Suzanne Kapner
Appearances
The Journal.
Arrivederci, Donatella Versace
She's kind of the last of a breed of designers that have, you know, their own name on the front door because, you know, we've seen in recent years these conglomerates snapping up all the family-owned fashion brands.
The Journal.
Arrivederci, Donatella Versace
Well, assuming he doesn't sell the brand, you know, he has said he's dedicated to, you know, keeping Versace, you know, at the high end of luxury. He doesn't want to cheapen the brand. He wants to make it even more luxurious, to focus on craftsmanship.
The Journal.
Arrivederci, Donatella Versace
you know elegant designs so i think you're going to see more of that and less of the bright prints and the baroque patterns and the kind of outrageous flamboyant designs that versace was known for in the past and you know versace now is going to be sort of a little bit less like versace
The Journal.
Arrivederci, Donatella Versace
It's lots of bold colors, vibrant prints, outrageously sexy designs.
The Journal.
Arrivederci, Donatella Versace
If you remember that safety pin dress that Elizabeth Hurley wore back in the 90s.
The Journal.
Arrivederci, Donatella Versace
That dress kind of, you know, was a moment for a lot of us.
The Journal.
Arrivederci, Donatella Versace
That one, that jungle dress. Yes. When you think of iconic outfits worn in the 2000s, this Versace dress worn by Jennifer Lopez always makes the list.
The Journal.
Arrivederci, Donatella Versace
It's really this culture clash, one between the Americans and the Italians, and then two between the corporate suits and sort of the creative types.
The Journal.
Arrivederci, Donatella Versace
You know, the house had been under creative control by Versace since it was founded by her older brother Gianni in 1978. So Versace going forward is going to look different than Versace of the past.
The Journal.
Arrivederci, Donatella Versace
Well, I mean, she is the Versace brand. She's incredibly central. She's very recognizable for her platinum blonde hair and her dark eyeliner. You know, you would know her almost as a celebrity, almost as one of Versace's celebrity clients. That's how recognizable she is.
The Journal.
Arrivederci, Donatella Versace
But it wasn't until Gianni's murder in 1997 that she was sort of thrust into, you know, the crucial key role of chief creative officer.
The Journal.
Arrivederci, Donatella Versace
And, you know, from everybody I talk to, people have the nicest things to say about her, that she's just, you know, a sweetheart and professional, and, you know, she's sort of mild-mannered. She's not like the screaming diva type. You know, people who've worked for her just really sing her praises.
The Journal.
Arrivederci, Donatella Versace
So Versace was like one of the last remaining independent players, and it was really dwarfed by these giants that had formed around it. And the family, Versace family, had to sell some Picasso paintings, some leases on its stores. They sold Gianni's Miami mansion to kind of help plug operating losses. So, you know, they struggled for a while.
The Journal.
Arrivederci, Donatella Versace
John is a businessman who has been very successful. He is very smooth. If you see pictures of him, you know, he looks like a CEO out of Central Casting, you know, very buttoned up in his suit. And he started his career at Ralph Lauren. And then he became CEO of Donna Karan in 1997 and went on in... 2003 to join with some investors to buy the Michael Kors brand.
The Journal.
Arrivederci, Donatella Versace
And he, along with the designer Michael Kors, really grew that into just a powerhouse of a brand.
The Journal.
Arrivederci, Donatella Versace
The way he grew Michael Kors was he really sort of democratized the brand and made it more affordable to younger, less affluent customers. He opened outlet stores. He introduced kind of lower price products that were sort of entry level for the brand to sort of attract that younger customer. And that's how he sort of broadened its appeal and turned it into a large business.
The Journal.
Arrivederci, Donatella Versace
Donatella met John for dinner in Milan. And after that conversation, she said she was convinced that John could really bring some business acumen to help grow the business, particularly its online sales and to help open stores. And she agreed to sell the company to what was then called Michael Kors.
The Journal.
Arrivederci, Donatella Versace
Initially, the Versace executives I spoke with were happy and excited that they had this new parent to bankroll, you know, an expansion that they were going to be able to roll out new product categories, open new stores, really build the business. They would have the resources to do things they hadn't been able to do before.
The Journal.
Arrivederci, Donatella Versace
You know, the American executives would come into design meetings. You know, the designers would be trying to explain their inspiration for the latest collection. And the Americans would say, look, what are the key performance indicators? And the designers would be like, I don't, we don't know what you're talking about. You know, it's just, they weren't speaking the same language.
The Journal.
Arrivederci, Donatella Versace
Right. American businessmen love those, you know, those jargony terms.
The Journal.
Arrivederci, Donatella Versace
To grow a true luxury brand, you know, takes decades, not quarters. And people say, well, Americans, they look at the next financial quarter. Europeans, they're thinking along about generations. You know, they just take a much longer-term view of things.
The Journal.
Arrivederci, Donatella Versace
Coming out of COVID, two things happened. One, this so-called quiet luxury trend became very popular. And this was like understated, no logos, you know, very kind of sleek, minimalistic designs. The highest quality materials, but very sort of understated. And then secondly, the luxury industry started to go into a bit of a slump.
The Journal.
Arrivederci, Donatella Versace
You know, people, they had stocked up on a lot of luxury goods during the pandemic. They started spending on other things like travel and entertainment and luxury sales started falling at a lot of brands.
The Journal.
Arrivederci, Donatella Versace
Here's where the clash starts to kind of develop. He wanted to make it less Versace, more Palm Beach, less South Beach, so to speak. Tone down those bright colors, get rid of those bright prints, make it more like Dior, you know, little black dresses, elegant and sophisticated, not, you know, as flashy as it had been.
The Journal.
Arrivederci, Donatella Versace
Well, you know, it's like, you know, calling your baby ugly, right? It's like, you know, I think she was not pleased, especially because, you know, her idea of partnering with John was that he was going to bring his business chops to the partnership, not weigh in on all the creative stuff. I mean, he was not trained as a designer.
The Journal.
Arrivederci, Donatella Versace
He does not have a background in design, yet he would, you know, go to design meetings and he would give lots of feedback
The Journal.
Arrivederci, Donatella Versace
My sense is, you know, he had a sense of what would sell and he would go into design meetings and he'd say, this is not going to sell. And sometimes he was right and sometimes he was wrong.
The Journal.
Arrivederci, Donatella Versace
I think Donatella tried to deliver what he wanted, and then if it didn't work, she would revert back to more traditional Versace designs. And if you look at runway shows, you can see this fluctuation. You know, one season it's a lot of black and browns, and the next season it's all the bright colors again, and then, you know, it's back to the blacks and the more muted designs.
The Journal.
Arrivederci, Donatella Versace
So, you know, this was like a brand kind of going through this transformation. that created a lot of confusion about what Versace stood for.
The Journal.
Arrivederci, Donatella Versace
Well, they turned off a lot of their core customers and they didn't attract enough new ones. So, you know, the changes are not showing up favorably in the numbers. In the first nine months of the fiscal year, the sales are down something like 20%.
The Journal.
Arrivederci, Donatella Versace
So now we are really going to enter a new era for Versace where there is no Versace at the helm.
The Journal.
Arrivederci, Donatella Versace
So the day before her last fashion show in Milan, Donatella spoke at a Vogue event, and I thought what she said was very telling. She said, being told what to do, being told what's going to sell, if you try to please too many people, too many managers, creativity is gone.
The Journal.
Arrivederci, Donatella Versace
Yeah, I think she was being given a lot of direction by the managers of what to do. But she really, you know, has been the creative vision behind Versace now for the past, you know, almost three decades.
The Journal.
How to Make a $12.98 T-Shirt... in the U.S.
Sure. It's a 100% cotton t-shirt. It has the words American Made on the front, and there's a little American flag patch near the hem on the bottom.
The Journal.
How to Make a $12.98 T-Shirt... in the U.S.
It started changing gradually in the 70s, 80s. You know, companies began outsourcing to places like China, where the cost of manufacturing was much, much less expensive. And then we had other things like NAFTA, which opened the borders and allowed for, you know, free trade. And so manufacturing just began migrating to other countries outside the U.S.
The Journal.
How to Make a $12.98 T-Shirt... in the U.S.
We had whole communities in the south, you know, southeast especially, that were manufacturing towns where generations of families worked at the same mills for decades. And these businesses have closed over the years and a lot of people found themselves unemployed. They had to maybe go work in fast food restaurants and other industries that didn't pay as much, didn't have regular hours.
The Journal.
How to Make a $12.98 T-Shirt... in the U.S.
It kind of decimated a lot of these communities.
The Journal.
How to Make a $12.98 T-Shirt... in the U.S.
What's remarkable is that it was entirely made in the United States. The cotton was grown here. It was ginned. It was dyed. It was sewn all in the U.S.
The Journal.
How to Make a $12.98 T-Shirt... in the U.S.
What Walmart did that was a game changer is they committed to ordering a certain number of T-shirts over a certain time period. And that gave American Giant and its suppliers the confidence to invest. You know, they had to put in a lot of money to make this work. They weren't going to do that unless they knew that they had these guaranteed orders. You know, retailers can cancel orders.
The Journal.
How to Make a $12.98 T-Shirt... in the U.S.
You can put in all that work and all that investment and then the retailer could turn around and say, yeah, we're going to cancel the order. But Walmart didn't do that. It was like a non-cancellable order that they committed to.
The Journal.
How to Make a $12.98 T-Shirt... in the U.S.
Absolutely. Yes, they could, but it's not easy. And as far as I can tell, you know, it's not really happening yet at any kind of scale. It's still sort of these one-off small companies trying to make this work. Why is that? I think it's just difficult for like a large American clothing company who has, you know, their supply chain overseas to make these changes.
The Journal.
How to Make a $12.98 T-Shirt... in the U.S.
We don't really have the factories in the U.S. to make it that kind of scale. I mean, it's happening slowly and it may, you know, the momentum may continue to increase under the new administration. But this is like a nascent thing and it's kind of one step at a time.
The Journal.
How to Make a $12.98 T-Shirt... in the U.S.
You know, even though companies like American Giant and others are trying and working really hard to keep the American manufacturing industry alive, something like 23 textile mills closed in the past 18 months. Even with the tariffs that Trump put in place and that Biden kept during his term, you know, this is an uphill battle. It's not an easy thing to accomplish.
WSJ What’s News
Why Americans Are Turning to Discount Stores
But the administration urged the accreditor to work with the school to make sure it comes into compliance with federal law and, quote, take appropriate action if Columbia fails to do so. Neither Columbia University nor the Middle States Commission on Higher Education, which accredits Columbia, immediately responded to a request for comment.
WSJ What’s News
Why Americans Are Turning to Discount Stores
Die Aktivität der US-Servicefirmen sank im letzten Monat unerwartet. Das Institut für Versorgungsmanagement hat heute gesagt, dass sein Verkaufsmanagers-Index für Versorgungsanbieter im Mai von 51,6 in April zu 49,9 gefallen hat. Die Wirtschaftsberichterstatter von The Wall Street Journal hatten eine kleine Erhöhung erwartet.
WSJ What’s News
Why Americans Are Turning to Discount Stores
Die Kontraktion bezieht sich auf die Erhöhung der Unwahrheit und die Preisverschränkungen für Unternehmen, die von Präsident Trumps Tarif-Polizien gefordert wurden. The reading below 50 indicates a first contraction in activity since June 2024. Meanwhile, American employers further dialed down their hiring in May, a sign that the labor market may be weakening amid growing economic uncertainty.
WSJ What’s News
Why Americans Are Turning to Discount Stores
According to the ADP National Employment Report released today, just 37,000 jobs were created last month, down from 62,000 in April. The downturn means job growth was its weakest in more than two years. After the ADP numbers were released, President Trump posted on Truth Social that Federal Reserve Chair Jerome Powell should lower rates.
WSJ What’s News
Why Americans Are Turning to Discount Stores
The Fed reiterated last week that officials make interest rate decisions based solely on careful, objective and non-political analysis. U.S. stocks were mixed today after President Trump renewed his call for a Federal Reserve rate cut. The Dow fell about 0.2%, the Nasdaq rose about 0.3% and the S&P 500 stayed flat. Präsident Trumps Tax and Spending Megabill comes with a significant price tag.
WSJ What’s News
Why Americans Are Turning to Discount Stores
The legislation would increase budget deficits by $2.4 trillion over the next decade, compared with doing nothing. That's according to a Congressional Budget Office estimate released this morning. The number underlines Republicans' challenge in selling the measure as fiscally sound, even as Republican senators want changes to the GOP Tax and Spending Megabill.
WSJ What’s News
Why Americans Are Turning to Discount Stores
WSJ Tax Policy Reporter Richard Rubin is here to tell us more. Richard, what are some of the things that senators are looking to change in the big beautiful bill?
WSJ What’s News
Why Americans Are Turning to Discount Stores
Republican Senators want changes to President Trump's mega bill, which is estimated to increase the US deficit by more than 2 trillion dollars. Plus, more high-income shoppers are turning to discount retailers. What does this say about American consumers?
WSJ What’s News
Why Americans Are Turning to Discount Stores
Another thing that the big, beautiful tax and spending bill contains? Expanded access to health savings accounts, or HSAs. At least 60 million Americans currently have access to these accounts, which offer remarkable tax breaks to users who can afford to maximize them. If the Senate passes the bill, millions more Americans could potentially have access soon.
WSJ What’s News
Why Americans Are Turning to Discount Stores
WSJ-Reporter Laura Saunders told our Your Money Briefing podcast about what comes next.
WSJ What’s News
Why Americans Are Turning to Discount Stores
For more from Laura, listen to tomorrow's episode of Your Money Briefing. Coming up, discount stores are thriving. What does that say about how the U.S. economy is doing? That's after the break. Die neuesten Daten über Konsum-Sentiment haben gezeigt, dass amerikanische Haushalte nicht so gut fühlen.
WSJ What’s News
Why Americans Are Turning to Discount Stores
Das Buch, das letzte Woche veröffentlicht wurde, war eines der niedrigsten, die je gedreht wurden, in Daten, die 1952 zurückgehen. Und obwohl die Konsum-Sentimente niedrig sind, sind die Discount-Retailer hoch. Beide Dollar Tree und Dollar General haben für das erste Quartier des Jahres höher als erwartet. Sie sind da, weil sie eine breitere Konsum-Base erreichen.
WSJ What’s News
Why Americans Are Turning to Discount Stores
Yesterday, Todd Vassos, the CEO of Dollar General, said in an earnings call that the company is reaching higher income consumers.
WSJ What’s News
Why Americans Are Turning to Discount Stores
Dollar Tree said something similar. In its earnings call this morning, CEO Michael Creeden pointed to a broader consumer base as the reason behind its strong first quarter.
WSJ What’s News
Why Americans Are Turning to Discount Stores
To talk about what these results tell us about American consumers, I'm joined by Suzanne Kappner, who covers retail for The Wall Street Journal. So, Suzanne, both higher-end, lower-income consumers are buying from these stores. What does this tell us?
WSJ What’s News
Why Americans Are Turning to Discount Stores
What does this tell us about the broader state of the economy?
WSJ What’s News
Why Americans Are Turning to Discount Stores
Es ist Dienstag, 4. Juni. Ich bin Alex Osola für die Wall Street Journal. Das ist die P.M.-Edition von What's News, den Top-Headlines und Business-Storys, die die Welt heute bewegen. The Trump Administration has taken aim at Columbia University's accreditation, a significant escalation in the government's battle with the Ivy League school.
WSJ What’s News
Why Americans Are Turning to Discount Stores
And you can hear more from Suzanne discussing with WSJ Markets Reporter Hannah Aaron Lang about how U.S. retailers like Macy's, Target and Best Buy are negotiating President Trump's tariffs and what their earnings reports tell us about the resilience of the American consumer in our special episode of What's News in Earnings, out last Monday. We'll leave a link for you in the show notes.
WSJ What’s News
Why Americans Are Turning to Discount Stores
In other news, Reddit is suing AI-Startup Anthropic for using the online discussion site's data without a licensing agreement. According to the complaint filed today in California, Reddit said the AI company unlawfully used Reddit's data for commercial purposes without paying for it and without abiding by the company's user data policy. Anthropic didn't immediately comment.
WSJ What’s News
Why Americans Are Turning to Discount Stores
Präsident Trump hat heute gesagt, dass russischer Präsident Wladimir Putin gesagt hat, dass er zu den letzten Angriffen in der Ukraine reagieren muss, um die Vorschläge für die sofortige Frieden zwischen Moskau und Kiew zu verringern.
WSJ What’s News
Why Americans Are Turning to Discount Stores
In a social media post, President Trump said the two leaders spoke for an hour and 15 minutes, though the post didn't say whether he urged Putin not to launch a retaliatory attack on Ukraine. Trump said that he and Putin also discussed blocking Iran from getting a nuclear weapon and that the Russian leader said he would be willing to get involved in the ongoing conversations.
WSJ What’s News
Why Americans Are Turning to Discount Stores
And a large cargo ship transporting thousands of vehicles is adrift in the Pacific Ocean. After several electric vehicles it was carrying caught fire. All 22 crew members were evacuated safely. The lithium batteries used in many electric vehicles are highly flammable. There have been cases of spontaneous combustion, but no ship fires so far have been directly blamed on EVs.
WSJ What’s News
Why Americans Are Turning to Discount Stores
And that's what's news for this Wednesday afternoon. Additional audio in today's episode, courtesy of S&P Global Market Intelligence. Today's show was produced by Pierre Bien-Aimé and Anthony Bansi with supervising producer Michael Kosmides. I'm Alex Osola for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.
WSJ What’s News
Why Americans Are Turning to Discount Stores
The Department of Education told the organization through which Columbia is accredited that the school is in violation of federal anti-discrimination laws and no longer appears to meet the standards for accreditation. The move doesn't revoke Columbia's accreditation, without which Columbia would be virtually unable to operate.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
Well, retailers have been working really hard to offset the impact of tariffs, mostly by diversifying their supply chains. They are all moving production out of China into other lower tariff countries like Vietnam, Bangladesh. Some are even trying to move minimal production back to the U.S., but that's very small. Macy's, for instance, said it had delayed or canceled some orders out of China.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
And Gap said they're actually planning to double the amount of American-grown cotton it buys. So they're working with a variety of levers. They're also trying to wring some concessions out of their suppliers. and some are looking at price increases.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
Yeah, it's really been across the board from Walmart to Ralph Lauren. Companies are talking about price increases, but these are not across the board hikes. They're what companies describe as surgical. So they are looking at price elasticity of products and certain products maybe can bear an increase while others can't. They're afraid to
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
Demand will dry up if they raise prices, let's say on a T-shirt that's like a very commoditized item, but maybe a handbag that is like hot and in demand, they have a little more pricing power. So this is the exercise companies are working on going through their inventory and seeing where they can raise prices, where they can't.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
One notable exception is Gap, which said they have no current plans to raise prices in any meaningful way. They're concerned that their consumer is a middle market sort of moderate consumer, and they don't want to price themselves out of their consumer's reach.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
Well, it's been such a fluctuating situation that retailers have had to change their strategies on a dime. You had some of them canceling or delaying shipments from China when tariffs were at 145 percent and instead relying on goods that they had already shipped into the U.S.,
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
Then when we had that pause and tariffs on Chinese imports fell to about 30% in May, a lot of companies were rushing to get the shipments that they had paused into the U.S. during this 90-day window. And they've been pressuring suppliers to eat some of the costs. They've been trimming their own costs to stay as lean as possible.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
The safest bet for these companies is just to continue shifting production out of China immediately. Gap, for instance, at the end of their last fiscal year, which was February, they produced about 10% of their goods in China. Going forward, by the end of this current fiscal year, that will be down to 3%.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
Nevertheless, Gap really surprised the market when it said that the extra costs from tariffs would be about $300 million this fiscal year. Now, they are able to offset about more than half of those. But analysts were really still surprised at the size of the tariff-related costs and pushed gap stock down quite a bit.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
So even though companies are really scrambling to mitigate, they could still get punished here.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
The truth is, it's very hard for retailers to know exactly what is driving spending. And as Macy's CEO said, he thinks that there is some pull forward purchases of big ticket items like mattresses, furniture and jewelry ahead of possible tariff related price increases. But Gap, on the other hand, has said that it hasn't noticed any stockpiling at all.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
And I haven't heard too many companies say that they're seeing this pull forward buying activity.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
It's a very bifurcated picture. The lower end consumer has been under pressure now for several years since inflation started to spike up. And any tariff-related additional costs are just going to come on top of that. Target and Kohl's, for instance, said their consumers are under pressure. They're being more choosy in what they buy.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
But at the higher end, like Ralph Lauren and Coach and some of these brands that appeal to more affluent consumers, say they are seeing more full-price buying by their customers, that their customers have an appetite to spend up. So you're really seeing the tale of to consumers, the wealthy and the less wealthy. And the wealthy consumers are still spending. The wealthy are still spending, yes.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
And the lower income are a bit strapped. With Target and Kohl's, they both kind of called out their consumers being under pressure. But it's also no coincidence that both those companies are struggling from their own missteps. Target, for instance, had to deal with a boycott from its customers over its DEI programs. That could have contributed to some of its sales weakness.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
Now, retailers are being very cautious about the coming year, and some have withheld guidance altogether due to tariff uncertainty. Others, like Macy's and Abercrombie, have reduced their profit or sales guidance for the year. So there is definitely a tempering of expectations as the year progresses.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
A lot of them are expecting rising tariff-related costs, and that should hit them at the back end of the year. Suzanne, thank you so much for coming on the show. Thanks for having me. I appreciate it.
WSJ What’s News
What’s News in Earnings: Retailers Scramble to Respond to Tariffs
Thanks for having me.