have the
first large scale watchmaking operation in the United States that's
been open in almost one hundred years, and so as
people think about where they're going to spend their money
and what they're going to spend it on, if they
want to look good, and that they want to contribute
to a region of the United States, Chinola is the
(04:10):
perfect purchase.
Speaker 3 (04:12):
And there's been a lot made over the last year
or so. The Inflation Reduction Act, the Restoring Story the
Biden administration has pushed through to bring manufacturing back to
the United States. What do you make of that. Do
you think that's working. Do you think the programs that
the administration have pushed through are making a difference, and
(04:34):
what impact long term do you think those are going
to have.
Speaker 2 (04:38):
I think in the long term there will be some
businesses that reshure and that bring manufacturing and production back
to the United States. The fact of the matter is
the American consumer likes things that are made in America
but are not on the whole, willing to pay much
more for them. You mentioned the Apple watch and some
of the other brands out there. Watch brands out there,
(05:00):
most of them, if all of them are not are
not produced in America. So as we look at what
the LGI station and those policies will do for the
watch industry and other production, I do think that businesses
like ours will look at what can we make here
affordably and what will the consumer pay for.
Speaker 1 (05:21):
Before we let you go? It is FED day or
looking at potential outline for how the FED is going
to react to the economy next year, et cetera. The
way you view the economy through your lens, is this
a good economy? Is this economy that's slowing fast? Is
it one that may get into recession? How do you
think about it?
Speaker 2 (05:40):
So I look at it personally, and I look at
the jobs numbers which are which are obviously so strong.
Consumer prices are continuing to increase, although at a slower
rate than they were last year, And then I think
about our businesses, right, the higher interest rates have it
an effect on our ability to invest invest in things
like manufacturing, which you just mentioned in the unit United States.
(06:01):
But when I think about the consumer, they want stability.
Most people are able to abably plan their finances if
they know what's coming tomorrow and next month and next year,
and so more than anything, I think that the consumer
wants stability. But the economy has approved over the last year,
and my hope is that it will continue to improve
(06:21):
at some point in twenty twenty four as well.
Speaker 3 (06:24):
Oh and I say great to catch up. Thank you
very much in Dee spending some time with us today.
I want to ta kuld beIN a of the bedroad
manufacturing company.
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