1 00:00:05,240 --> 00:00:07,360 Speaker 1: This is what the Flux. I'm Brett and. 2 00:00:07,320 --> 00:00:09,600 Speaker 2: I'm just in as Monday, the ninth of June. 3 00:00:09,760 --> 00:00:12,200 Speaker 1: No rest for us today, Juzzy boy. Now get this one. 4 00:00:12,240 --> 00:00:15,840 Speaker 1: Australia is officially back in a per capita recession. While 5 00:00:15,880 --> 00:00:19,280 Speaker 1: GDP increased in the March quarter by zero point two percent, 6 00:00:19,400 --> 00:00:21,960 Speaker 1: it dropped by zero point two percent per person or 7 00:00:22,040 --> 00:00:25,160 Speaker 1: per capita in that quarter. And while this sounds bad, 8 00:00:25,280 --> 00:00:27,920 Speaker 1: it's just a technical measure and it might actually be 9 00:00:27,960 --> 00:00:30,880 Speaker 1: helpful for the RBA if it wants to justify another. 10 00:00:30,640 --> 00:00:33,800 Speaker 2: Drop thingers crossby Man. Speaking of the RBA dropping cash rates, now, 11 00:00:33,920 --> 00:00:35,960 Speaker 2: we know that when the cash rate drops, all lenders 12 00:00:36,000 --> 00:00:38,760 Speaker 2: start clamoring your business once again, which is why it 13 00:00:38,840 --> 00:00:41,640 Speaker 2: is such a good time to look at refinancing your homelan. 14 00:00:41,760 --> 00:00:44,440 Speaker 2: We cover it all in the Flux app, including script 15 00:00:44,520 --> 00:00:46,640 Speaker 2: for negotiating your homelan. Make sure it download the Flux 16 00:00:46,680 --> 00:00:47,640 Speaker 2: app and check it out. 17 00:00:47,760 --> 00:00:50,919 Speaker 1: Three highly informative stories today, Juzzy boy, let's do it 18 00:00:50,960 --> 00:00:54,000 Speaker 1: for our first. David Jones is in the red again, 19 00:00:54,080 --> 00:00:56,760 Speaker 1: but its private equity owners are going all in with 20 00:00:56,840 --> 00:00:59,280 Speaker 1: a one hundred and ninety million dollar debt boost. 21 00:00:59,320 --> 00:01:01,520 Speaker 2: A modern gloves for a very old name, b Man, 22 00:01:01,560 --> 00:01:02,319 Speaker 2: So tell me more. 23 00:01:02,360 --> 00:01:05,039 Speaker 1: Well, David Jones was founded in eighteen thirty eight and 24 00:01:05,160 --> 00:01:06,800 Speaker 1: is the oldest department store in Australia. 25 00:01:06,880 --> 00:01:09,560 Speaker 2: Now you might remember it was acquired by Woolworth's Holdings, 26 00:01:09,560 --> 00:01:12,399 Speaker 2: a South African retailer, back in twenty fourteen for two 27 00:01:12,400 --> 00:01:13,759 Speaker 2: point one billion dollars. 28 00:01:13,800 --> 00:01:16,600 Speaker 1: Not the Woolworth's in Australia. 29 00:01:15,880 --> 00:01:18,319 Speaker 2: But be Man, it's fair to say Wooworth's Holdings, the 30 00:01:18,319 --> 00:01:20,959 Speaker 2: South African company, took it from coture to end of 31 00:01:21,000 --> 00:01:22,560 Speaker 2: season clearance racks. Yeah. 32 00:01:22,600 --> 00:01:25,039 Speaker 1: Then in twenty twenty two it was acquired by the 33 00:01:25,040 --> 00:01:28,080 Speaker 1: private equity company Anchorage Capital for one hundred million dollars. 34 00:01:28,160 --> 00:01:30,520 Speaker 2: And now David Jones is a private company, it doesn't 35 00:01:30,560 --> 00:01:32,480 Speaker 2: need to publicize its accounts anymore. 36 00:01:32,560 --> 00:01:35,840 Speaker 1: But filings with ACIK show that David Jones just slid 37 00:01:35,920 --> 00:01:38,480 Speaker 1: to a seventy four point four million dollar loss in 38 00:01:38,520 --> 00:01:40,600 Speaker 1: the twelve months to June twenty twenty. 39 00:01:40,360 --> 00:01:43,399 Speaker 2: Three, despite turning a two hundred and eighty nine million 40 00:01:43,400 --> 00:01:45,319 Speaker 2: dollar profit in the five months prior. 41 00:01:45,400 --> 00:01:48,040 Speaker 1: But Jaziboy Anchorage is not given up. 42 00:01:48,080 --> 00:01:50,920 Speaker 2: In fact, it's doubling down. Be Man, It's investing sixty 43 00:01:50,960 --> 00:01:53,240 Speaker 2: five million dollars into tech upgrades for David. 44 00:01:53,120 --> 00:01:55,440 Speaker 1: Jones on top of a one hundred ninety million dollar 45 00:01:55,480 --> 00:01:56,400 Speaker 1: debt facility. 46 00:01:56,480 --> 00:01:58,440 Speaker 2: And that is a lot of money going into a 47 00:01:58,480 --> 00:02:00,960 Speaker 2: company in a declining set of retail. 48 00:02:01,120 --> 00:02:02,560 Speaker 1: Yeah, so what is the key learning here? 49 00:02:02,600 --> 00:02:05,440 Speaker 2: The department store business model ain't what she used to be. 50 00:02:05,760 --> 00:02:07,880 Speaker 1: In fact, Juzzy Boy, over the last two decades, the 51 00:02:08,000 --> 00:02:10,840 Speaker 1: entire segment has been in structural decline. 52 00:02:10,919 --> 00:02:14,400 Speaker 2: Department stores once the crown jewels of retail. 53 00:02:14,080 --> 00:02:16,800 Speaker 1: For Juzzy Boy. Another example in the US, Barney's New 54 00:02:16,880 --> 00:02:20,040 Speaker 1: York shut down in twenty nineteen after nearly a century 55 00:02:20,080 --> 00:02:21,720 Speaker 1: of selling luxury clothes. 56 00:02:21,840 --> 00:02:24,080 Speaker 2: Then there was Lord and Taylor, another department store in 57 00:02:24,080 --> 00:02:26,680 Speaker 2: the US, the shutdown after one hundred and ninety five years. 58 00:02:26,440 --> 00:02:28,760 Speaker 1: And Hudson's Bay, one of the oldest department stores in 59 00:02:28,800 --> 00:02:31,560 Speaker 1: the world, closed ninety six stores just last week. 60 00:02:31,560 --> 00:02:34,160 Speaker 2: Then we've got Macy's in Nordstroam. They've both shrunked their 61 00:02:34,160 --> 00:02:36,760 Speaker 2: store footprint and pivoted heavily to e commerce. 62 00:02:36,840 --> 00:02:39,320 Speaker 1: So David Jones isn't just facing a bad quarter. It's 63 00:02:39,400 --> 00:02:42,359 Speaker 1: up against a global shift in how people shop, and. 64 00:02:42,320 --> 00:02:45,640 Speaker 2: The man history suggests that not everyone makes it through. 65 00:02:45,800 --> 00:02:48,840 Speaker 1: For our second story, Tesla saw one hundred and fifty 66 00:02:48,840 --> 00:02:51,840 Speaker 1: billion US dollars wiped from its value a late last 67 00:02:51,840 --> 00:02:55,640 Speaker 1: week after Elon Musk and Donald Trump's bromance was officially over. 68 00:02:56,360 --> 00:02:58,400 Speaker 2: This could be bigger than Chris Rock and Will Smith 69 00:02:58,440 --> 00:03:01,040 Speaker 2: be Man. He's potentially more bruisy, So tell me more. 70 00:03:00,960 --> 00:03:02,960 Speaker 1: Well, juzzy boy. We know that Elon is the founder 71 00:03:03,000 --> 00:03:05,600 Speaker 1: of Tesla and part time internet troll YEP. 72 00:03:05,639 --> 00:03:07,920 Speaker 2: He's been a key part of Tesla's two hundred and 73 00:03:07,919 --> 00:03:10,240 Speaker 2: twenty x growth since it listed on the Nasdaq in 74 00:03:10,280 --> 00:03:13,560 Speaker 2: twenty ten, and late last year, when President Donald Trump 75 00:03:13,760 --> 00:03:16,679 Speaker 2: was re elected as the forty seventh president, Tesla investors 76 00:03:16,680 --> 00:03:19,360 Speaker 2: were frothened. That was because Trump and Musk were in 77 00:03:19,600 --> 00:03:20,880 Speaker 2: full bromance mode. 78 00:03:20,960 --> 00:03:24,280 Speaker 1: But as basically we all predicted, this brotherhood has come 79 00:03:24,320 --> 00:03:28,519 Speaker 1: to a very swift ending. After Musk criticized Trump's new Big, Bad, 80 00:03:28,560 --> 00:03:29,720 Speaker 1: Beautiful Bill yep. 81 00:03:29,600 --> 00:03:33,280 Speaker 2: Musk claimed it undid all of his doge government spending carts. 82 00:03:33,440 --> 00:03:37,600 Speaker 1: Then Trump tweeted back that Musk had Trump derangement syndrome, 83 00:03:37,920 --> 00:03:38,360 Speaker 1: and then. 84 00:03:38,240 --> 00:03:40,640 Speaker 2: There was a live tweeting match between the two of them, or. 85 00:03:40,560 --> 00:03:42,440 Speaker 1: As we like to call it insult Tennis. 86 00:03:42,720 --> 00:03:45,720 Speaker 2: Next minute, Tesla's share price filled fourteen percent. 87 00:03:45,560 --> 00:03:48,760 Speaker 1: And Juzzy boy. The worry isn't just brused egos here, 88 00:03:48,840 --> 00:03:51,120 Speaker 1: there's fear for what this may mean for Tesla. 89 00:03:51,240 --> 00:03:54,520 Speaker 2: Yeah. Trump even signaled he may terminate government contracts with 90 00:03:54,600 --> 00:03:55,920 Speaker 2: all of Musk's companies. 91 00:03:56,120 --> 00:03:58,880 Speaker 1: So it's no surprise that Tesla had its biggest one 92 00:03:58,920 --> 00:03:59,640 Speaker 1: day fall ever. 93 00:04:00,120 --> 00:04:01,440 Speaker 2: So what is the key leading here? 94 00:04:01,480 --> 00:04:03,560 Speaker 1: When you're trying to build the future of any industry, 95 00:04:03,720 --> 00:04:07,240 Speaker 1: it does pay to stay friendly with the current government. 96 00:04:06,920 --> 00:04:09,040 Speaker 2: Aka the people writing the laws. 97 00:04:09,160 --> 00:04:11,760 Speaker 1: For example, Jazi Boyd, Tesla has been heavily fueled by 98 00:04:11,760 --> 00:04:13,200 Speaker 1: government love over the years. 99 00:04:13,000 --> 00:04:16,200 Speaker 2: Electric vehicle buyers received subsidies which help drive sales for 100 00:04:16,240 --> 00:04:16,920 Speaker 2: Tesla cars. 101 00:04:17,200 --> 00:04:20,520 Speaker 1: There were favorable conditions for Tesla as Trump pushed tariffs 102 00:04:20,560 --> 00:04:23,840 Speaker 1: on European and Chinese electric vehicle makers. 103 00:04:23,520 --> 00:04:26,120 Speaker 2: And then there have been big procurement deals like Tesla's 104 00:04:26,120 --> 00:04:27,560 Speaker 2: supplying government fleets. 105 00:04:27,640 --> 00:04:29,960 Speaker 1: They're on top of that, Tesla investors were hoping for 106 00:04:30,160 --> 00:04:33,080 Speaker 1: more loose regulation around self driving technology, and. 107 00:04:33,120 --> 00:04:35,840 Speaker 2: That's why Tesla's share price jumped nearly fifteen percent when 108 00:04:35,839 --> 00:04:37,400 Speaker 2: Trump was first elected. 109 00:04:37,120 --> 00:04:39,760 Speaker 1: And Tesla's share price jumped sixty two percent in the 110 00:04:40,000 --> 00:04:41,520 Speaker 1: thirty days after the election. 111 00:04:41,640 --> 00:04:43,800 Speaker 2: But all of this can go in an instant when 112 00:04:43,839 --> 00:04:45,120 Speaker 2: the bromance breaks. 113 00:04:44,920 --> 00:04:47,480 Speaker 1: Up, and if Trump creates more difficult conditions for Tesla, 114 00:04:47,600 --> 00:04:50,480 Speaker 1: it could chip away at Tesla's future revenue and market share. 115 00:04:50,560 --> 00:04:55,000 Speaker 1: For our third and final Storymez Australia is defying the 116 00:04:55,120 --> 00:04:58,000 Speaker 1: rise in cost of living after records says in Australia 117 00:04:58,080 --> 00:05:01,080 Speaker 1: because many people just can't stop buying damn Burken bags. 118 00:05:01,120 --> 00:05:02,880 Speaker 2: While some people are cutting back on brunch, be men. 119 00:05:03,000 --> 00:05:06,040 Speaker 2: Ermez customers are splashing four thousand dollars on a phone case. 120 00:05:06,440 --> 00:05:07,560 Speaker 2: So what is going on here? 121 00:05:07,640 --> 00:05:11,200 Speaker 1: Well? Ermez was founded in eighteen thirty seven in Paris 122 00:05:11,240 --> 00:05:14,200 Speaker 1: and is known for its ultra luxury handbags, silk scarves 123 00:05:14,240 --> 00:05:15,719 Speaker 1: and its leather goods justin Boy. 124 00:05:15,640 --> 00:05:19,080 Speaker 2: And of course the famously unattainable Burken bag. 125 00:05:19,360 --> 00:05:23,440 Speaker 1: We'd be talking ranging from thirty thousand dollars to five 126 00:05:23,520 --> 00:05:24,640 Speaker 1: hundred thousand US dollars. 127 00:05:24,680 --> 00:05:26,760 Speaker 2: And be man who said cost of living crisis because 128 00:05:26,800 --> 00:05:28,800 Speaker 2: it certainly wasn't Umez customers. 129 00:05:28,440 --> 00:05:30,960 Speaker 1: We'll get this one. Ermez Australia racked up five hundred 130 00:05:31,000 --> 00:05:34,039 Speaker 1: and seventy eight million dollars in revenue in twenty twenty four, 131 00:05:34,160 --> 00:05:34,440 Speaker 1: and that. 132 00:05:34,440 --> 00:05:36,960 Speaker 2: Was a jump of twenty one percent from twenty twenty three. 133 00:05:37,040 --> 00:05:39,279 Speaker 1: Doll made one hundred and four point five million dollars 134 00:05:39,279 --> 00:05:40,560 Speaker 1: per Rofferini. 135 00:05:40,160 --> 00:05:42,480 Speaker 2: And b Man. Ermez has more than doubled its revenue 136 00:05:42,480 --> 00:05:44,680 Speaker 2: in Australia in just the last four years. 137 00:05:44,760 --> 00:05:48,000 Speaker 1: While other luxury brands are slowing down globally, Ermez continues 138 00:05:48,000 --> 00:05:49,080 Speaker 1: to ride high because. 139 00:05:48,960 --> 00:05:52,360 Speaker 2: Luxury isn't dead. It's just very very exclusive. 140 00:05:52,520 --> 00:05:54,440 Speaker 1: Interesting call. So what would you say is the key 141 00:05:54,480 --> 00:05:55,040 Speaker 1: learning here? 142 00:05:55,120 --> 00:05:58,040 Speaker 2: Most products get less desirable the more expensive they are, 143 00:05:58,080 --> 00:05:59,920 Speaker 2: but some luxury goods operate in. 144 00:05:59,839 --> 00:06:03,560 Speaker 1: A different world, into the concept of a veblen good, 145 00:06:03,640 --> 00:06:06,359 Speaker 1: a type of product where demand actually increases as the 146 00:06:06,400 --> 00:06:07,160 Speaker 1: price increases. 147 00:06:07,200 --> 00:06:09,719 Speaker 2: The more exclusive and price it is, the more people 148 00:06:09,720 --> 00:06:12,120 Speaker 2: want it. In fact, the man Ames controls supply so 149 00:06:12,279 --> 00:06:14,960 Speaker 2: tightly the buyers often have to build up a purchase 150 00:06:15,040 --> 00:06:16,960 Speaker 2: history just to be offered a bag. 151 00:06:17,160 --> 00:06:19,960 Speaker 1: And not only are Ome's bags a status symbol, but 152 00:06:20,000 --> 00:06:22,320 Speaker 1: supposedly they're also a good investment as well. 153 00:06:22,360 --> 00:06:25,599 Speaker 2: Amezz's burken bags had an average annual increase in value 154 00:06:25,640 --> 00:06:28,920 Speaker 2: of fourteen point two percent between nineteen eighty and twenty fifteen. 155 00:06:29,160 --> 00:06:31,520 Speaker 1: That outperformed the S and P five hundred, which returned 156 00:06:31,520 --> 00:06:33,520 Speaker 1: an average of ten percent. So not only do Burke 157 00:06:33,560 --> 00:06:36,240 Speaker 1: and buyers get to sling a little bit of luxury 158 00:06:36,279 --> 00:06:38,200 Speaker 1: on their shoulder, but they get to sell it for 159 00:06:38,279 --> 00:06:39,360 Speaker 1: a great return. 160 00:06:39,160 --> 00:06:42,200 Speaker 2: If they ever take it off. Yep, Flex Am refinance 161 00:06:42,279 --> 00:06:45,000 Speaker 2: your homeland can say thousands of dollars every single year, 162 00:06:45,040 --> 00:06:46,680 Speaker 2: but the biggest thing we hear from the flexdam is 163 00:06:46,680 --> 00:06:48,360 Speaker 2: how do I even do it? That's why we've broken 164 00:06:48,360 --> 00:06:50,240 Speaker 2: it down in the Flux app. Make sure to check 165 00:06:50,240 --> 00:06:52,760 Speaker 2: it out in the Flex app to renegotiate your homeland. 166 00:06:52,800 --> 00:06:55,120 Speaker 1: Thanks for listening and we'll see you on Wednesday.