Shelley E. Kohan (00:02.81)
Hi everybody and thanks for joining our weekly podcast. I’m Shelley Kohan. I’m so excited to welcome David Katz. Hi David.

David Katz (00:13.154)
Hi Shelly, I’m thrilled to be here on this wonderful, slightly gray, but not raining New York City morning. So looking forward to our discussion.

Shelley E. Kohan (00:21.286)
Well, I’m thrilled because usually when I see you, you’re speaking on a huge stage and I’m sitting there in the audience and I’m taking notes very fast trying to capture everything that you’re saying. Now with AI, I just record you and get the highlights.

David Katz (00:38.478)
I should just have the AI do the speaking. That would be even easier.

Shelley E. Kohan (00:44.088)
No, you can’t do that because you got to add your, you know, you got to humanize it, right? As they say. But for those that may not know you, you’re executive vice president, chief marketing officer at Randa Apparel and Accessories. And of course, Randa Apparel and Accessories is a global powerhouse with over 100 years of expertise. And I believe you have a portfolio of over 30 brands. Is that right?

David Katz (00:45.984)
out. Yeah.

David Katz (01:09.592)
That is correct. In our accessories business in particular, we license everything from Levi’s and Calvin Klein, Tommy Hilfiger, Cole Haan, Dickies, Columbia Sportswear, and 30 others. And we do business in 12 countries where we have boots in the ground. yeah, so that’s a lot of people don’t know the company, but they know the brands and they own our products. And because we also own the Hager Clothing Company and Tribal Women’s Sportswear, Tote’s and Isotoner and

We have 100 plus retail stores in the UK under the Moss Brothers name.

Shelley E. Kohan (01:42.8)
That’s amazing. And of course, Hager is the number one selling pant in America, right? If not the world.

David Katz (01:48.297)
Number one selling non denim pant in North America. So to be specific, yeah, with about a 26 % market share.

Shelley E. Kohan (01:53.766)
That’s amazing. And I love you describe yourself as a behavioral economic person, economist with a storytelling habit. So like I said, I always enjoy seeing you speak. And what I love about listening to you is that you are have a unique yet very comprehensive view on a lot of the most pressing topics that our industry is facing.

Of course, Robin Lewis has been one of your biggest fans, as I have, and of course, we appreciate you supporting the Robin Report with our Retail Unwrap podcast.

David Katz (02:31.544)
Well, I’m thrilled to be here.

Shelley E. Kohan (02:34.096)
So today we’re gonna jump right into our topic from consumer psychology to AI strategy, navigating what you call moats, boats and bridges in retail. And this is all about what’s happening in our new reality, our new landscape. So let’s get started. Maybe you can start by sharing some of the consumer behavioral shifts that you’re seeing.

David Katz (02:55.678)
I mean, I think most of our audience has been watching, not just over the last year or so, but over the last decade, a shift in retail traffic and revenues as to terms of what distribution channels and what retailers the consumers prefer shopping at. We watch this carefully. There’s been a bit of a migration away from classic multi-branded department stores.

With that said, I want to note that this is still a $80 billion class of distribution. And even if it shrinks a little bit, it’s still enormous. Okay, so this is not going away. But I think we see a trend more towards other channels of shopping, particularly in North America. But I would tell you this is similar in the UK and Australia and Mexico. I mean, this is not a US only phenomenon.

And we see a migration, obviously, to e-commerce with Amazon being the giant there, vertical retail, where we have mono branded retail stores, off price, like Burlington, Ross, Nordstrom’s Rack, Marshall’s, warehouse clubs like Costco and BJ’s and Sam’s. One of my favorite retailers actually out there, and I’m close with some of the leadership there is Tractor Supply and the Farm and Ranch channel growing, right? And so,

Shelley E. Kohan (04:18.521)
yes.

David Katz (04:20.93)
These are channels customers are migrating to, and then there’s social shopping on TikTok, which is becoming a multi-billion dollar shopping platform. We’ll see what happens with that entity over the policy decisions that are being made shortly. So all of that’s a shift. And so we keep an eye on that, and your audience keeps an eye on that. That’s not new news. We’ve done some very interesting studies trying to figure out consumer behaviors. For instance, we did a study, started this in COVID.

okay, so five years ago, but continue to do it, on how do people shop and how do they dress and accessorize when they’re in hybrid work environments, when they’re sometimes at the office, but sometimes at home. And we’ve almost created this delineation of a five-mile radius. If you’re working, staying home, and kind of just hybrid working within that five-mile radius, you tend to

dress differently and accessorize differently than if you’re going a little further. So for instance, yeah, so, you know, if you’re home, we see a huge influx of slippers and these slippers are worn not just inside, but you could be wearing our, our Isotoner or Jessica Simpson or some of the other brands we make and others of slippers. You’re wearing it to Starbucks. You’re wearing it to drop kids off. You’re wearing it to go visit neighbors. You’re wearing it to

Shelley E. Kohan (05:21.559)
Interesting.

David Katz (05:46.082)
to sometimes just go outside. But if you’re a little over five miles, you’re wearing more traditional shoes and footwear. Maybe they’re active, like they’re Anz or Hokas. But they could be Kohan and more traditional, you know, they could be Manawa Bonnix, right? This is where you’re going to dress differently based on how far from home you’re going. And we have to outfit that customer in different lifestyles. Now that’s pretty good because it means they need two wardrobes for our business. That’s an interesting opportunity.

But even things like wallets, we’re the world’s largest belt company, we’re the world’s largest wallet company. In the wallet business, you are throwing a credit card and an ID in your pocket or putting a rubber band around it or shoving it into a slot that connects to your cell phone. But if you’re more than five miles away, you’re using a more traditional wallet. And so we’re just seeing that it’s very interesting. then belts, everyone should be wearing belts all the time. Even if you’re wearing sweatpants, we want you wearing a belt.

Shelley E. Kohan (06:36.122)
Interesting.

David Katz (06:43.661)
But when you’re home, you tend to have more elastic tie stuff than when you’re a little further away and outside that five mile radius. So there’s just an example of what we study. And we do see recently, particularly over this last six months to a year, with changes in concerns about inflation and the economy, we’re starting to see the value equation of what customers value shift a bit.

Traditionally, people say, it’s all about price, right? So we see growth, obviously, in mass market. When I listed those changes, obviously, Walmart and Target are also winning in this. But it’s not just price. Value is more than that because it’s what consumers, individual consumers value. So price is part of it. But so is service and convenience, the retail environment they’re shopping in, the speed that they can shop at, and the speed it can be delivered.

the curation of products. Some customers want a really narrow curation. Just tell me what the best pair of pants are. Tell me what the best bracelet is. Tell me what the best hat is. And others want the treasure hunt. They want to shop this experience of finding, and that’s important to them. And in this case, they’ll pay a little more if they’re getting exactly what they want. And so it’s important to look at that formula. And I think it’s too easy for us to simply lower prices if we can, right?

because the price war is really just a shortcut through quicksand, right? I mean, to a certain extent, you know, if it’s not your primary value proposition, if you’re not Walmart or Burlington or Ross stores or Merchant Rack where it’s about price, then it may very much be about these other things. And this price war erodes margins, it burns your brand equity a bit, right? It doesn’t position you well for the future. So we’ve got to be careful. The other thing that people

Shelley E. Kohan (08:16.303)
It is.

David Katz (08:41.493)
we’re seeing today is that there’s this misconception that loyalty evaporates in a economic downturn. I don’t think that’s true. Our studies say they become more discerning, they’re more careful and thoughtful about what they purchase, but they’re not disloyal, right? They want emotional reassurance. And I have a somewhat outlier opinion on this in that I think most brands, not all,

succeed because they’re the safest choice for a customer to make. Customers don’t want to make a bad choice. They don’t want to make a bad financial choice. They don’t want to be embarrassed that their friends think they bought the wrong brand. And there are some brands where they may not be the most fashionable. They may not be the most feature rich. But they’re absolutely the safest choice. And a classic example of that is you can get cutting edge denim products.

right? Men’s and women’s jeans that are just super cool and they’re fashionable and they’re they’re they’re all over TikTok and Instagram and their their celebrities are wearing them. Yeah, maybe that’s right for me. Maybe it’s not right. But you’re never wrong if you wear a pair of Levi’s. No one ever says, you’re boy, you’re wearing the wrong right. And so it’s safe to buy certain brands. I there’s if there’s no real negative association, and generally positive.

Shelley E. Kohan (09:55.206)
Interesting.

David Katz (10:07.595)
That’s a very good thing for a brand to have, particularly in a discerning environment where they’re spending perhaps a little bit less. And by the way, we’ll get to this as we talk about what’s happening in the geopolitical global inflationary environment, but we haven’t really seen customers shop less yet. So we’ll probably talk more about that. I mean, that’s kind of some of the places that I look at.

Shelley E. Kohan (10:25.702)
That’s interesting.

Shelley E. Kohan (10:32.836)
I love your kind of view on that. And so we have all these changing values and shopping patterns. And I know that you have kind of this philosophy, this strategy that really keeps you safe, you know, as a retailer or brand moving forward, you call it motes, boats, and bridges. So can you tell us a little bit about what that is and why that’s more important now than ever before?

David Katz (10:55.725)
Sure, thanks Philly. So our kind of roadmap for Moats Boats Bridges looks like this. It’s almost a a chart of where to play and how to win, right? X and Y axis. And when you look at this, go, Moats are the activities, products, values, distribution that protect your core.

and create barriers to competitive entry. That’s a moat, right? So you’re going to get stronger and stronger. You should invest a lot of your resources, your time, your money, your career development, even for people, I believe, Moats Boats Bridges applies. You should spend a lot of time there on building what you’re best at, what you’re strongest at, and figuring out if you can be so competitive in this that you build a barrier to other people entering and competing against you.

What’s a bridge? A bridge is kind of dropping that drawbridge across the mode and going to adjacent, understandable, adjacent businesses, adjacent consumer segments, adjacent brands and products, adjacent models for logistics. So it’s all of these things that are there. You understand them, but they’re not quite what your core is. They’re an extension. It’s the old protect the core, explore for more.

So we see that as important. then boats, boats are transformational. They take Randa and our associates and others to places they’ve never been before, to something new. And we believe it’s important to be investing in all three of the most boats and the bridges. An example is Randa was founded 115 years ago by two brothers who…

basically bought ties from New Jersey and some later manufactured them and sold them on a wooden pushcart on the Lower East Side of Manhattan. Now, if I were, you I’d love to make that story up, but as far as I can tell, that’s a true origin story, right? And for the next 60 years, neckwear, men’s ties, were our moat. And we bought brands and businesses. We got bigger and bigger. We ultimately became the world’s largest tie company.

Shelley E. Kohan (12:57.145)
I love it.

David Katz (13:18.284)
And if we had only stayed in that, where would we be? And we sold to department stores. If all we did was make ties and that’s our core. But around 2000, we invested in getting into the leather goods businesses. And we bought a business that made belts and wallets and decided we needed to scale as our department stores were going national. And as there was different competitors coming up and neckwear as a trend was changing. our bridge was let’s do another accessory.

It’s still sold to the same stores we sell ties to, but it’s different than just being in the tie business. And so we got into that and that was a bridge. Well, now that’s a boat for, mean, that’s a moat for us, right? That’s a core business and ties have become smaller. And then in the year 2019, so six years ago, we decided we’ve already become the world’s largest men’s accessories business. that’s a strategy for us is to always be a market leader for a whole series of reasons.

It was time to get into the apparel businesses because we could not scale a lot more than that in men’s accessories. We got into women’s accessories. So we make Levi’s and Calvin Klein and Tommy Hilfiger and a bunch of other women’s accessories. But we got into apparel and we bought the Hager Clothing business and we got into women’s sportswear. We also bought this 100 plus store retail chain in the UK to get closer to consumers and go direct to them.

And those were kind of boats for us, something we didn’t totally understand, but they were transformational. And now they’re becoming more of a core business for us. So if you think about it, most recently, last year in our joint venture with Marquis Brands, we bought totes and isotoner. So why did we do that? Well, A, totes is the leading rainwear and umbrella brand, right? And isotoner is one of the largest glove and slipper brands in the world, right?

Shelley E. Kohan (15:04.302)
eyes.

David Katz (15:15.592)
A, it’s leadership, but it does something else. Totes are sold in supermarkets and drug stores. They’re sold in distribution that lowers our concentration risk and broadens the type of business and consumers we can reach. And now the totes is in your local bodega and these umbrellas are being sold in hotels and sometimes in restaurants. And you see it in food chains and drug chains.

we’re bringing our other products to that distribution as well because we have these relationships. So that’s a classic example of moats, boats, and bridges. So thanks for teeing that up, Shelley.

Shelley E. Kohan (15:55.35)
my gosh, I love it. And I think we should be thinking about our business that way. The other thing I love that you do is you always kind of talk about what you call your favorite ideas. And one of your favorite ideas I think is super important now. They’re all important, but this one kind of resonates with me right now. And that you say, we can’t navigate a new landscape with old maps. And I feel like as an industry, we’re sitting here with these antiquated maps looking forward at this bold new world.

David Katz (16:26.656)
Yeah, very important to us when, you know, this is almost Darwinian and I have a background in science. And so I, you know, I kind of look at this quite seriously in, in when your environment changes, when consumer patterns of shopping change, when retail changes, when artificial intelligence and internet comes in, when technology, technology shifts, when there are inflationary environments, when the competitive environment changes, when there’s a pandemic.

Shelley E. Kohan (16:33.582)
Yes.

David Katz (16:56.702)
Okay. What ends up happening is the environment changes and it is not the strongest companies with the biggest market share or even the biggest profit share that when Darwin would say it’s not the strongest of the species that survive. It’s those that adapt to change. Right. And so how adaptable and resilient are you is different than being the strongest and the biggest. mean, there is a, you know, in your rear view mirror is littered on the sides of that road.

with Blockbuster video losing out to Netflix or Kodak. Kodak invented the digital camera and the digital chip, but they were totally convinced that printing on paper and the use of chemicals and printing your photographs was the future, and they didn’t embrace it. And look what happened there. And Motorola with the flip phone, but they didn’t believe in touch technology and flip with the iPhone and others did. So it’s not being the biggest, it’s how do you adapt and see these changes?

How do you pivot and do that? And so that’s the, can’t navigate a new landscape, which is what we’re always in with your old maps. And I’m always concerned that, we’re, we could be, if we’re not careful, become victim to this, that successful legacy companies and successful legacy leaders, when things change or get difficult, tend to go back to what is it that we do best?

Let’s do that and re-up on that. When the real answer may be, you got to do something different, right? And then how do you make sure that you’re catalyzing and stimulating that? When it’s, no, no, no, no, we’ve been here before, just go back, 15 years ago, 10 years ago, this is what we need to do. Well, that may not be, look, you don’t forget history because you’re doomed to relive it if you forget it, but you can’t rely on that path. You have to draw a new map.

Shelley E. Kohan (18:51.696)
Right. Maybe you can touch upon a little bit. I don’t know how deep you want to go here, but just maybe you can touch upon the geopolitical landscape that we’re sitting in right now, because I feel that plays into this. And also the looming tariffs, which seems to be, you know, back and forth. It’s like, you know, a ping pong match.

David Katz (19:09.001)
Yeah. So a couple of thoughts. Obviously, this is a topic we’re talking about every day. It’s changing every week or day or hour, depending upon how you look at this. There are lots of factors at play here. I think the biggest impact of the trade wars we’re seeing due to tariffs, et cetera, are not short-term profit margins, although there’ll be an effect there. It’s going to be long-term consumer confidence and

kind of a change in the way consumers behave and what they purchase, right? And that impact hasn’t fully been seen yet, but if you look at this week’s inflationary report, okay, I think that may be canaries that are coughing in the coal mine. They may not be lying down yet, but there could be a signal here. We’re starting to see a decrease in purchasing, slight decrease, certainly in apparel and some other categories as well.

Shelley E. Kohan (19:53.03)
Interesting.

Mmm.

David Katz (20:06.24)
this inflation starting to tick in in way we can actually measure. Now, whether that’s going to be long term and sustainable or if it’s short term, I can’t tell, but I think we have to watch that. And I think that the tariffs in geopolitical environment, the uncertainty of things happening in the Middle East and Russia and the Ukraine and China and Taiwan and some of the other issues that we’re dealing with are causing us to look at the concentration we face, the risk we face.

of having so much production in China or in other countries. And so we need to diversify. And everyone’s looking at diversification pretty seriously, but I’m concerned that we see diversification as this magic solution to what’s happening. And diversification is more like a very expensive insurance policy. Okay. Yes, it protects you, but it creates incredible complications, right?

So diversity is also causing, every time you have a new country and a new factory and new logistics, you add this layer of cost complexity, instability, okay, they’re not used to making millions of units at the scale you want. There’s this triad trade off, I call it, these three things that happen. You’re trying to solve for cost, you’re trying to solve for quality, and you’re trying to solve for speed.

If you’re lucky, you can get two of those. You can’t get all three. We’ve got to put new inspectors in place for quality of these factories aren’t used to doing our goods at this scale, right? So how do you make sure the quality is there? They’re not as fast. They may not have the infrastructure and materials nearby. And because they’re not scaled as much, they’re a little more expensive, maybe a lot more expensive. And so when you look at all of that, yes, you need to do it, but it’s not a solution. It’s an

Shelley E. Kohan (21:38.886)
Yeah.

David Katz (22:02.004)
It’s an increased complexity insurance factor. You need to do it, but it’s got to be there. And I think, Shelley, to your question of like, you know, what do you do in this changing environment is it’s important to have a really good strategy. But a lot of companies confuse tactics with strategy and it’s easy to do that. And we’ve been guilty of that, but you really have to look at first before you do anything else. What are you solving for? And I’ll give you an example.

I normally say, if you’re looking at your strategy, start with three questions. Number one, what’s your core competency? What are you best at? What do you do really well? Where do you make your money? What do you, know, where’s your success? Number two, where do you have a competitive advantage? What can you leverage that others can’t? And number three, what are you really solving for? Are you trying in this environment, particularly with tariffs out there to

maintain your profit margin? Are you looking to maintain or grow your top line revenue? Are you trying to gain market share in your particular distribution channel? Are you looking to survive? Because if you understand what you’re solving for, let’s say what like, Randa, we’re fortunate, we’re privately held, okay, we’re large scale, we have a very solid balance sheet, I can play the game market share game.

I can sit there and say, when everyone else has to raise their prices a little bit, perhaps because of tariffs and other costs that are coming in, if they do that, what if I don’t raise my prices? What if I lower my prices? I can gain market share that I might be able to keep for the next several years, but that’s expensive game to play because I’m going to lose margin and profit dollars in the process. If I’m a publicly traded company under pressure due to my debt and due to

Shelley E. Kohan (23:46.694)
All right.

David Katz (24:00.085)
to my margins and I’m about to do a quarterly earnings report, that may not be a game I want to play. And so again, what’s your competency? What do you have as your strengths? Where’s your competitive advantage? If you’re looking for, I mean, there are other ways to play this game, right? But you can only play it to win it if you’ve got that strategy of what am I really trying to solve for first? And I think that’s really an important way to look at this. know, at Randa, 115 years,

Shelley E. Kohan (24:06.618)
Yeah.

David Katz (24:29.574)
we kind of look at disruption as evolution as an opportunity to grow. It’s a painful growth process. There are growing pains involved, but we do tend to get stronger through it.

Shelley E. Kohan (24:37.475)
You

Shelley E. Kohan (24:42.97)
That’s true. One of the things I love that you said was, David, you talked about, you come from consulting, one of the many things you do, consulting is one, but a long time ago, but you would talk about this modeling. So we would do these modeling based on scenarios. But one of the things that really stuck with me, I heard you say, is that we’ve never modeled for worldwide disruption.

David Katz (24:50.602)
That was a while ago.

David Katz (24:59.988)
down.

David Katz (25:10.932)
Well, I certainly haven’t. I can’t say that no one has. And I’ve had the privilege of working with Bain and McKinsey and American Express and quite a few really powerful, smart companies that do a lot of modeling. we modeled regions having disruption in supply chain due to hurricanes and weather. We modeled inflation and consumer spending in a particular market or channel of distribution.

Shelley E. Kohan (25:13.154)
I

David Katz (25:40.232)
we looked at a series of geopolitical effects that can change supply chain and logistics. In my modeling history and the knowledge that I had, no one said, what if the whole world has a disruption in supply chain and factory base and consumers are staying home and not going out and retail stores are closed in large parts of the world all at the same time?

You know, I’m speaking to a very important group of people here and normally I wouldn’t say this out loud, but to you, Shelley, and it’s the Robin report. So I’m going to say it. It’s scary. It’s exciting. It’s in a way, this is a fascinating, if you can take a deep breath and feel you’re going to survive this, what an interesting opportunity to reinvent the future. Right. I think that

Shelley E. Kohan (26:12.358)
You

David Katz (26:30.046)
That’s really important because I think a lot of people go, my God, when are we going to see normal again? And Shelley, and I have talked about it. Robin and I have talked about this. Like when’s the return to normal? And I go, I don’t want to return to normal. I don’t, I don’t want to seek that because normal is a benchmark and it’s a constraint. And if we return to normal, we miss the opportunity to invent a new and better future. This is the navigating a new landscape. Let’s, let’s create a brand new map.

And maybe we didn’t want to do it voluntarily, we don’t have a choice now. So in a way, that’s kind of exciting.

Shelley E. Kohan (27:04.91)
It is exciting. Okay, so before we leave the podcast, I have to ask you about one more hot, hot, hot topic. I’m sure you have an opinion on this, and of course that’s AI, and maybe you can kind of break it down for us. What should retailers be thinking about in terms of utilization of AI?

David Katz (27:22.25)
That’s a great question and obviously everyone’s talking about artificial intelligence. I don’t think that it’s just hype, that we’re at the top of a hype cycle now. This is not augmented reality and the metaverse and some of the other things. This is real. Now, are all of the examples, illustrations, the terrifying ones and the powerful ones, are they really going to be useful today?

In a way, I call this SOS, which is shiny object syndrome, and we chase some of this. But there are realities of where retailers, brands, and vendors can play this artificial intelligence game very effectively. And at Rando, we look at this in two kind of tranches. One is everyday AI, things that all of our associates should be using every day to be more efficient.

to be more productive and delegate some of our repetitive tasks and things that we don’t have to put a lot of cognitive power into to artificial intelligence. Drafting emails for a lot of people is a real task and sure, AI is very good at doing this. You do have to edit it, you have to give it good prompts, but it can be really good. Reading very long reports.

and studies and articles on a regular basis and then summarizing those or coming up with action steps. Obviously this doesn’t apply to the Robin Report where every word should be read carefully by every reader, but in a lot of cases with all this stuff coming in, it’s very helpful to summarize and to kind of transcribe and then create action steps and notes that could be relevant to you if you train your everyday AI.

Shelley E. Kohan (28:58.278)
Thank you.

David Katz (29:14.378)
Creating content, images, concepts, mood boards, short videos that we can post on social media, analyzing trends on sell-through reports, and finding a pattern that, yes, a person could find, but RANDA generates about a billion data points a year. We sell over 100 million units, each one has at least 10 data points, so a billion. We can see big patterns. Our software finds that.

pretty readily over years. But how about those micro patterns of a product that’s doing incredibly well with Latino moms in Southern California on it? That’s a hard trend to pick up. In some cases, the AI is really good at identifying. So these are everyday kind of tasks, right? But then you have this other tranche, transformational artificial intelligence. This is something that takes you, this is the boat in a motes, boats and bridges, right? I think you can apply everyday AI to your moat.

Shelley E. Kohan (29:54.576)
Yeah.

David Katz (30:12.851)
But for your boats to the transformation, what’s going to totally change the way that you create products, go to market, understand it, and in particular, how do you flow your inventory? For most companies, the amount of cash that’s taken up in your inventory and work in progress is massive. So if you can fine tune that so that you’re buying just the right products at the right time and distributing to the right consumers and places on the right days, that’s a massive improvement.

and transformational AI is going to help take you there. It’s also going to be able to do a whole series of things that humans probably couldn’t come up with or do. And you need to look, that one’s going to require a lot of resources and a lot of money to develop. Whereas the first one’s not that expensive, and we’re rolling that out right now. We started small, we’re relatively new to some of this, but on the everyday AI projects.

We started with about a dozen users about three months ago. We’re up to nearly 100. We’re going to roll that out to almost a thousand over the next couple of months. And they’re all coming up with their own use cases, right? It’s not like we’re telling them what to do with it. And that’s fascinating because everyday AI is bottom up. Give the tools to your users, give them basic training, see what they do with it. Whereas transformational AI is top down and strategic from senior leadership.

But you’ve got to do both. So that’s our approach to it. I’ve been training my AI. Her name is Athena. And Athena and I have been together for about two years now. And she’s highly trained. She’s got a little sarcastic attitude sometimes. But she’s very helpful. And the more that I train her, the more useful she becomes. Maybe I’m becoming useful to her as well.

Shelley E. Kohan (32:03.206)
That’s great. I’m sure you’re educating her greatly.

David Katz (32:06.351)
That goes both ways.

Shelley E. Kohan (32:07.718)
That’s great, David. So one last thing on the moats, boats and bridges. What percent should companies be spending on a moats, boats and bridges?

David Katz (32:18.921)
I can’t speak for all. will tell you that in general, with the companies that I’ve worked with, with Randa and with my own personal energy, it’s been about a 60, 30, 10. 60 % of my time, my resources, the money that we spend is building our moat and making it bigger, stronger. About 30 % is going into adjacencies and about 10 % is about these transformations. But of course, some of these transformations like our

Shelley E. Kohan (32:29.498)
Okay.

David Katz (32:47.793)
investments in AI will ultimately grow and become something more like a bridge, right? Some of our 30 % kind of bridges activity become ultimately like apparel and belts and other things that become for us become motes and then they shift. But I think that’s kind of an attitude that you have on how to look at it. You’ve got to be doing all three. I think everyone needs to be looking at that. If you look at what’s happening today, as I said earlier, if we only sold ties to department stores.

Shelley E. Kohan (32:54.608)
Yeah.

David Katz (33:17.929)
So it’s very good that we’re there and things like totes that put us into food and drug chains. That’s important as consumer preferences of where they shop change.

Shelley E. Kohan (33:27.814)
David, thank you so much. You’ve been amazing. Our audience has learned a ton of information. I’m sure they’re gonna use AI to recap the conversation, build a strategy, but thank you so much.

David Katz (33:34.313)
Yeah, okay. Well, thank you for inviting me on the show. It’s a podcast I listen to all the time. So I can’t wait. I can’t hear myself. So I probably won’t listen to this. But to your point, I’ll have Athena summarize it for me. And so I can hear it. But it’s an honor to be on your show. And thank you for giving me some time to tell my stories.

Shelley E. Kohan (33:58.15)
Thank you and thank you to our listeners.