Road Trip!
Other cities make claims to the title, but New York City is and always has been the spending capital of America. Manhattan was founded by the Dutch for the sole purpose of commerce, and nothing much has changed on that front for 500 years. Miami has condos and cars, LA has mansions and sunsets. New York City has 20-odd million people of every ethnic background and body type. At any given moment about 1/4 of them are buying something.
That makes New York the best place on earth to do customer research, but only if you set the right expectations. The service is going to be a little rough-edged/ no-nonsense (one of many reasons New York discount stores generally stink; the locals don’t do folksy-interactions. Throws off the whole Walmart and Target vibe).
Drawing from 3 names in my Macke Starting 10 Portfolio, here are 3 names on my NYC homework list and what I’m looking for from each.
Aritzias new SoHo Flagship
Aritzia is a Canadian seller of affordable luxury apparel for working women. They make nice clothes for women who want tasteful and classy without a librarian vibe. The company designs its own stuff, and they are great at it, but what excites me more about the stock is that Aritzia makes great stores. They are the kinds of places husbands feel ok chilling at while their wives/girlfriends shop.
Aritzia is big in Canada, but our pending 51st state isn't quite as obsessed with consumption as America is. Yet. Aritzias path to growth is opening attractive, different, slyly high-tech retail stores and then building up e-commerce to support the demand. Last November, Aritzia opened a new flagship in SoHo to rave reviews (albeit by the subdued standard of store opening enthusiasm).
NYC Flagships aren't where you go as a measure of what the whole chain looks like. SoHo is the Big Dance for Aritzia. The company is going to spend much more on that location than 99% of the rest of the chain. The SoHo store is (or should be) aspirational for the chain. This should be the best store Aritzia knows how to make. I’m looking for packed, clean, and jamming. If SoHo isn't buzzing on a weekend, Aritzia will be running on fumes by the time they get to, say, Portland.
Starbucks
Starbucks in NYC is whatever the opposite of aspirational is for SoHo Aritzia. There are, give or take, 1 billion Starbucks locations in NYC and half of them are on the constant edge of chaos. Suburban Starbucks managers are hoping Logan shows up for his 4 pm shift after high school. NYC Starbucks managers are making sure the bathroom area of the location hasn’t become a working brothel during the post-lunch run.
As a fully caffeinated American and SBUX shareholder, I'll be sampling as many coffee beverages as I can in the next three days. I'm especially looking forward to the Columbus Circle Starbucks on the site of the barber shop where the head of the Mob's Murder Incorporated got whacked. Also, the Starbucks where that Mario psychopath stopped before killing a healthcare executive.
Brian Niccol hasn’t had to fix much yet but it's always been the case that you can tell how Starbucks is doing by the vibe and cleanliness of the store. If I can get served in under 4 minutes at the Mob-Hit Starbucks and the place is clean I'll count it as a win for the chain.
Peloton
My hotel has a Peloton! That's good news, not just because I'm a little OCD about riding my bike or even that I'm working on a 100-day streak. Hotel gyms were once a fairly big initiative at Peloton. It makes more sense than you'd think. Hotel gyms are, for the most part, absolute crap. Bad equipment, and not many customers pay extra for a good gym. They don't earn much, so hotels don't pay much to make them nicer. There's always way more funk in the air than you'd expect anyplace with four or more stars.
The idea was, and is, that putting Peloton's in hotels would be a great way to improve hotel gyms for little cost and maybe win a few customers while you're at it. It was an idea that made too much sense for Peloton to execute. Also, the company almost went bankrupt for a little while, so folks got distracted.
I’m not looking for the best ride ever. I want a functioning bike with good pedals and a seat that won't collapse. And hopefully some towels I can put under the bike to keep it from getting too swampy, but that's more up to the hotel.
Have a great weekend, everyone! Rest up for Walmart Earnings next week and THANK YOU for signing up!