The Best One Yet - 👕 “The Yeezy Premium” — Kanye + The Gap. Dollar Tree’s $2. Star Wars’ cruise strategy.

Episode Date: October 1, 2021

The Gap stock popped because, you know, Kanye — So we’re breaking down the size of the Yeezy Price Premium ($58 per hoodie). A new dollar store opens every 6 hours in the US, but Dollar Tree’s newest product is… $1.50. And everyone’s focused on Disney’s Disney+ streaming, but its real profit puppy may be a Star Wars hotel.$DLTR $DG $GPS $DISGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Friday, the Real Friday, October 1st. It's October 1st and the government is not shut down as at this recording. Also, what are you wearing right now? What are you going to do? I'm wearing darn tough wool socks.

It's that time of year. Are you going to toss on a cardigan over there? Well, it is apple picking season. And I am going apple picking tomorrow morning. Sorry, Jack. Don't mind me. I'm just putting some gourds in the doorway. Just let me put them there.

Snackers, today's pod is the best one. October 1st, TBOY. Jack, what's our first story? The gap. Their stock jumped 5% Wednesday because, you know, cognac. Yeah, we're breaking down the numbers on the Yeezy Premium. Real thing. Easy Premium. For our second story, Dollar Tree's newest product is...

Wait for it? Things that are a buck 50. Yeah, the dollar store, it's dead. Yet the dollar store is thriving. For our third and final story, everyone is focused on Disney Plus. Video this, streaming that, shmovie this. But Mickey's real profit. puppy could actually be a Star Wars cruise hotel. It's actually run by stormtroopers. It is. It's,

that weird that's run by stormtroopers? I think they're like good employees. They're good at taking orders and they don't accept tips. They also don't talk much. I feel like he asked for their ID. They all kind of look the same. Snackers, before we get those three great stories. Wonderful, Nick. We survived September. September. A wonderful month for hay rides. A terrible month for stocks. No. Nick's being serious since 1950. September is the worst month for stocks. Yeah, more slip and slide in September than in any other month in the year. All right, it's October 1st. How did we do this September?

Well, Jack, I'm checking the scoreboard for us over here. And the S&P 500, our buddy, fell 5%. Yeah, worst month since March of 2020 for stocks. And remember, that was the pandemic freakout. I don't know. Is this because September is a Virgo? What's going on over here? Did you have to look that up?

I did have to look that up. Is Mercury in retrograde right now? Let me look that up. Please, Jack. Well, Thursday's the new Friday Snackers. September. You're the new. Monday. No clear reason that September's always brutal for stocks. It could be that big money managers

are selling before the end of the quarter for like tax purposes. I mean, someone's got to pay for back to school, Jack. But there are four quarters in the year, so this still doesn't explain. No idea why this particular quarter becomes the worst of all the corners. Either way, Nick and I have one thing to say to September. September do less. Leave the stock markets alone. Let us hit our three stories, September. You're tuned into snacks daily. We spoke to the lawyers and we got to get something illegal out the way. The snacks about to hear ain't food.

It's air candy. They don't reflect the views of the robberhood family. It's all informational just so. We're not recommending any securities. It's not a research report or investment advice. Not an offer or sale of a security. Snacks is digestible. Business news for you.

Robohood Financial, LLC, member FINRA slash SIPC. For our first story, the Gap, they are dropping a new Kanye sweatshirt. It immediately sold out and then Gap stock surge 6%. This hoodie shows the easy price premium. Okay, first of all, Snackers, we should let you know. Your mom and Kanye, they've got one thing in common and just one thing. They've both had a financial relationship with the Gap. Yeah, 1997, great year.

Now, back in June, Jack and I told you about Kanye West ambiguously partnering up with the Gap in a very, didn't exceed this coming kind of a partnership. All we knew was the clothing would be designed and inspired by Kanye and manufactured and distributed by the gap. Yeah, what could go wrong? The first product was a puffy round jacket with no zipper. You know, like I reinvent the wheel here. It was like a blazer slash puffy warm coat.

It actually looked pretty good. You're going to wear this to the mech all or you could just wear it down the street. If you look inside that puffy new coat, they also unveiled a new logo for this class. Interesting. Which is the classic blue square logo. Instead of GAP in the middle, it says YZY. But here is the question that Jack and I wanted to answer the whole time. And now we're starting to get some data.

Was this deal worth it for the gap? To find out, let's look at their second product, which they call the perfect hoodie. Behold the perfect hoodie snackers. Now, Kanye is known for a colorful hooded sweatshirt or two and known for saying things. Yeah. Any paparazzi picture of Kanye, he's probably wearing a colored hooded sweatshirt. And he probably has his mouth over. That's true. So the gap just dropped this week, the perfect hoodie under the Easy collaboration on Wednesday.

People expected this to sell. But this thing sold out like within hours on Wednesday, insanely fast. I tried to buy one. Okay. And if you want it in black, you need to wait six to eight weeks. Interesting. Jacks had spent six things from the gap this week. What's going on over in the Kramer House old? Podcast research, Nick. Where's the thing, snack? Because the gap, they haven't sold out of an item since they introduced the elastic waistband, khaki in 1996. Yeah. Or a size 18 husky jeans because those jeans don't exist.

Nobody's judging you, Jack. It's totally fine. Now, here's the key about the perfect hoodie. It costs $90. Yes. And Nick and I have been to the Gap once or twice. A couple times. I could tell you they've been making hoodies just like this for decades.

So Jack and I jumped in snack style here and we found a nearly identical hoodie on the Gap website almost the exact same as the new Yeezy hoodie. And that sweatshirt, which is. been available for years is $32. Not $90. $32. Yeah. The only difference is like there's no drawstrings on this one. Yeah, the Kanya one has no drawstrings. So the implication here, this simple, single, Yeezy touch adds $58 of value to a gap hooded sweatshirt. Well, part of that extra $58 that gaps bring it in from this Yeezy sweatshirt, some of that's paying for the extra cod on the Yeezy sweatshirt. We should point that out. That's right. Kanye is from Chicago. He needs to stay

worn. It's an extra thick cut. You're going to wear this three seasons out of four. But the rest of that extra 58 bucks for the gap is pure profit for the gap. So Jack, what's the takeaway for our buddies over at the gap? Fifty-eight dollars of profit per sweatshirt adds up to a billion dollars. Snackers, attaching Kanye's design and the Yeezy brand, that let Gap charge a way higher price and people are immediately paying that way higher price. In fact, this hooded sweatshirt is so popular, It's already selling on reseller websites for $10 times $90. $900. A day later, this is now a $900 sweatshirt when you don't buy it at the gap.

This is a 10-year deal between the Gap and Yeezy. And the Gap expects $150 million in revenues on Yeezy products next year. Yeah, we did the math on that too. That means they are going to sell potentially 1.6 million Yeezy hoodies at this way higher price. The stock for the Gap jumped 5% on Wednesday on news that. that this hoodie sold out in hours. Yeah, and all in, UBS, the bank, they think that the Yeezy line at the Gap

is worth a cool billion dollars. We're talking about a unicorn sweatshirt situation. Now, the Gap and Yeezy didn't share the terms of the collaboration that they announced in June. But here's what we're thinking. If the Gap paid under a billion dollars for this deal, and they probably did, then this deal was worth it.

For our second story, the Dollar Tree stock, it just searched 17% because the era of the $1.00 is over. The dollar store is dead. It's dead. The dollar store has never been more alive. They're just poetic over there. What's going on? You've got to write scripts.

This is incredible. Now, wild stat here. Jack, you want to share this one? This is a shocker. There are more dollar tree stores in the United States than there are McDonald's. All right. Before you sit down, stand up and sit back down again, get this. A new dollar store opens every six hours in the United States, according to the hustle.

Sadly, the higher the poverty rate, the more. dollar trees there are in your neighborhood. And out of all those dollar stores of which there are an absurd number, the dollar tree store is the second biggest chain. It's a publicly traded stock and the company's worth $21 billion, which is about one lift. It's behind dollar general, the biggest dollar store chain in the country. And the dollar tree is pulling out 30 cents of profit on every single one of those $1 items that they're selling. That is a surprisingly high profit margin for someone selling stuff so cheap. But wait. But wait. there's more. As of this week, there is now a rebrand going on over an aisle 6. The dollar store should now

be the buck 50 store. Yeah. The dollar tree just announced that they're up in prices from a dollar to a $1.25 and a $1.50. And a dollar and any amount more money. It could go any which direction. And if you're upset about this, you can blame inflation. It's hard to continue charging a dollar when supply shortages, higher customer demand, and higher wage. are pushing up prices across the country in every category. So what was $1.2011 now cost a dollar in like $0.22. And in just the past year, something that cost a dollar is now $1.5. But here's what Jack and I find fascinating about dollar tree.

This unprecedented dollar tree move, it's actually got some precedent. We noticed. Unprecedented was actually a fact check that you just immediately corrected yourself there. It's the best kind of fact check and the best kind of. there. In 2019, we covered it on this pod. That's right. Nick and I have been doing this pod for a few years. Aging ourselves. Dollar Tree launched Dollar Tree Plus with items $3 and $5. And they're adding $1,500 stores selling these $3 and $5 items next year. That's a lot of stores. You can now walk into a dollar store plus and pull out a $5 bill to pay for a frozen steak. And Dollar Tree,

they don't stop. They won't stop. They're launching a third chain on top of this Dollar Tree Plus. They're calling it the combo store, which is stuff that's a dollar and stuff that's $3 or $5. Pretty simple formula. It's stuff from one of their first stores and then their second concept store. This isn't rocket science, folks. No, it isn't. And they're adding 400 more of these new combo stores as well in just the next year. And the execs over at corporate, they're pretty happy about it because sales at the plus stores are growing six percentage points higher than sales at the regular stores are.

And then Tina over a corporate, went over. to her boss and said, hey, get this, the profits at these plus stores, they're a whopping 13% more at our plus stores than our regular stores. And then Tina got her socks knocked off when she learned the average shopping cart at a plus store is twice as valuable as at a regular store. Let that sink in snackers. So if you walk into a dollar plus store, you're going to buy the $5 placker that says blessed and cursive on it. They're selling more of those and they're selling them at a more profitable rate. Oh, live, laugh, loves.

You got to love it. So, Jack, what's the takeaway for our buddies over at the dollar tree? The best test of willingness to pay is to just launch it. Yeah, Snackers, back when Jack and I were in business school, we were taking a bunch of classes on entrepreneurship and they teach you how to figure out how much a customer is willing to pay with a few of these things. To figure out how much a customer will pay, you can run a survey. Okay.

You can do focus groups and ask them that way. Nice. You can do an auction. Classic. Or you can do a conjoint. analysis, whatever the heck that is. No one really remembers. But the reality we've noticed is that the best test of a price someone is willing to pay is to like simply just launch the thing. Get it out there. If Bob's paying a dollar for your product and you wonder if he'll pay three for basically the same thing. Just put it out there. There you go. Charge three dollars. See if people will buy. Well, each new dollar tree plus store wasn't just a store. It was an experiment for the dollar tree. Now Dollar Tree knows customers willingness to pay and they're going to apply those learnings across their 50.

15,000 stores. Live, laugh, love. For our third and final story before the weekend, Disney is launching a Star Wars full weekend experience. Never seen this before. The ultimate profit puppy could be a Star Wars cruise on land in Florida. Whoa. First of all, to announce this thing, these are Disney's words.

This is one of the most innovative and immersive experiences we've ever created. It is first of its kind. You're going to start by traveling. in a launch pod up to the cruiser bridge, please leave your lightsabers at the door. Okay, Jag and I read this press release. We saw so much ship terminology, we thought this was a cruise. We actually thought this was a cruise. I know.

I thought it was a Star Wars themed cruise on the seas. Three hours out of our day, we were thinking this was a cruise until we did more research. It's actually an immersive Star Wars themed hotel. It's the opposite of a cruise. It's on land. And it opens in March 2022, but they're taking reservations starting this month. Yeah, this is like Disney World and Disney's cruise line. collided with a millennium falcon.

This is an entirely new concept in the world of entertainment. I mean, it's going to make you feel like you're on a space voyage. It sounds pretty cool. Two nights, they serve you three meals a day on the Halcyon Cruiser. There's a wookie walking by you in the hall handcuffed, headed to a cell probably. That's where you're doing. You're e-walking around. Brunch is cooked by the phantom menace.

What could go wrong with those eggs? A stormtrooper says, show me your identification. Jack, you show up. You're like, you will. upgrade my room. I'm always impressed with your Obi-Wan impression. Upgrade my room, you will. But here's the thing, Snackers.

After the first night dinner and your family's all settled in, there's going to be a disturbance in the force. That's right. This is the most experiential of experiences. Something's going to go wrong. And your family is going to have to decide, do you help the resistance or do you tell the empire? Or do you just head to the tavern where that cool, like,

alien band is playing and do karaoke. Do do, do, do, do, do, do, do, do, do, do, do, do. play that same song. But Jack and I jumped into the business side of this. And here's what we notice, the travel industry right now, it's trying to get you back to traveling by focusing on three specific things. Wellness, cleanliness, and work. Yeah, we look at all the hotel companies we cover and they're focused on health retreats

and spa deals and like makeover stuff. The airlines are obsessed with sanitation and Purell everywhere. Marriott is obsessed with bleasier, business and leisure. They want you to work and vacation from the hotel. So they give you a standing desk. Disney's not doing any of that. There's no spot. There's no office perks.

There's no obsession with like COVID protocol. Disney is doing the exact opposite of the rest of the travel industry. But you're going to need George Lucas to spot you a couple thousand galleon for this two-day, two-night adventure. Yeah, you are. Let's say you booked this thing for August 20th to 22nd next year. That trip on the Chandrilla Starline in a cabin is going to cost a couple $4,800. or $6,000 if you bring a couple tauts along.

So, Jack, what's the takeaway for our buddies over at Disney? This pays for Disney Plus. Disney Plus pays for this. Snackers, Disney Plus, it gets all of the attention these days. We noticed it was mentioned 41 times in Disney's last earnings call, Disney Plus. Launched November 2019. It's actually expected to lose money until 2024. Best case scenario for Disney.

And honestly, we've seen this before. There is no way a $7 a month streaming service. Disney Plus is going to be profitable anytime soon. Disney Plus is priced to lose money, but it's also priced to make the whole world fall in love with Disney characters. Because here's the funny thing. After you binge nine Star Wars episodes and three Shmovies on like the Mandalorian, your family's going to jump on the wait list for a $6,000 weekend on this Star Cruiser new thing.

The profits Disney makes at theme parks pays for Disney Plus. The fans Disney Plus breeds, they pay for the theme park. Jack, can you whip up the takeaways for us before the weekend? The Gap's Yeezy hoodie sold out, even though they're nearly three times the price. The Yeezy price premium. It adds up to a billion dollars. Dollar Tree is always looking for ways to make more dollars from its low-income customers. Dollar Tree Plus, it's dollars plus a little bit more dollars.

Yeah. Disney Star Wars Hotel opens in March, the most experiential of experiences. And that pays for Disney Plus, but Disney Plus. pays for that. Now, time for our snack fact of the day. This one tweeted in by Darlene Menivar from lovely Avondale, Arizona, who is also, she is proudly Mexican, Salvadorian, and Japanese. Valentina hot sauce. Great sauce. It is a great sauce. It was actually named after a girl who was dressed as a man and joined the Matarista troops in the Mexican Revolution of the early 20th century. So if you're indulging in some hot sauce, which you are probably frequently,

That bottle, it's more than just a bottle. Happy Hispanic Heritage Month. Snackers. Snackers, have a fantastic one. Also, it's the weekend. Celebrate some wins. Jack, we got to celebrate some wins. Oh, for sure.

Celebrate some foliage. What do you think the apple pickings for? You think you eat those gourds? We hand them out as prizes to people to celebrate those wins. Snackers, Nick and I'll see you on Monday. Can't wait. And before we go, happy birthday to Pease Easy from Lagos, Nigeria. And Claire Louie Ting in Taiwan.

And Slam and Sam over in 14. Bill, Indiana. And Polly Goslin in Colorado Springs. And Jesse and Ariel twins celebrating together same birthday over New York City. Nice. Happy birthday to Marvia Torres in Miami, Florida. And Alejandro Santiago down in Miami. And Treventario, turn in 50 in Louisiana. Michael Morgan, turning 33 in Laguna Niguel, California. Happy birthday, Mike Juan in San Francisco. And Dalton Mills over in Richmond. And Andre Wilkinson in Brooklyn, Kings County, New York. Presley Rose, happy birthday in Columbia, Maryland. Happy anniversary, Emily and Owen in Baltimore.

Carlos and Alia just got engaged in Dallas, and they are aggressively wedding planning, from what we understand. Happy five-year anniversary in beautiful Santa Barbara, where they got married to Dustin and Esther Sedgwick. And Alex and Mary Beth have a fantastic wedding this weekend. We're wishing you the best in Maryland. And happy birthday to Matt Zarnacki, the legendary co-founder of Verb Energy Snack bars over in Brooklyn, delicious. Anybody else celebrating, make it a teapoy. Celebrate those wins today. Robin Hood Snacks, newsletters, and podcasts reflect the opinions of only the authors who are associated persons of Robin Hood Financial LLC and do not reflect the views of Robin Hood Markets, Inc,

or any of its subsidiaries or affiliates. They are meant for informational purposes only and are not a recommendation to buy or sell any security, cryptocurrency, or investment strategy in any account. This is not an offer or sale of a security, not a research report, and is not intended to serve on the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robin Hood Markets, Inc., Robin Hood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk, including loss of principle and past performance, does not guarantee future results.

Robin Hood Financial LLC, member FINRA, SIPC. All the Stormtroopers were cloned off the same model. I think that's weird. I like a more as cloned. The idea of a human being under there is freaking me out. I know. I don't like it at all. And I feel like someone should be held response. I mean, there's no way a human could pee in that suit.

It's just completely impractical.