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Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you.

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Speaker 1: Along with my co host Lisa brahma Witz. Each day

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Speaker 1: we bring you the most noteworthy and useful interviews for

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Speaker 1: you and your money, whether at the grocery store or

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Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple

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Speaker 1: podcast or wherever you listen to podcasts, as well as

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Speaker 1: at Bloomberg dot com. Well, China was the first to

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Speaker 1: experience the impact of the COVID nineteen pandemic. It is

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Speaker 1: now the first major economy starting to really come out

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Speaker 1: of it. On the other side, beginning to open up

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Speaker 1: the economy gradually. The questions are we seeing it in

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Speaker 1: the economic numbers? Yet? Nobody better to discuss that than

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Speaker 1: Leland Miller, CEO of the China Basebook International, based in

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Speaker 1: New York City. Leland, thanks so much for joining us

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Speaker 1: once again give us a sense of you know, the

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Speaker 1: lockdown appears to be ending in China. Is the economy

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Speaker 1: ramping back up? Well, so many of these terms have

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Speaker 1: lost their meeting. Is you know, ramping back up recovery?

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Speaker 1: You know, when you have an economy that stopped it

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Speaker 1: was shut down in February, things are going to get better,

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Speaker 1: so you're gonna see a recovery to some degree in

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Speaker 1: March and April. The question is what kind of recovery is.

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Speaker 1: Is this a recovery to earlier levels of growth? Is

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Speaker 1: it a recovery to target levels of growth? We're not

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Speaker 1: seeing anything like that. And the big story I think

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Speaker 1: going forward China will be able to get it's you know,

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Speaker 1: it's bigger companies, it's it's higher profile regions up by

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Speaker 1: focused stimulus. How is the rest of the economy going

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Speaker 1: to do? Though? How is the private sector? How are

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Speaker 1: sme s And this is what our focus really has

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Speaker 1: been over the past month, looking deep into that data,

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Speaker 1: and it's shown that the private sector has had a

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Speaker 1: much more difficult job trying to get back up to

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Speaker 1: speed than some of the more high profile and larger

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Speaker 1: s o E type firms. One thing that is so

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Speaker 1: wonderful about the work that you do is you look

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Speaker 1: on the ground, you don't necessarily look at the official

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Speaker 1: data and and sort of extrapolate out what that means

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Speaker 1: in terms of the GDP and the growth rate in China.

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Speaker 1: I'm looking right now the estimate from economists surveyed by

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Speaker 1: Bloomberg is that China will grow by one point eight

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Speaker 1: percent year over year. Uh, this is on a g

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Speaker 1: d P, a real GDP basis. Um, do you agree

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Speaker 1: with that? Do you think that that's about accurate? Yeah,

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Speaker 1: I think it's a pretty good number. You know, two

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Speaker 1: months ago, I think this week, two months ago, you know,

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Speaker 1: the three of us had a conversation, I said China

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Speaker 1: might be a two percent growth and everyone in the

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Speaker 1: room laughed because it sounded to outlandish at that time.

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Speaker 1: There we are, But I think, look here we are,

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Speaker 1: and you know, you know, China maybe on the top

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Speaker 1: end of global growth and maybe growing it just over zero.

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Speaker 1: So yeah, I think I think a realistic way to

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Speaker 1: look at this is is numbers that are barely in

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Speaker 1: the positive area. Um, we'll we'll have to see how

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Speaker 1: the US and Europe recover or not in the third

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Speaker 1: course and particularly the fourth quarter to be able to

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Speaker 1: to to put a number on it. But I think

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Speaker 1: numbers that are anything more than just a bit above

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Speaker 1: zero are are pretty optimistic at this point. So Leland,

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Speaker 1: in the US, the economy we've you know, it's we

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Speaker 1: become accustomed to recognize and that's really a consumer driven

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Speaker 1: economy maybe maybe of the U S economies driven by

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Speaker 1: the consumer. So if if you know, fiscal stimulus can

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Speaker 1: really address the consumer, you can really kind of get

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Speaker 1: the economy back moving again. Give us a sense of

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Speaker 1: how that's maybe different in China. Well, I think everybody

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Speaker 1: is is to some degree, uh reliant on on the

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Speaker 1: consumer to play an important part of the bounce back.

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Speaker 1: I think what you're seeing is sort of a multi

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Speaker 1: level strategy by Beijing and everyone watching Beijing to put

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Speaker 1: their own similar strategy. And you've got to get manufacturing

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Speaker 1: backed up. You get the factories, people back in factories

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Speaker 1: producing things, but you need orders for those factories, so

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Speaker 1: you can put get them up and running, but it

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Speaker 1: doesn't mean they're going to do that well. And then

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Speaker 1: when you look at services, okay, so you get services

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Speaker 1: firms reopening, but are people ordering them? Are people buying

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Speaker 1: from closed stores? The economy can be put up and

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Speaker 1: start running again, and people are showing up for their jobs,

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Speaker 1: but this is going to be a long, long, long

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Speaker 1: period in which people are slowly getting more comfortable and

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Speaker 1: doing more shopping outside and more traveling. So this is

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Speaker 1: just a long, long area and the consumer is not

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Speaker 1: going to be an active part of this early on. UH.

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Speaker 1: In this struggle, I'm struggling also to understand the political

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Speaker 1: backdrop as President Trump and Washington d C more broadly

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Speaker 1: bramps up pressure on China for a lack of transparency

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Speaker 1: when it comes to the coronavirus and it's spread its

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Speaker 1: original uh, it's its origination. I'm wondering, how is this

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Speaker 1: playing out in China? Do you have a sense of that? Well,

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Speaker 1: you know, I think that there is a lot of

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Speaker 1: rallying around the flag. I mean, certainly domestic surveys are

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Speaker 1: showing that people are sticking with China in a very defensive,

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Speaker 1: protective UH mode. But what what what China has been

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Speaker 1: doing has been very very very dangerous for its global image.

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Speaker 1: Instead of having come out after uh, you know, the

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Speaker 1: coronavirus spread around the globe with with this very very

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Speaker 1: quiet goodwill approach, it was it was blaming something on Italy,

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Speaker 1: blaming it on the US military, blaming Africans UH for

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Speaker 1: for their part in this. It's been a very mismanaged approach.

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Speaker 1: And so you're seeing the pushback on China right now

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Speaker 1: with you know, the desire for countries around the world

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Speaker 1: to have an investigation into the origins of coronavirus. I

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Speaker 1: think the one thing that that that that China is

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Speaker 1: actually being helped out by this is they're they're bunkering

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Speaker 1: down there in protective mode. And I think I think

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Speaker 1: people are rallying domestically under the idea that that China

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Speaker 1: is being attacked by the rest of the world. So

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Speaker 1: this may be as as ridiculous as it looks as

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Speaker 1: a strategy, considering the whole matter of world is getting

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Speaker 1: mad at China right now. It may not be the

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Speaker 1: worst domestic strategy if you get everybody on board and

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Speaker 1: it it sort of shifts attention away from the party's

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Speaker 1: role in in messing up preparations early on or hiding

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Speaker 1: the virus, and uh, you know, shift attention from that.

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Speaker 1: So Leland kind of looking back just over the last

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Speaker 1: several months, what did China do right in terms of

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Speaker 1: its economy. Was there a big fiscal stimulus on the

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Speaker 1: part of the Chinese center of economy. You know, you've

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Speaker 1: actually seen a much smaller stimulus so far than than

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Speaker 1: elsewhere around the globe. You know. The first thing that

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Speaker 1: was that was was done is that there was uh,

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Speaker 1: there was an offering to to to provide credit to

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Speaker 1: firms to deduce goodbye UM. But you saw something much

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Speaker 1: larger United States, of course, and so this is UM.

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Speaker 1: You know, it's the expectation is that they're going to

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Speaker 1: move from this provision of credit to keep things stable

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Speaker 1: to some sort of large, heavy infrastructure build out. We

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Speaker 1: have not seen that in our data. You know, our

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Speaker 1: Q two data is gonna be coming out and you

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Speaker 1: know in a matter of weeks, and and so we're

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Speaker 1: gonna be watching the property stector very closely. But I

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Speaker 1: think the most interesting thing about China's response so far

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Speaker 1: is that it hasn't been that big, particularly in comparison

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Speaker 1: to what's going on in the United States and other countries.

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Speaker 1: So I think that they're waiting to see how things

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Speaker 1: pan out around the globe, and then when they're in

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Speaker 1: build out low, you know, you may see heavier stimulus.

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Speaker 1: So you're seeing active credit, active credits, bigots, but you're

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Speaker 1: not yet seeing big, heavy stimulus, and that may be

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Speaker 1: something we're going to see more of, UH this summer

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Speaker 1: or into the full Do you think that that's leading

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Speaker 1: to people over estimating how much the Chinese economy can recover?

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Speaker 1: I think that's absolutely the case. I mean, look, you

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Speaker 1: just watch the headlines every every couple of weeks, some

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Speaker 1: big know they dropped a point or a half a

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Speaker 1: point in GDP projections by the end of the year.

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Speaker 1: You know, the important story here is that this is

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Speaker 1: not a China recovery story anymore. Now. China's recovering to

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Speaker 1: the extent they can, but in order for it to

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Speaker 1: be up and running at full capacity, you need a

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Speaker 1: recovery around the world. Now that's not gonna happen anytime soon.

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Speaker 1: It may not happen at all in and so what

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Speaker 1: they're gonna need is sort of this rollout where they're

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Speaker 1: they're providing stability of their businesses, they're avoiding widespread layoffs,

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Speaker 1: they're avoiding widespread bankruptcies, and just keeping things going the

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Speaker 1: best they can while the US gets back on line,

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Speaker 1: while Europe gets on back on line, and how trade

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Speaker 1: hopefully restarts and you can slowly get things up from there.

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Speaker 1: Leland Miller, thank you so much as always for your insights.

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Speaker 1: Leland Miller, chief executive Officer of China Beige Book International. Well,

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Speaker 1: we're pretty much through earning season this quarter, but I'm

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Speaker 1: not sure how much investors have really learned with so

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Speaker 1: many companies pulling back on guidance, and so many companies

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Speaker 1: are saying, we really don't know how our business is

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Speaker 1: going to perform for the remainder of the year. To

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Speaker 1: get a sense of how we might navigate the remainder

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Speaker 1: of from investment perspective, we welcome Eddie Perkin, chief equity

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Speaker 1: investment officer for Eaton Vance. I've about five eighteen billion

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Speaker 1: dollars under management. They're based in Boston. Eddie, thanks so

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Speaker 1: much for joining us. What are the takeaways that you

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Speaker 1: and your team have gleaned from the earnings reports we've

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Speaker 1: seen over the last couple of weeks. Yeah, well, thank

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Speaker 1: you for having me first of all, but I don't

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Speaker 1: think we've learned a whole lot. To be honest, most

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Speaker 1: companies have pulled guidance at this point, which is what

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Speaker 1: you would expect. Earnings generally were okay relative to significantly

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Speaker 1: lowered expectations, and I think the futures highly uncertain. Warren

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Speaker 1: Buffets set it over the weekend at the Berkshire Hathaway

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Speaker 1: Shareholder meaning the range of outcomes remains very, very wide,

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Speaker 1: and uh, you know, I think it's probably foolish to

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Speaker 1: think that a CEO or CFO of a company is

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Speaker 1: going to have any better idea of what's likely to

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Speaker 1: transpire in the economy in the coming months. So I

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Speaker 1: think we're living in a world of uncertainty and we

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Speaker 1: all need to get used to it, all right, Eddie,

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Speaker 1: Since you mentioned Warren Buffett, let's go there. A lot

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Speaker 1: of people took his moves in the first quarter and

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Speaker 1: frankly in April, as well of being a net seller

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Speaker 1: of stocks into the weakness and not making any investments.

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Speaker 1: Just to give you a sense, his cash pile is

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Speaker 1: now a third of his market cap of Berkshire Hathway,

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Speaker 1: with more than a hundred and thirty billion dollars of

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Speaker 1: cash sitting there. Do you take that, Eddie, as a

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Speaker 1: bearished signal assign that he sees further losses ahead that

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Speaker 1: investors should heed. I think you always have to um

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Speaker 1: pay attention to what Warren Buffett is up to. He's

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Speaker 1: he's obviously a great investor, he has a war chest.

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Speaker 1: He made some very smart moves in the two eight

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Speaker 1: two thousand nine period. I think a couple of differences

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Speaker 1: this time around. One is everything rebounded so quickly that

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Speaker 1: even for someone like Buffett who can move very quickly, um,

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Speaker 1: things kind of got away from him very quickly. He said,

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Speaker 1: you know, he's starting to get phone calls from people

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Speaker 1: who needed capital. But as soon as this head came

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Speaker 1: in and back stopped everything, it kind of ran away

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Speaker 1: from him and the and the phone call stopped. So

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Speaker 1: I just think the rebound in the markets was so

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Speaker 1: quick that that he didn't have a chance to move.

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Speaker 1: I do find it interesting that he spent an extensive

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Speaker 1: portion of the call making the optimistic case for America

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Speaker 1: and America is resilient, that sort of language. But then

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Speaker 1: his actions were very much opposite to that, where he

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Speaker 1: was selling his airline stocks and uh uh not putting

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Speaker 1: money fresh money to work in the market. So I think,

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Speaker 1: you know, pay attention to his actions perhaps more than

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Speaker 1: his words. So, Eddie, so are you one. Are you

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Speaker 1: in that camp that feels like maybe this rebound off

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Speaker 1: of that initial decline in the market, this rebound where

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Speaker 1: we retraced maybe half of that decline, and granted it's

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Speaker 1: it's due to all the liquidity put in the marketplace

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Speaker 1: and the federal stimulus and things like that, is it

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Speaker 1: too much too fast and you not trust it. I'm

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Speaker 1: tempted to go there. I think that that feels right.

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Speaker 1: The problem is I have a lot of company with

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Speaker 1: that view. I think that's the consensus view in the

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Speaker 1: market right now, and I think people are sort of

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Speaker 1: scratching their heads as to how we were able to

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Speaker 1: recover so quickly when the you know, the fundamentals of

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Speaker 1: the global economy are still highly uncertain. The way I

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Speaker 1: would try to size it again, operating within you know,

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Speaker 1: wide range of uncertainty, is if you look at estimates,

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Speaker 1: so next year not which is kind of you know,

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Speaker 1: a lost cause at this point, but estimates for earnings

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Speaker 1: are about below what they were what they were forecasts

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Speaker 1: to be just a few months ago, and so that's

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Speaker 1: the hit to next year's earnings. That's probably not all

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Speaker 1: permanent um and probably estimates were too high to begin with.

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Speaker 1: But let's say earnings are down, you know, kind of

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Speaker 1: for several years and into the future ten percent, and

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Speaker 1: then you use a higher risk premium given all the uncertainty,

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Speaker 1: maybe the right mark down for stocks is about, given

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Speaker 1: what we know today, that's about where the broad market

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Speaker 1: averages are. And so maybe the market's got it about right.

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Speaker 1: I think what's interesting is beneath the surface you have

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Speaker 1: large cap growth stocks which are barely down at all,

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Speaker 1: and in some cases are higher, and you have beaten

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Speaker 1: up small caps, deep value stocks, energy financials that are

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Speaker 1: down thirty. So I think the interesting calls to make

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Speaker 1: or beneath the surface, not with the market aggregates. All right,

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Speaker 1: So let's go there with the Russell two thousand in particular,

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Speaker 1: because I was looking at the earnings figures so far

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Speaker 1: we are about halfway through the earning season, and the

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Speaker 1: Russell two thousand companies are getting beaten up way more

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Speaker 1: than the bigger ones. Not that surprising. Are you going

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Speaker 1: to make a contrarian case and say that it's time

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Speaker 1: to pile in and that that's all been priced in.

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Speaker 1: I wouldn't be as bold as that, but I would

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Speaker 1: say that the margin, that's where investors should be putting money.

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Speaker 1: I think you should be putting money into value stocks

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Speaker 1: at the margin. You should be putting money into small

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Speaker 1: cap stocks at the margin. If you look at I

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Speaker 1: was looking at a graph the other day on Bloomberg

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Speaker 1: actually of the Russell one thousand growth versus the Russell

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Speaker 1: two thousand value so large growth versus small value over

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Speaker 1: the last three years, and uh large growth had beaten

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Speaker 1: small value by nearly ninety percent cumulatively. So you're now

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Speaker 1: at a point where the large cap growth stocks, the

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Speaker 1: big tech stocks are at a uh you know, they're

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Speaker 1: at a uh premium to the market valuation, and small

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Speaker 1: cap values at a discount. So there's a very wide

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Speaker 1: range from a valuation perspective that I think I'm as

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Speaker 1: a value investor, I'm I'm I'm highly tempted by But

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Speaker 1: the timing of that call is difficult, So I would

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Speaker 1: do it very gradually dollar cost average and and kind

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Speaker 1: of rebalance into the part of the market that has

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Speaker 1: lacked behind. Eddie, thank you so much for being with us.

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Speaker 1: Eddie Perkin his chief equity investment officer at Eaton Vans,

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Speaker 1: overseeing more than five billion dollars at that firm. Warren

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Speaker 1: Buffett of Berkshire Hathaway certainly set the tone when he

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Speaker 1: came out and said he was a net seller of

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Speaker 1: equity so far this year, exiting his stakes in the

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Speaker 1: major US airlines, saying that it was a changed game

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Speaker 1: for them, also talking about that cash pile. I mean,

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Speaker 1: this has been really a big question what will he

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Speaker 1: do with the more than a hundred and thirty billion

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Speaker 1: dollars in cash? Tara La Chapelle, Bloomberg opinion columnist covering

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Speaker 1: Berkshire Hathaway for years, and Warren Buffett. Can we first

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Speaker 1: start talking about his tone? He seemed pretty somber, and

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Speaker 1: he also normally does talk about the dynamism of the U. S.

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Speaker 1: Economy and he got there. But did there seem like

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Speaker 1: there was a little bit of a lack of conviction? Tara, Yeah,

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Speaker 1: I mean I could see why today people are saying that,

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Speaker 1: you know, he was a little bit pessimistic, but I

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Speaker 1: think he was also just being realistic. You mean, he

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Speaker 1: did start off the meeting with sort of a beautiful

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Speaker 1: sermon about how America is going to get through this,

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Speaker 1: and I think it's kind of what people needed to

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Speaker 1: hear at that moment. It reminded me a little bit

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Speaker 1: of like when we listen to Governor Cuomo and you

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Speaker 1: kind of leave there, you know, you feel a little

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Speaker 1: bit down about some of the news what we're hearing

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Speaker 1: was happening, but at the same time, there's like that

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Speaker 1: little bit of hope. And that's what I got from Buffett,

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Speaker 1: but he you know, he isn't buying stocks, he isn't

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Speaker 1: doing deals, and that does say a lot about what

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Speaker 1: he thinks about this moment right now. I think a

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Speaker 1: big piece of that is that the FETE has taken

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Speaker 1: extraordinary actions to kind of prop up the markets, and

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Speaker 1: that has eliminated some of that opportunity that you would

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Speaker 1: normally expect Buffett to seize in a moment like this.

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Speaker 1: So terror is there. I know you talked to a

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Speaker 1: lot of Buffet watchers and uh you know, is there

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Speaker 1: a sector of the economy. Is there a uh an

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Speaker 1: industry that they would like to see him allocate some

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Speaker 1: real coppled We're talking tens of billions of dollars, whether

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Speaker 1: it's financials or consumer or energy. I think it depends

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Speaker 1: who you ask. You know, everyone I've talked to you

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Speaker 1: has had a different opinion on that, and I think

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Speaker 1: maybe the only consensus is that they want to see

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Speaker 1: Buffet spend that cash. And he kind of signaled that

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Speaker 1: he's not really sure where to spend it right now

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Speaker 1: that even though he's still you know, very much confident

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Speaker 1: in America's future. You know, he's America's biggest chearlier that

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Speaker 1: he thinks that this pandemic is going to change consumer behavior,

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Speaker 1: and because of that, it's having him rethink what he

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Speaker 1: thinks about some of these specific industries long term, like

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Speaker 1: the airline industry, where he seemed to be all in

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Speaker 1: and all of a sudden he has completely exited. I'm

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Speaker 1: struggling with the idea of of the fedback stop that

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Speaker 1: he talked about, and I guess that what I'm struggling

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Speaker 1: with is the idea the FED has propped up valuations

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Speaker 1: of companies that might have otherwise been left for dead

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Speaker 1: and forced to reach out to a Warren Buffett where

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Speaker 1: it would enable him to for terms that would be

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Speaker 1: beneficial to him and probably worse for these companies. What

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Speaker 1: I'm struggling to understand is is Warren Buffett's reluctance to

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Speaker 1: lend these companies a statement about their lack of viability

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Speaker 1: or is it a statement of just a lack of

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Speaker 1: profitability with these loans that previously he would have enjoyed

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Speaker 1: saying the two two nine period. It's a difference. Yeah,

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Speaker 1: it's a good question, and it's hard to know his thinking,

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Speaker 1: but my feeling coming out of that that meaning and

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Speaker 1: what he was saying was more of the ladder that

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Speaker 1: they're willing to do anything if the terms they're right,

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Speaker 1: you know, if they look at a business and they

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Speaker 1: think that it's going to be around for a long time,

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Speaker 1: even though it's going through a difficult period now that

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Speaker 1: they're they want to be all in on it, but

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Speaker 1: it needs to be at a price that worked for him,

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Speaker 1: and he's very very picky about that. You know. As

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Speaker 1: the market went through this period of a bunch of

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Speaker 1: mega mergers and all these different companies making deals, buffets

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Speaker 1: that in the sidelines because you said, even though there's

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Speaker 1: a lot out there, we would like to buy and

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Speaker 1: not let these other companies get a whole of we

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Speaker 1: are not willing to pay certain valuations. And I guess

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Speaker 1: right now it's a little bit different than the financial

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Speaker 1: crisis where he kind of had his um you know, pickings,

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Speaker 1: and right now he's saying, yeah, it looks like things

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Speaker 1: are beaten down, but it was really temporary and nowhere

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Speaker 1: near as deep as it was in two thousands eight.

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Speaker 1: The news came out this morning in the retail space,

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Speaker 1: Ja Crew filed for bankruptcy, felled by the pandemic as

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Speaker 1: well as a heavy debt load incurred from a previous

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Speaker 1: leverage buy out. The question I think for many investors

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Speaker 1: is simply, is this just the first domino to fall

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Speaker 1: in the beleaguered retail space. To get a sense of

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Speaker 1: where retail is going and how it's dealing with this pandemic,

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Speaker 1: we welcome Punham Goyle, senior US Retail Adams for Bloomberg Intelligence. Punham,

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Speaker 1: thanks so much for joining us here. I guess this

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Speaker 1: j crude news just kind of crystallizes for a lot

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Speaker 1: of investors that ge the retail space has really been

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Speaker 1: under a lot of stress over the past decade or so.

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Speaker 1: Is more and more people's shop online. Now you layer

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Speaker 1: on top of that a pandemic. Will that be just

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Speaker 1: too much for a lot of these retailers to bear?

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Speaker 1: How do you how do you kind of view kind

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Speaker 1: of the developments in the retail space? Sure, I thanks Paul,

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Speaker 1: So I think I think the question here really is,

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Speaker 1: you know, the retail spaces you said has been under

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Speaker 1: termoil for the last decade, and um, what we're seeing

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Speaker 1: now with the pandemic is retailers ever highly leveraged but

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Speaker 1: had a lot of debt. We're finding it hard to

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Speaker 1: see a path to recovery given the uncertainty that we've

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Speaker 1: faced today. So I think what this just does that

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Speaker 1: it accelerates, essentially the fallout of retailers that do have

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Speaker 1: a lot of depth coming to in a short period

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Speaker 1: of time. So within the next twelve to twenty four months,

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Speaker 1: they really need to either see a path to be

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Speaker 1: able to fulfill those debt obligations or seek some sort

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Speaker 1: of protection such as you know, Chapter eleven our bankruptcy.

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Speaker 1: Just to look at some numbers that came out from

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Speaker 1: Fitch Ratings today, so Ja Cruz bankruptcy pushes the twelve

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Speaker 1: months trailing default rate for loan for loans in the

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Speaker 1: retail space to nine from seven percent at the end

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Speaker 1: of April, and they predict that this def right, we'll

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Speaker 1: reach nine percent by your end. Named Marcus and j C.

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Speaker 1: Putney up next with expected insolvencies. I'm just wondering, Punum,

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Speaker 1: are they going to come out of bankruptcy? I mean,

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Speaker 1: Jay crew Is actually would be staying open if it

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Speaker 1: were open, but it's not open. Um, it's a Chapter

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Speaker 1: eleven bankruptcy. Are we going to continue to see these

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Speaker 1: names or is this the end of them. I think

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Speaker 1: you'll still see some of these names where Jay Crew.

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Speaker 1: You know, I read in the release that they were

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Speaker 1: talking about keeping Made Well and J Crew stores open

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Speaker 1: once they can reopen for business. If you look back

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Speaker 1: just at J Crew, you know they've really suffered from

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Speaker 1: product quality issues, from just being off paring terms the

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Speaker 1: fashion and the last decade are it's in the last

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Speaker 1: few years really, But in the third quarter when they

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Speaker 1: did group for their last quarters, their sales that Made

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Speaker 1: Well names Your sales were up ten percent and JA

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Speaker 1: crew sales Namesake We're flat, and they did start to

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Speaker 1: show some improvement. So the brand still has some equity.

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Speaker 1: It's just with the death that they have in place,

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Speaker 1: it's hard for them to overcome that and really regrow

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Speaker 1: the business. Um, when you talk about someone like a G. V. Penny,

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Speaker 1: you know, the question is a lot bigger than because

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Speaker 1: it's a department store. Our department store is still relevant,

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Speaker 1: you know, I get that question all the time, Um,

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Speaker 1: do they need to have the eight hundred plus stores

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Speaker 1: that they had? So I think there's a lot more

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Speaker 1: consolidation happening in that space, and there is in a

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Speaker 1: brand that you can relate and reconnect back with the customer.

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Speaker 1: So it is the traditional retail mall, the enclosed mall.

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Speaker 1: I'm thinking, is that really going to be at risk here? Um?

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Speaker 1: And I know in the past that's there's been pressure

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Speaker 1: on these malls, but it seems like I might even

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Speaker 1: be more enhanced now post pandemic. Absolutely, but more than

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Speaker 1: a thousand UM enclosed malls and with really you know,

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Speaker 1: less than half of them being considered as centers that

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Speaker 1: anyone whould want to be in a B plus centers

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Speaker 1: as we call them, I think this would accelerate so um,

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Speaker 1: the close out of these mall they're really these moll

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Speaker 1: morphing into other types of destinations. We've heard from the

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Speaker 1: GAP and other retailers that as they look at the

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Speaker 1: stories that they've closed, um, you know, many of them

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Speaker 1: may not reopen ever again. So as that starts to

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Speaker 1: happen more broadly across the board at certain centers, you

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Speaker 1: can argue that maybe these centers don't even reopen again

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Speaker 1: and put them Coyle, thank you so much for being

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Speaker 1: with us put them Goyle, senior US retail analyst for

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Speaker 1: Bloomberg Intelligence. Thanks for listening to the Bloomberg P and

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Speaker 1: Apple Podcasts or whatever podcast platform you prefer. Paul Sweeney,

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