Here’s what Former Gap CEO told Kanye West about his collaboration with Gap

Alex Mill CEO and retail legend Mickey Drexler joins Yahoo Finance Live to discuss post-pandemic retail trends, how e-commerce giants like Target and Walmart are taking over the world, and Kanye West's collaboration with Gap.

Video transcript

- Mickey Drexler is credited with turning around some of the most well known retailers in the game as CEO. You've probably heard of them. GAP and J.Crew. Now Drexler is back at the helm leading specialty apparel retailer Alex Mill. The brand was co-founded by Mickey's son Alex Drexler in 2012. Joining us now for a look into the current state of retail is in fact Mickey Drexler. Mickey, good to speak with you here. So you're back at the top of the helm. You're back in the retail game leading Alex Mill. Tell us a little bit about the brand and how it's been doing during the pandemic.

MICKEY DREXLER: Well, we're doing actually quite well. We're a brand that's been around, run by my son, for six years or so as you mentioned. Pandemic kind of hurt all of us to a degree. We're fortunate that we only have one store. So with one store and online as a business, the business has been quite good. And I'm very happy with where we are and mostly with where we're going. The pandemic-- we're going to open up our second store here on Madison Avenue. We have a really cool store in Soho on Broadway and Mercer Street, two entrances. So we're doing OK.

- What is it like working with your son so closely during the pandemic to try to build this brand?

MICKEY DREXLER: Well, not easy. Pandemic or not. But we've finally reached a father, son agreement. And I was probably treating Alex more like, I want to say, employee or associate. He's my son. And I did learn that son comes first, and then employee. I don't like the word employee. Associate and partner comes second. So it's not been easy, but now it's been so much better. And then we have a third, Somsak, who is our third co-founder. Who worked with me for over 15 years in my old companies. So, but it's OK. We're getting along well. And we're moving forward.

- And, Mickey, I'm curious how you're seeing apparel trends right now. We've talked a lot on this program about big public companies, big public retailers have seen a surge in their sales as people have started to reemerge back into the world. What are people wearing now? What do you think people will be wearing on the other side of this? Will it be dramatically different from what was prevailing pre pandemic?

MICKEY DREXLER: Well, you know, the pandemic for all of us. We were up against like a snowstorm every day for an entire year. The real world will begin again in February of 2022 when we're up against normal figures. Everyone's comparing themselves to '19, everyone's quite happy right now. I'm not one of the big people I used to be in terms of business. So it's hard to know. But I think, clearly, there'll be less sweats. In fact, unfortunately, we we ordered our last order of sweats without figuring out that they would drop dramatically. And they have. So if anyone needs a sweatshirt, we have plenty of them. But I think people are going to get back to being normal in their dressing. I think, clearly, they won't be as much dress up, but kakhis, jeans, back to the more uniform kind of dressing. And not wear anything because you're at home. Although a lot of people are still home with the Zoom.

So I think dressing up. We're looking at more suitings for men and women. But very casual suitings. And for us, mostly, we look at good taste and good style, which is really important of course. But I don't think-- I'm not sure, but I think online will continue. Companies are going to have less stores, because they don't need as many stores. And there'll always be a business. But I think the best are going to win always. The ones who are good at what they do. Style wise, value wise, and nothing in that changes long term, in my opinion.

- What role do stores play in the post pandemic retail sector?

MICKEY DREXLER: Well I think everyone, all of us, went too store crazy, worldwide. I think there's nothing like going into a store to get a sense of the business and the brand. So where companies opened up, I'll make up a figure, 250 stores, they probably need 100, maybe 125 stores today. That's a guess. No one will know until time passes in that regard. I do think, and I always-- I think if a shopping center or mall or a street is compelling to visit, I think those are the winners in the business. One eight plus shopping centers I still think will do well. I wouldn't want to be in the C or D shopping mall business today.

And you just don't need as many stores as they used to have. You never did, by the way. Because the amount of markdowns that are taken and the discounting that goes on is beyond wild. Always.

- And, thinking about the e-commerce piece of it, Mickey, I'm curious what you make of a lot of the Walmarts, the Targets. They're all trying to open up to third parties as well. Everyone wants to be an Amazon of sorts. And I'm wondering if it makes the opportunity more compelling or more straightforward for an independent retailer to own and operate their own site. Because that behavior is now ingrained in consumers. That you go online first and really look for something.

MICKEY DREXLER: Well I think they'll always-- well, it depends on what kind of brand or retailer you're talking about. We, right now, wouldn't join any of them. Yeah, it would be great for one week or two weeks maybe of wow, look at the amount of people. But at the end of the day, Walmart and Target, great businesses by the way, they're value businesses. So for us it doesn't work. But I think for most other value players. Look, there's value, and then there's, I think, overpriced. And then there are businesses like ours that are very fair priced and don't take double markups. So I think it's smart to do it. I, you know, I'm an Amazon family. But I get Walmart delivered to my home also. I'm not sure what's in the Walmart packages. I think a lot of it is from Amazon packages. But we won't be there as a high taste fashion company, for sure.

- No offense to Walmart, Mickey. I hope it's not Walmart apparel. That stuff is just not cutting it. They have not cracked the code on that and they probably never will.

MICKEY DREXLER: Well, I think you're right. And I spent a day there a year, or two years ago. And Target's pretty cool now. And Walmart hasn't cracked it yet. You're absolutely right. And by the way, if they ever do, they'll be dangerous. But they don't. And that's why we started-- when I started Old Navy many years ago, I can't believe it's 25 years ago. I was inspired by Target and Walmart and Old Navy's been a success. Hugely successful. For those people, every business is tiny. But I don't like that big anyway. Old Navy was an amazing and is an amazing business. Good value, fun, and style.

- So Mickey, bear with me on this. So I've been following the Kanye West product drops pretty closely here. Not much has been released yet. Pretty cool round jackets, two different colors. But then I go into a GAP store, and I still feel that disconnect. There is the Kanye stuff and the non cool stuff in the GAP store. How does that-- do you think that eventually changes for GAP at some point, because of his influence?

MICKEY DREXLER: Well, I probably shouldn't say this, but I told him he shouldn't do the deal. Because it doesn't make any sense. In my opinion. And my friends, I have a lot of friends at GAP still. But it doesn't work for someone like Kanye. He's not a corporate person. And GAP's a big corporation. And so I know the jacket sold out. They did $7 million on the one jacket overnight. No zipper, no nothing. I mean, try to be warned with those.

- Need the zipper.

MICKEY DREXLER: But he's a smart guy. But he shouldn't have done it. And I don't think they should have done it either. And I hope my friend Mark's not mad at me. We'll see what happens. It's very, very hard, culturally, to do what he's trying to do. So, it happens.

- You know, Mickey. Speaking of Kanye, it makes me think of, of course, the Yeezy shoes, and the sneaker craze that we've really seen in the last several years. I found myself, as a millennial man living in a city, thinking I should care a lot about my sneakers in the time before the pandemic. And when I go on Alex Mill, I see things that will actually last over time. I look at some sneakers I bought in 2018 that look ridiculous now. What do you make of the street wear craze that we've seen? The stock X scope, these other platforms. And where that fits into men's fashion today.

MICKEY DREXLER: Well, I can't ever argue with what customers like. It might not be right for us. We have a sneaker. It's actually my biggest-- this is silly. My biggest frustration. We have a sneaker called Baabuk. B-A-A-B-U-K. I found it three or four years ago. I went to Switzerland to visit with the owners of this tiny little company who redesigned the sneaker. A few of us here wear it every days of our life, but we're not Nike, we're not Adidas, we're not New Balance, and it's very hard. What I think of him is, again, it's personal or business. I think it's wonderful for business. Personally, I don't. You know, I'm not into it so I don't really understand it. But what do I think of it? It's just a way to look new and not look like everyone else. And, I don't really get it.

I can't help myself here. I've listened to a lot of your earnings calls through the years. J.Crew and a GAP way back in the day. What's your holiday season outlook?

MICKEY DREXLER: What is it, what? Holiday?

- Yeah. What's your holiday season outlook? Is it just going to be gangbusters?

MICKEY DREXLER: Well I think for us. You know, it's really nice to be small ish. I love the way our goods look. And I say that objectively. We're a tiny little-- we're not tiny and little anymore, we're getting bigger. But it's not about holiday. It never was for me about the outlook. It's always about how good are you at what you do? How good are your goods? And so the holiday outlook, well this holiday will be great for everyone. Because we're up against the pandemic. It has to be great. And then the real world will start again. Everyone's so happy out there now. But just let's wait to see what normal looks like again. How it is to be up against normal.

- What is your, before we let you go, Mickey, what is your favorite piece from your collection at Alex Mill?

MICKEY DREXLER: Well my favorite are the jumpsuits. Because, that's for women mostly, we just started carrying the guys. You always have to say your favorite is the one you can't keep in stock, to a degree. I have personal favorites. But it might be, we have some very cool chinos. But that's personal. And I only wear Alex Mill. This jacket, by the way, nylon and cotton. You might see a lot of this-- and our sweaters I think are incredible. But I sound like a retailer.

- Guys jumpsuits. I have never seen one of those. But maybe Miles, maybe you and I, oh, I see them right now on the website. That is, that's interesting stuff. I got to join the wait list, though.

MICKEY DREXLER: No, you call me, I'll get you.

- Know the right people. Miles with this his first jumpsuit.

- I got a 40 chest, 34 waist. So is that a large or medium, Mickey?

MICKEY DREXLER: It all started because a person on TV said I want a jumpsuit. We made him a jumpsuit, and then we ordered a whole bunch. And it blew out. Quickly. I wish it I could find it on here. Here it is.

- That is for Miles. That's perfect. That's a Robin Hood training outfit right there. That's wonderful.

- Yeah. I think maybe a medium. I'm right on the-- I need a marge.

- I'll give you Mickey's email after this. We'll and get it done. We'll leave it there. We could stay and talk to you all day. Mickey Drexler. It's good to see you. Thanks for the time today. Good luck at Alex Mill. We'll talk to you soon.

MICKEY DREXLER: Appreciate it. Bye bye.