The threat of rogue AI in Wall Street trading: Tradeweb CEO

[00:01] we're losing that human component. >> The [music] relationship component of important. [music] >> The longevity of your brand depends more on the strength of your community. The old playbook is no longer valid. [music]

[00:15] >> This new environment, the agent to agent trading. I used to think about what would happen if like a rogue person came on trade web and did a fat finger. it's an agent. And it's not a fat finger. It's milliseconds of activity.

[00:28] >> Wow. >> Social media have certainly created a halo with 5,000 [music] people in her audience. She sold 11,000 hours. >> How do you unlock staying [music] power

[00:43] in a position like this? >> The question I like to ask my team is, if our brand disappeared tomorrow, would our customer miss us? [music] And where would they shop? I think the biggest recipe for disaster sometimes are

[00:56] monopoly [music] on something when they monopoly [music] on something when they don't. Players and uh jacked up for my next guest. Very excited to uh welcome back

[01:09] Billy Halt, Trade Webb CEO. Good to see you, man. It's been It's been a while. with Trade Web, >> what are you guys up to and what do you >> Big kind of grownup company these days. We're a global global marketplace that

[01:22] kind of lives and breathes in fixed income derivatives and ETFs connecting sort of the institutional market, the biggest uh asset managers, hedge funds in the world, insurance companies with their market makers, the biggest, you

[01:37] Sachs, JP Morgan, Morgan Stanley, City Bank, and then really interesting, a force in the market that is becoming bigger and more wellknown, which are the citadels of the world in the Jane Streets of the world. So, it's an

[01:51] interesting business all about technology and my general instinct is it's a it's a sort of sweet spot for us in the business because as you know really well um you know the hyperscalers continue to sell bonds so

[02:05] hyperscalers continue to sell bonds so debt markets continue to grow um I think there's a moment of deregulation in the marketplace so the banks are back in the business taking on more risk and um the forwards around technology continue um

[02:19] you know the markets continue to move in a more kind of technological transparent place. And I feel like we're kind of like in the middle of it, like busy as a you know, all these years later. >> Um,

[02:33] about hyperscalers. >> Yeah. And I think I knew the I knew the because I had no clue. >> You know, you asked me a question about AI, and that was like a, you know, an interesting question to ask, you know, a

[02:45] you know, the world changes quickly. So, how does say um in the early days of company? >> It's a really good question. I viewed it as a as a kind of financial service company that lived in in the technology

[03:03] >> but I don't know if we've kind of thought about it all the time as like this like it's like a tech company like traditional tech companies. And one of my kind of thoughts is we are a technology company um obviously but we

[03:16] are a technology company that really speaks the language of the markets and what we try to do is we try to think about our clients not just as clients but as real partners of us as we kind of continue to build and innovate

[03:29] marketplaces. >> What do you think about um how quick and fast the markets are becoming? I talked to I think it was on here recently Coinbase um CEO Brian Armstrong and we're talking about um automated trading

[03:43] and AI agents trading for you. I'm like Brian this is wild dude. How is >> Yeah, it's amazing right? Like now we're having conversations really about like you know agent to agent trading is that the end state and I kind of keep

[03:57] look how far we've come >> cuz when trade arrived on the scene it know liars poker but it's like the bond market this is like old school stuff. Yeah, this is agent to agent >> agent to agent is like yeah what are we

[04:12] interesting way you know today believe it or not like 2026 trade web's biggest competition is ironically still the phone so there's still a lot of like old school traditional business that gets

[04:26] done you know in my area of the market that being said like AI and the still like front and center on everyone's mind like how is AI really going to get applied in a sophisticated way. Data is like the key

[04:43] component to things. It allows people to search for and find liquidity in much >> So on the but going back to the phone thing, so this is like Wall Street 1987 people if I what would I call you trade up for? Like what's that what are those

[04:59] calls like? It's like, well, we we have some actual areas, you know, of our of are still people kind of doing brickandmortar business, but I think in my analogy of like the phone, you'd be bypassing poor me and bypassing trade

[05:14] web and doing business directly on the phone, you know, with a bank. And so, there's still types of businesses and types of trades where it's not quite

[05:26] like 1986 Wall Street with Bud Fox, but it's like, you know, it's it's a great movie. It's like phone based business. Um, and that for me is, you know, a lot of the opportunity that we have as a company is to continue to apply

[05:40] >> doesn't that make you sad though? like we're losing that human component, you know, but there was something seeing Bud Fox call up, you know, his client >> like the the, you know, the relationship

[05:53] >> like the the, you know, the relationship component of business is still like very about what we've tried to do at Trade Webb, it's it's been to kind of honor the concept of relationships in the market. I think trust and how you build

[06:07] out marketplaces through technology, the trust component of it is still really trust component of it is still really important. I have I hope I think like kind of all through >> you're a cool guy

[06:21] the ecosystem of of my world and those relationships can be a difference maker but it I still do have like a little bit of nostalgia believe it or not for like the way the old the world you know used to work. Um,

[06:35] >> so this new this new environment, this agentto agent trading, how how do you prepare a platform like yours for the next decade of this only accelerating? >> I mean the you know interesting question like the the first thing and maybe

[06:48] probably the most important thing is like the the amount of energy you have to put now into cyber and risk management is huge. So we have an amazing kind of risk team inside the company and the way that we think about

[07:00] company and the way that we think about the cyber security world is obviously thing you're always trying to do is like evolve around um what are the rules of the road that allow clients to find liquidity in the right way and in a way

[07:16] that works for the marketplace. Um, the first kind of phase of this whole thing was, you know, how do you get a client to go from like, you know, the the 1980s, the Bud Fox, the phone thing to the kind of mouse or the keyboard? And

[07:30] that was a pretty big kind of switch. And I think in the new phase of things like the keyboard and the mouse, it doesn't like have to go away. But I think larger and larger percentages of business will ultimately be done through

[07:45] algorithms and a little bit more through the kind of machine learning um AI oriented uh you know ways of doing business which is which is interesting. like what keeps you up at night because I always think it's an absurd question

[07:59] night. I know, shopping for food the next day, like I need to like get my stuff done. But >> does the risk of a cyber attack in this new AI era keep you up at night? How like how worried are you that this can

[08:12] >> Yeah, it worries me. I mean, because Yeah, you always have to think about like what's that what's that big risk out there, you know? And so, you know, I'm not necessarily in the business of worrying. I like to think I'm in the

[08:25] business actually of like optimism. And I think part of the part of the um internal optimist. That being said, you have to have a good risk orientation. So it worries me. Um I used to think about what would happen if like a rogue person

[08:39] >> like a fat finger >> did a fat finger trade. And now it's person, it's an agent. And it's not a fat finger. It's you know milliseconds of activities, right? And so all of the the ways that you have to man that fort

[08:54] need to become more and more sophisticated. We're good at that. Um I think it's one of the things that we bring to the marketplace that's that one of the things that worries >> is Wall Street more broadly how

[09:07] investing in this. You know, you talk to all so many of these players in this security? >> We mean it's it's it's like you know, I think it keeps everyone up at night. you know, it's it's it's a thing that we you

[09:20] can't invest enough in it. You can't have anything other than, you know, the best of the best of the best. And there was probably a moment in time and I was the perfect expert at all this, but there was probably a moment in time

[09:35] where, you know, versions of, you know, chief risk officers or risk areas were not necessarily like first and foremost like the, you know, the people that you thought about the most. like those days are like way over and all across Wall

[09:50] brightest. >> Sure. Being a tech company how how has thinking about it? >> You know I I I made a comment before which was kind of interesting. I sometimes kind of like not to say like

[10:05] completely cuff those but I'll I'll try to bring my own personality >> which of course the comm team loves. They love that. Don't say that. Um, I things AI does, it makes smart people smarter. It makes efficient people kind

[10:19] of more efficient. And I believe that from my perspective, like my company's not in like the the AI evolution to necessarily have less people. Um, you know, we're not like some enormous kind of

[10:35] monolithic company that by definition needs to have less people. We look for efficiencies. I have a I have a general feeling and I'm curious what you think that like by definition AI is not necessarily going to replace people but

[10:50] necessarily going to replace people but the people who understand and who use AI the best will ultimately be the winners. Well, I do see it hollowing out various departments of companies, but to your

[11:03] point, these are very large companies. And departments, HR departments. Uh, I'm not saying that they're not going to have they had 10 years ago. >> And, you know, these things kind of move

[11:17] a little bit sometimes in waves. And as you know really well from like the, you know, the big big tech companies that they were going to be, you know, laying off workers. Some of that was a consequence of like, you

[11:30] like never let a um >> like a slow down. >> You know, never let a crisis get in the you know, get in the way of a good moment kind of, right? And so it became a good way to kind of say like let's

[11:43] let's play things a little bit closer to home. Maybe there was some kind of overhiring in the past, but we've been a company that has been able to for a long time. I think, you know, we have good scale now, over two billion in revenue

[11:57] last year. Um, we've had basically mid-teeen growth for the last four or five years, and we have, you know, plus 50% margins as a company. So, we've been know, how do you continue to grow business, invest, but also have, you

[12:13] know, real profitability. >> You know, I you have >> I mean, I I it's not the right word, but I I view it as plumbing. I know it's not to >> to markets. Like, what what what is your

[12:26] data telling you about the impact of the hyperscalers as they come out with more debt? Like, how does your company like yours make more money? And then what's the risk of all these companies that really never focused on issuing new debt

[12:39] in new debt? >> I mean, it's it's um it's a combination. >> I mean, it's it's um it's a combination. Think about it as a combination of kind of like private and public. There's there's more debt to trade. Whether or

[12:52] not that's government bond debt or corporate bond debt as a consequence of all of this need to, you know, to raise money, you know, the markets are money, you know, the markets are continuing to kind of grow. And one of

[13:05] really important is, as you know very well, like the Fed and interest rate important. And one of the big things that's been happening over the past bunch of years is that the central banks are playing a less active role as buyers

[13:20] in the market. That's creating a reality where there's like the right level of um you know risk in the system and volumes have done you know exceptionally well in

[13:33] the markets that we live in and the profitability of our clients as a consequence has been really high. So the legacy banks, the Morgan Stanley's, the Goldman Sachs, the JP Morgans of the world doing like really really well and

[13:48] then the, you know, the smartest guys on the blocks, the, you know, the Citadels and the Jane Streets who tend to lead with, you know, quantitative first and with, you know, quantitative first and foremost are, you know, crushing it and

[14:01] people, you know, are doing well. The past few times we have spoken there's Jerome Pal as now former Fed chair. We have a new Fed >> and Kevin Walsh and to your point I mean I hear those points like how do you

[14:16] >> how could how do you think Kevin Walsh will shape the Fed and what do you think that you are involved in? >> Right. My you know my we we talked about this a bunch before. My instinct is, you know, the administration

[14:30] know, the administration has wanted rates lower for a while. But that being said, as you know very well, there can be moments in time where, you know, the bond traders have their own view.

[14:43] >> Right. And that's the bond vigilant. >> That's the vigilante. You actually rates really confident in this cut. >> Um or we're not sure the cut's coming from a great place. And so we'll see how that kind of all plays out. my my

[14:56] instinct is, you know, he's obviously um you know, bringing a lot of reasonableness to the equation and I think he looks at things in a complex >> how how disruptive could it be if he's not out there giving forward guidance?

[15:10] If more Fed members follow his lead and don't doesn't do interviews or the Fed's >> it's going to be it's going to be it's going to be a different personality, a >> And my instinct is I'm not really sure. We're going to have to kind of wait and

[15:23] We're going to have to kind of wait and see. I would say given you know the the you know I think we've said like oh the market's gone through an unprecedented moment like a bunch >> right everything's unprecedented right

[15:36] like we've gone through obviously like in a very short period of time like >> you know the pandemic the you know to some extent the the regional banking crisis which you and I have talked about and then you know the tariffs on tariffs

[15:50] ago. remember that was that yesterday or 10 years ago >> and that's you know the the function of the market in a lot of ways on the fixed income side is really kind of held in

[16:06] which tells you that like given all of that the the participation um and the way that the function of the market um continues to do well I think says a lot. I mean it should give I think people um a fair amount of

[16:19] confidence that the um you know the participants know how to handle you know moments in time. >> What else is trade web not involved in next couple years? >> It's an interesting question like how do

[16:35] you keep your eye on like your day job of kind of leadership in these kind of of kind of leadership in these kind of like traditional markets and then find new opportunities out there? I would say like you know very bluntly you know me

[16:47] like as a public company sometimes that can be harder because you have shareholders you have quarterly earnings you have you know margin margins all that what you're trying to say >> sometimes once in a while I try to hide

[17:01] >> sometimes once in a while I try to hide during earnings calls but the truth is like there's a lot of opportunity in what we kind of think about as like frontier markets so whether or not that's like the tokenization of kind

[17:14] real real world assets like the concept that there will be equity and fixed income um securities that wind up important concept. And then the other thing I would say is that like from an

[17:30] institutional perspective, you and I have had like great conversations about like where are we going with crypto? Um, but the truth of the matter is I think there's a lot of reasons to think that there will be ultimately an evolution of

[17:44] there will be ultimately an evolution of crypto from a retail product into a real institutional product. And and we want to play a big role in all of that stuff. So, it's not just the traditional markets, it's also obviously like the

[17:58] frontier markets and where's the disruption around these frontier markets really going. Are you are you happy with Trade Web being in the background? Like about what you're doing. >> I I um I do too. It's not that I get

[18:13] like frustrated um being in the being in the background, but I sometimes think we have this pretty cool story to tell and you know you you allowing me to come on >> like I've been early. I'm pat I'm patting myself on the back.

[18:26] >> This is not our first chat. I like and how much how much in sales will much business >> so so think so so I think about scale so we're we you know we were over you know over two billion in revenue last year um

[18:41] >> that's huge >> you know we've grown kind of 13 to 17% over the last you know four years >> just by being in the background. humble and being being in the background. And then we've, you know,

[18:55] we've shown that we have like a real orientation to profitability because we've expanded our margins as we've done it. Those three boxes of scale, profitability, um, and growth are not always easy boxes

[19:07] for companies to check and we can check them. Um, sometimes it's like what's the totem pole. >> Yeah. >> Of it all. We have like big high-profile clients like you know it's it's it's

[19:21] >> and they don't want to be in the news anymore. They're okay with being know >> So once in a while it's okay to kind of recede >> into the background. Um but as a public company you have to make sure

[19:36] right way and you tell the story the right way which which hopefully we we get to do. I'm really fascinated by leaders who have been at companies for a When did you start train? >> Yeah. No, no, I so I've been at the

[19:49] >> 2000. >> You and I had an amazing conversation. Obviously, as you know, we were 911 company. We talked, you know, in a very company. We talked, you know, in a very heartfelt way about 9/11. Um, I I've

[20:01] been president of the company since since 2008. I became CEO four years ago. >> What what how what steps do you do you take? day to day or did you take day to day to go from president to CEO? Like what every

[20:16] day did you wake up thinking, okay, I need to get here. I need to do this. I was that like for you? >> It's a really good question. It's a it's a it's an extremely interesting um I don't know if it's a lesson, but

[20:29] it's an extremely interesting thing to be a very um ambitious person because only ambitious people become, you know, number twos in companies. So, by definition, you're ambitious, but you're not, you know, the person in charge. Um,

[20:43] and sometimes you have to park your ego, which is kind of interesting. Um, I was really lucky because I had a great partnership with, you know, the longtime CEO of my company and we were kind of a uh, you know, a twoman duo for a while.

[20:57] don't know, Batman and Robin sounds like weird. I know you that was Robin like you know um and at the end of the day you know in a great way like um he was ready to retire and I was ready to become CEO and so that moment kind of

[21:13] become CEO and so that moment kind of happens I think um and you're lucky because it's not always that way as you know there those those uh those moves you know up the ladder >> can come with some kind of elbows you

[21:26] really really lucky cuz I didn't want that um back to the concept of relationships like life's pretty short >> and it's nice to be able to kind of achieve something you want I think the right way and I was fortunate to have

[21:39] that for sure. >> How do you unlock staying power in in a position like this? Um, never rest on your laurels to start with. Like never, right? And so there can be never kind of a moment of relaxation like we got this,

[21:54] we're good. You know, none of our businesses are on autopilot. We have uh businesses are on autopilot. We have uh zero monopolies in kind of anything we do. And I think the biggest um recipe for disaster sometimes are companies

[22:08] that think they have a monopoly in something when they don't. Mhm. >> And so, you know, we're we're we're really really strong on that. Um, and really like spend time with clients, like hear from clients like directly.

[22:23] >> Um, and the more you do those kind of things, I think the the feeling is you can stay on the, [snorts] you know, on the front foot on change. >> I thank you for doing this. These are our first 10 in palatial Yahoo Finance

[22:37] So, it's it's it's wonderful to be down. >> I'm I'm a lucky guy. Good to see you, my that's it for the latest episode of Power Players.

[22:50] because it goes back into my uh really long time interest and former analyst self in retail. I want to welcome on Paxon CEO Brienne Olsen. Uh Brienne, good to see you. Like I I'm I joke with you off camera. I'm dating myself. Paxon

[23:05] was the first company, one of the first companies I covered as a as a retailer. public. It was Abberrombie and American Eagle. It was just like this golden era of softline or especially retailers. Everybody was opening stores and you

[23:18] would just find these amazing things in the mall. Um but I am definitely definitely dating myself. So what have you been working on at Paxon now? I owned. >> We're privately owned. I've been with

[23:31] the company almost two decades and we've been through a real transformation. And so I just came out with a book called co-created that outlines the transformation over the last 15 years specifically and really goes step by

[23:45] step in the road map of how we did it and what the transformation process was like. >> If I walk into a Paxon store today, how is it different versus 15 years ago? >> First of all, you're going to walk into

[23:59] a store where it's not just a retailer, it's a brand. So 50% of what we sell at it's a brand. So 50% of what we sell at Pacon today carries the namesake brand Pacen. So your favorite pair of jeans, Paxon branded. Your favorite super soft

[24:13] hoodie, Pax Unbranded. And you'll also find collaborations and co-created product from different brands and collaborators in music, sport, fashion, and art. So you might find something

[24:26] from Formula 1 or the Metropolitan Museum of Art. You might find your new p favorite pair of jeans from Selena Gomez with the rare denim edit that gives back to youth mental health. Or you might find a piece from Fear of God, Jerry

[24:41] Lorenzo's brand or Brandy Melville, John Galt. So I would say it's a nice compilation of brands under the Pacson brand and label. How did you know when brand and label. How did you know when that you had to make that pivot to lead

[24:55] with the Pacson brand and and was there a piece of data that said, you know what, um, I'm not going to stuff my store with more Adidas. I I need to get into Paxon. >> I think there was never a doubt in my

[25:07] mind from the day I joined. I came from Abberrombi and brands like Valentino and John Franco Fereet where there's just a tremendous amount of pride in what it means to be a brand and yet Pacon had

[25:22] this very unique history and kind of rich architecture of what it meant to be a house of brands and so I think blending the two was the real magic in terms of giving ourselves a very unique

[25:35] place in the marketplace but starting from the positioning of what is the Paxon brand? What does it mean? What do we stand for? And then how do we choose our partners in terms of collaborators, branded partners, co-creation?

[25:52] >> What did did you have to stand up basically a new muscle and a new supply chain in the company given that you are now putting your own label on these products? Like how difficult was to to build that muscle inside of this

[26:06] company? So the muscle was already there. We had been building great private label branded product but not under the Paxon brand. So there was a brand called Nollie. There was a brand called Vert.

[26:20] probably smiling because you remember. >> I I do. I remember writing about all this stuff. This is wild. This is >> And we had a pretty substantial denim business called Bullhead. And in the end, when we were doing consumer

[26:34] research, the most basic focus group would tell you, you go into a guy or girl's closet and you look in their closet or on their floor and what are their favorite pair of jeans, bullhead. Where did they get those bullhead jeans?

[26:48] They really can't remember because it wasn't memorable, right? So now you look at Tik Tok, we've sold a million pairs of jeans on Tik Tok alone. You go into a girl's closet today and it's full of Pacson branded product. It is a constant

[27:03] reminder in his or her life of what it means to shop at Pacon and what does that brand mean to you? Is it still I went to the website and hat tip to you because I think what you have in the stores. I I go to the stores. Um I I'm

[27:18] on your line. I'm on the website. It looks great. It really does. Does it seem to really be capturing this moment in how that next generation is shopping? Like is it still California inspired? >> I would say more specifically it's Los

[27:35] Angeles lifestyle inspired. So you think about what Los Angeles is really known for in a cultural hub and you think about the FIFA World Cup or you think about the home of sports and entertainment, fashion and art and it's

[27:50] kind of inspired loosely by that but also with the ability to scale globally. Just at the end of May we opened our first store in Dubai and thousands of young people lined up and it's been outperforming all of our expectations.

[28:05] So I think what's really exciting for us at the brand is to watch Pacon also now at the brand is to watch Pacon also now go global and to see the resonance that's happening not just in the US but also on a global on a global stage.

[28:20] >> How many stores are open now? >> We have about 310 stores in the US and we're working on our first three in the Middle East by the end of this year with an expansion plan for 20 additional in the next few years. Wow, it's good to

[28:35] again. That is some cool stuff. Like, how did you identify the Middle East as a growth area for the company, >> you know, it has the highest index of >> you know, it has the highest index of young people of Gen Z in the world and

[28:49] so that at a starting point plus a culture that has a real love of shopping and a real interest in the Los Angeles lifestyle and everything that we stand

[29:01] for. So, music, fashion, art, sport really resonating. Our UFC product is some of our best performing out of that Dubai store in our first um few weeks. >> I I point to really I think three brands as I'm just like going through my local

[29:16] mall uh in my head that are that have been around for a while but are seeing turnarounds and I would say successful turnarounds. I'm going to point to Pson. I'm going to point to GAP. Like what do you why do you think these brands have

[29:29] you why do you think these brands have been able to live on? Is it one part nostalgia and then you know leaders such as yourself identifying that but also raising the game for what the company's doing?

[29:41] >> I think nostalgia plays a very small role. If you look at the research, there role. If you look at the research, there certainly is for Gen Z in particular a look back at nostalgia, but at the same time the amount of brands that are

[29:54] exceeding expectations and able to connect on nostalgia alone, you can't do it. I think the common thread for GAP, Abbercrombi and Pacen today is really putting a community first lens on it and being very thoughtful about how we're

[30:10] connecting GAP in particular with music. They're doing a great job in connecting with music and culture. They had a fantastic activation at Coachella. I think the work that Fran has done at Abberrombi, she has been very thoughtful

[30:25] about really listening to consumers and getting that feedback circle and at getting that feedback circle and at Paxon the real power of co-creation and no longer building product for a consumer but actually bringing the

[30:37] consumer but actually bringing the consumer into how we create our things that we've done to give the customer a real seat at the table. council which are 14 young people between the age of 12 and 26 who are not

[30:51] a focus group. They actually come in and advise the leadership team on how to navigate the vision in the future for the company go forward and they are really helping with things such as technology new app launches um marketing

[31:07] launches. They're not here just to advise on product which is a pronounced shift from how things used to work in the past. We're also doing our own research with global data with our youth report and we're interviewing 6,000

[31:20] young people each year to get at the why. I think there's a lot of research that gets at where the rankings are, what's trending, but it's not really getting at why is the consumer shifting in this way? What are the emotive things

[31:36] happening in a young person's life that are creating these shifts in shopping patterns or behaviors? And so that's the research that we're really focused on and building an ecosystem and a platform with our Paxon community hub that also

[31:52] is leaning into creativity and I think in the age of AI really creating some protection and insulating that um true consumer participation is very very important so that we can protect the

[32:07] creative process. I really believe more retailers, especially uh specialty retailers, need one of these youth advisory boards that you have. Uh I think is an amazing idea. What have you heard recently from, let's say, 12 to 18

[32:20] year olds that come in there and talk to you and the leadership team? Like what they need right now from a company like yours? >> So, it's really interesting. Purpose does matter. They're looking for brands

[32:35] that they can connect with beyond the product. And so they care about leading the meeting the management team. They want to understand more of the why. They don't want to be a part of the process at the back end. They want to be a part

[32:48] of the process at the front end of like, hey, here's people we could collaborate with and they want to be participating from the get-go on what that looks like, what that feels like, how is the outreach. We also recently had our youth

[33:01] advisory board do mall walks and they all came and jumped onto Zoom afterwards and shared their feedback about what are they liking in certain store how much engagement do they want, things that are really hard to get from a

[33:15] survey, right? It requires a whole different level of participation. And they helped navigate our new app launch. And they were in the alpha and beta phases for months and months giving feedback about how it actually needed to

[33:29] operate differently so that it was more like the apps that they were using and behaviorally was going to emulate kind of the way that young people want to engage with a brand and want to consume. How fast are you able to move in

[33:45] shopper wants? You I recently had a conversation with uh Elco Terang and uh they are doing a lot of interesting things on Tik Tok and the fast some of

[33:57] market takes them six months like what is it what does that lead time look like for you? So in some cases, we've been able to re-engineer our supply chain to get product in four

[34:10] our supply chain to get product in four to six weeks. So similarly to ELF, we're seeing a lot of strength in live shopping, Tik Tok, and getting that immediate um I would say social response. And then if you have fabric

[34:24] positioned, if you have a nimble supply chain, we've been able to accelerate and leverage air to ensure that we're getting product into the hands of consumers 6 weeks later. And so I would say that's a real strength um of Pacun

[34:39] and being able to respond because part of opening up this process of co-creation and also being very active and listening to the community is reserving enough open to buy and really building an infrastructure where we're

[34:53] producing quality product but at a fraction of the time that traditional retailers would be looking at. Does the you shopper that comes into the store, do they want to be engaged or they do they want to be left alone?

[35:06] >> They actually do want to be engaged. And I think that that is a pronounced shift. I think that there was a return to a desire for experiential participatory desire for experiential participatory retail. And I think that that has been a

[35:21] shift that we've been noticing as we've seen our store traffic climb into the double-digit positives is not only do they want to participate in events and see the brand show up in unique ways like truckside at Formula 1 in Austin,

[35:35] surprise and delight moment, but in our stores, they're looking for understanding what's the latest new brand drop. Coming in with their friends and having it be a social third place. And so I think putting a lot of emphasis

[35:50] on what does the engagement with the consumer look like when they come and stores is really important. >> You're you're you're seeing doubledigit >> Wow. >> Which has led us to open 20 stores in

[36:05] >> Which has led us to open 20 stores in the last 18 months. And I think you know social media and social commerce have certainly created a halo. We had a particular gene, the Casey gene and the asteroid wash, where on the open creator

[36:20] platform, we had a single customer qualify with 5,000 people in her audience. She bought a pair of our low-rise Casey Astra jeans in our local Nashville store. She went home, made a Tik Tok video, put it on the open

[36:35] platform. She sold 11,000 pairs of jeans. Remember, she has 5,000 people in her audience within the first 36 hours. So [snorts] you see this type of, you know, verality and I think it speaks to

[36:49] the overall focus of also as a company being willing to relinquish some control to your community and really allowing to engage with them in meaningful ways because this generation both Gen Z and Gen Alpha consider themselves the

[37:04] greatest storytellers and so they want to be a part of a brand. They don't want to have a brand pitching to them. So I think that shift has created you know a lot of changes internally for us and also externally of how do we really

[37:18] incorporate this into our operating system. Co-creation is not a tagline. It's not a marketing tactic. It really is how we are operating differently. >> It sounds like a more resilient business is being created. Like, you know,

[37:34] right now and and when I was an analyst, we'd always think about a back to school starts in mid to late July or back to college and how that goes will determine think that applies anymore. Just listening to you, like you have the

[37:49] ability to tap into major trends happening in real time on social media. It's almost like the the complete retail playbook is being rewritten. >> Absolutely. And that was really the impetus for why I chose to write the

[38:02] book co-created now because we're at this very interesting point of inflection where the old playbook for retail is no longer valid and the longevity of your brand depends more on the strength of your community than your

[38:17] the strength of your community than your ability to chase any individual trend. For those leaders that that are watching this uh and they are interested in in your book and what you have done at Paxon, what's the one step they can take

[38:31] company if it's not operating at the level they would like to see? >> I would say two things really. The first is the power of co-creation, which means

[38:44] no longer treating your customer like an audience, but treating them as a partner to build with. And that fundamental shift will shift internally all of your processes. And it will also shift your marketing and how you go to market with

[38:59] your product. The second I would say is insatiable curiosity of really continuing to dig as the customer continues to evolve. As there's so much advancements with technology and AI, I think curiosity around your consumer

[39:16] really having and building relationships with them is more important than any Do >> does Pacific Summerware or Paxon there I go Pacific somewhere Paxson does it want to be a public company again? Do you

[39:29] hell of a story here. >> Yeah, we're certainly exploring that option. >> Mhm. Very interesting. Um I imagine you've had some really interesting mentors over the course of

[39:42] your retail career. Who is who have you learned from and what did you learn from them? >> Yeah, Doug Roush is one of my favorite >> Yeah, Doug Roush is one of my favorite mentors of all time. He was an early on

[39:57] employee at Trader Joe's as they were just setting things up. And he is also a board member of Conscious Capitalism Group. And I have learned more in my Group. And I have learned more in my interactions with Doug than in probably

[40:11] interactions with Doug than in probably any conference boardroom. It's so simplistic how he thinks about the relationship with the employee, the consumer, the brand ambassador, and what a purpose-driven brand really needs to

[40:24] be about. But it's been a real unlock in terms of a very refreshing source of inspiration in a world that's inundated by AI and technology of really taking it

[40:36] back to its core. What do you stand for? Who should you be hiring? And how do you build a community that actually cares? And so I would say Doug is at the very And so I would say Doug is at the very top of the list. I also had a mentor Jim

[40:50] Guly who was our interim CEO at Pacson for a number of years. He had never been for a number of years. He had never been a CEO before. He had been the longest um CFO in the public traded market for Janesco and he came in with a real

[41:06] hyperfocus on transparency around financials for the internal organization which I think fundamentally looked at changed the way we looked at the numbers

[41:18] changed the way we looked at the numbers and I think that that also was a pivotal and I think that that also was a pivotal mentor in terms of how I think about the transparency um in a function that in many

[41:32] organizations is kind of untouchable and so our finance organization I would say is incredibly helpful resourceful they're a team that people want to go to and that's a big shift from what we had five six years ago

[41:46] >> you know you you worked you've been at Pakistan through some challenging times too in those challenging moments what did you learn about yourself as a leader

[42:00] I had been kind of taught my whole life, which is there was a lot of resilience, which is there was a lot of resilience, but there was also a very strong sense but there was also a very strong sense of belief. And I think that comes across

[42:14] in terms of kind of my value system and my ecosystem is creating a very strong vision for the future and creating context and a reason to belong is super important in particular in challenging times. And so the question I like to ask

[42:29] my team at the beginning of most meetings is if our brand disappeared meetings is if our brand disappeared tomorrow would our customer miss us and where would they shop? And if you struggle in answering those questions,

[42:41] then you kind of have to go back to the drawing board. And so I think you know with the advent of brands and you know uh retailers such as Amazon, we had to really kind of rescrupt like what do we stand for? They're offering so much

[42:55] convenience and you know how are we going to compete? And I think as you continue to challenge yourself as a leader and you ask those tough together, but it also makes you it forces you to get real clear on why do

[43:11] you deserve to have a place in the consumer's life and why do you really need to matter? And that's when we really made a pronounced shift to hey at Paxon our purpose is to inspire the next generation of youth and create community

[43:26] at the intersection of sport, music, fashion and art. That is a very different place than what we were 10, 15, 20 years ago when our mission or our purpose was to be a retailer that curated the best brands out there. And

[43:41] so I know that our purpose today sounds lofty, but it gives people a real reason to be motivated, to stay engaged and to make a difference in the world. And that's a lot of the philanthropic work that we do and the work that makes us

[43:56] also proud to be a part of the Pac team. And I think that it also really resonates with the consumer as they dig deeper into trying to understand what a brand is about, which Gen Z and John Alpha really care about. they're going

[44:09] to find the backbone of a brand and a leadership team that really care. leadership team that really care. >> How how do you get the team to buy in the vision or buy into the vision that you are

[44:22] you are conveying when when times are tough? >> You know, I think the first thing that we did is the leadership team and myself built this vision together. So it wasn't a singular person or a singular team or

[44:38] function that came back and said, "Hey, this is what we're going to be about." We first shared a lot of customer intercepts. We did a lot of work. We showed the organization how does the brand make the customer feel. And in

[44:52] were sharing that they feel the most seen when they shop in a Paxon store, that it's their safe place for how they can individually express themsel from a can individually express themsel from a fashion perspective. And so as we shared

[45:06] that, we realized that we carried a much larger emotional weight with the consumer than we might have previously seen. Then I'm a big believer in curiosity. We brought in executive coaches and leadership coaches to work

[45:20] with the teams to really do the work to understand why the work matters. There's a book by Bill George called the true north and it comes with a workbook and most people in the organization have done this work and it really forces you

[45:36] how does it tie into your purpose at work and what is really motivating you to move forward with this vision. And I would say, you know, in a few cases, we had people do the purpose work and they

[45:50] else. I'm not doing what I meant to do. And that's a good outcome also. So, I think getting really clear on our purpose, ensuring that the whole team is brought along, continuing to develop and

[46:03] invest in the teams is equally as important as the investments we're making in our stores, in rolling out global and opening new stores. So, I would say it's an overall balance. And I think in more challenging times, you go

[46:16] back to your purpose and it's a reminder of why you exist. You go back to those and you make sure you're being true to collaborating with, who are your co-creators, what are you building for

[46:28] them? And in the end, the question is also in particular as it relates to AI when you're making these advancements, what's the final impact to the customer? Does it matter to them? Does it make it better for them or worse? And then you

[46:44] can go back to it's just as important to decide what you're not going to do as what you are going to do. So I think those are also questions that we're not leadership team. >> Well, good to see the work you're doing

[46:57] there. Good to see this turn. Looking forward to uh staying in touch and following uh this journey for Paxon. Paxon Paxon uh Paxon CEO Brienne also >> Thank you so much. >> Of course. All right, that's it for the

[47:11] >> Of course. All right, that's it for the latest episode of Power Players.