127. Randa Apparel and Accessories' EVP and CMO, David Katz: “Signal is the thing that challenges what you believe.”

Yes.

And you have a few things that I think is very fascinating.

So we usually talk about climate change a lot.

I think this is a topic that we keep embracing in every conversation, but it never from a consumer behavior perspective.

I think I always think about sustainability, how to recycle and things like that.

How do you see the climate change affecting consumers?

That's a great question.

And it brings up this signal and noise kind of critical thinking question.

You know, I break down signal noise into kind of three tranches.

The things that everyone sees and knows about it, like climate change, the things that they might be missing that are really there, but you're not looking deep enough and how they could affect you personally.

as a consumer or as a business person or your business model.

So I look at climate change through all three of those lenses.

To your point, people see sustainability and ESG factors.

We look a little bit deeper and we go, okay, how will changes in climate affect port closures if there's a flood or a mudslide or if there are wildfires could that affect the ports that we export from or import into and we do have this we own the largest belt factory in the world is located in guatemala okay and they are surrounded by seven very large volcanoes and they have other types of climate issues that they have we have another belt factory in chennai india which we are fortunate to be high enough up in elevation that we don't get flooded, but the roads around us and from the port to our materials can be flooded.

So we look at ports, we look at those, but that's only one factor.

Most people when they think about climate change see, particularly if you're bi-coastal here in New York or California, you're thinking about floods and hurricanes.

But the biggest effect actually in the United States are tornadoes through the Midwest.

That's where the most dollars of damage and disrupted households exist.

And in those regions, you can no longer get homeowners insurance.

If you can't insure your home, the things you buy, the places that you shop, and the way you invest in things that are in your household are very different than they are in the rest of the country.

So how does that have an effect? What does it do to where your data centers are located? How does this have to affect? Obviously, we're in the umbrella business.

How do we plan for where to place inventory on umbrellas or on sun hats or on winter gloves from Isotoner? Where do you place those? How does your inventory move? How far ahead do you have to plan it? So when we look at things like climate change, we look at uninsured households and where you're going to need an umbrella and when.

Because we can sell a totes umbrella for $29 or higher.

when it's raining, but it's hard to sell it for $9 when it's perfectly dry.

So how do you forecast and plan around that? How do you work the inventory flows around? So these are the things we think about when we look at climate and climate change and shifts and locations of our distribution centers and how our associates get to work.