Speaker 1: Broadcasting live to New York, Bloomberg eleven, Rio to Washington,
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Speaker 1: Bloomberg dot Gone. This is taking Stock. I'm Catheene Hayes,
Speaker 1: my co host Pim Foxes out of the office this afternoon.
Speaker 1: Look out Costco, look out Sam's Club. Here comes box
Speaker 1: the wholesale experience for those without the time means or
Speaker 1: patients for a brick and mortar warehouse club trip. We're
Speaker 1: gonna be speaking to the CEO of Boxed about his
Speaker 1: business model, just how big he expects to get and
Speaker 1: something very special he's doing for employees who are in love.
Speaker 1: You know who I love Charlie Pellett. He's in the
Speaker 1: newsroom now and he's got a bloom big business flash.
Speaker 1: We are looking at an up date for stocks or
Speaker 1: with the DAL the SMP and NASDAC all hired. Thank you,
Speaker 1: Kathleen Hayes. Stocks rebounding from a morning sell off, we
Speaker 1: are now at the best level of the afternoon holding
Speaker 1: near a six week high. Treasuries are advancing as investors
Speaker 1: away tomorrow's jobs data for clues about the timing of
Speaker 1: the Federal reserves next policy move Right now, the tenure
Speaker 1: up eight thirty seconds, the yield there one point eight percent.
Speaker 1: FED Governor Daniel Torulo says eight of the largest American
Speaker 1: banks will have to meet stricter capital minimums in their
Speaker 1: annual Federal Reserve stress tests, while regional lenders will get
Speaker 1: some relief. He was interviewed this morning on Bloomberg Television.
Speaker 1: We need to have those eight most systemically important institutions
Speaker 1: more resilient than other banks in the economy. You know,
Speaker 1: you can have a you can have a smaller bank
Speaker 1: fail and the economy can absorb that. But with the
Speaker 1: largest institutions, obviously there's much more of a systemic risk,
Speaker 1: and we need to achieve that in a post stress
Speaker 1: environment as well as in a pre stress environment. Mario
Speaker 1: drag has unveiled largely unchanged inflation forecast for the Eurozone,
Speaker 1: even as its latest stimulus measures start to take effect.
Speaker 1: He's also calling on governments to play a bigger role
Speaker 1: in cementing the region's pick up. The European Central Bank
Speaker 1: presidents spoke with reporters today in Vienna. Also in Vienna
Speaker 1: today we had that OPEC meeting. Crude oil up now
Speaker 1: by four cents forty nine oh five for a barrel
Speaker 1: of West Texas Intermediate, up by point one percent, Bran
Speaker 1: Crew seven up three tenths of one percent. Natural gas
Speaker 1: also advancing up seven tenths of one percent. Gold to
Speaker 1: out a dollar thirty the ounce to twelve thirteen, a
Speaker 1: drop of point one percent, and a three thirty two
Speaker 1: on Wall Street. Now, let's take a look at other
Speaker 1: news from around the world. Thank you Charlie from the
Speaker 1: Bloomberg newsrou My Rami in essentio. This news update is
Speaker 1: brought to you by the Jeep Grand Cherokee, the most
Speaker 1: awarded sub ever. The Grand Cherokee continues to raise the
Speaker 1: bar with its luxurious interior and legendary four by four capability.
Speaker 1: Try when at your local Jeep dealer today. Some progress
Speaker 1: is being reported in the war against terrorism. The State
Speaker 1: Department's Acting Coordinator for counter Terrorism, Justin Siberal, announced today
Speaker 1: the Department's annual report on Terrorism finds a decline in attacks. However,
Speaker 1: the report also warns Islamic State expanded its reach, and
Speaker 1: Iran remains a leading state sponsor of terrorism. Total number
Speaker 1: of terrorist attacks in decreased by percent when compared to
Speaker 1: total fatalities due to terrorist attacks decreased by fourteen percent,
Speaker 1: principally as a result of fewer attacks and deaths in Iraq, Pakistan,
Speaker 1: and Nigeria. The aid who handled Hillary Clinton's private email
Speaker 1: server while she was Secretary of State will not testify
Speaker 1: in an email related lawsuit. Brian Pagliano will refuse to
Speaker 1: testify in a lawsuit brought by the conservative watchdog group
Speaker 1: Judicial Watch. The deposition is on Monday, just one day
Speaker 1: before California's primary rivers in Europe have burst their banks
Speaker 1: from Paris to the southern German state of Bavaria, killing
Speaker 1: six people, trapping thousands more in homes or cars, and
Speaker 1: forcing everything from subway lines to castles to shut down.
Speaker 1: The Louver in Paris will close Fridays as staff can
Speaker 1: move works of our from areas that are at risk
Speaker 1: of high waters. And the New York City Fire School
Speaker 1: is being renamed after a firefighter who was killed in
Speaker 1: the September eleventh terror attacks. Captain Vernon Richard died in
Speaker 1: the South Tower along with five other members of his company,
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Speaker 1: pass along the Air Force as a thunderbird jet has
Speaker 1: crashed after a flyover of the Academy Air Force Academy
Speaker 1: commencement attended by President Obama. We are brought to you
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Speaker 1: That's I N S I T E dot Com. I'm
Speaker 1: Charlie Pellock. That's a bloom Bird business slash. You're listening
Speaker 1: to taking Stock with Kathleen Hayes and Pim Fox on
Speaker 1: Bloomberg Radio. Do you get tired of driving out to
Speaker 1: a place like Costco or Sam's Club to stock up
Speaker 1: on big, bulky items like well, paper towels. I go
Speaker 1: through a lot of paper towels. Would you like it
Speaker 1: if you could just, you know, go online and order
Speaker 1: those and have them come to your house for free. Well,
Speaker 1: that is the business model for Boxed Boxed Wholesale, and
Speaker 1: they're doing quite well, growing very rapidly. In fact, they've
Speaker 1: raised a hundred and fifty million dollars in funding to date.
Speaker 1: And imagine that just a couple of years ago, the
Speaker 1: founder and CEO was in his garage in Edison, New Jersey,
Speaker 1: just getting it off the ground. And that's Shay Wong.
Speaker 1: He is uh with me in our New York studio. Now,
Speaker 1: thank you very much for having me and and everything
Speaker 1: you just said. Literally that was the problem that we
Speaker 1: had in my family. And so that's what I want
Speaker 1: to do and solve the problem for myself and luckily
Speaker 1: a lot of Americans around the country have the same problem.
Speaker 1: So there you were tell us about that. You you
Speaker 1: were saying, gosh, I I mean, I actually kind of
Speaker 1: like going to place like Costco Sam's Club sometimes you
Speaker 1: walk around and you know, but I know a lot
Speaker 1: of people find it tedious. Yeah, I mean, you know,
Speaker 1: it really is for some of the folks that literally
Speaker 1: don't have the physical means too. So you figure folks
Speaker 1: that live in urban areas without a car, or if
Speaker 1: you're later on in life and you just can't get
Speaker 1: out of the house anymore. And so that's an audience
Speaker 1: for us. Also, people in the suburbs, you find that
Speaker 1: they don't have the time or the patients to go. Yeah,
Speaker 1: they have a car and they live in Texas, they
Speaker 1: can get to a Sam's Club, but they just don't
Speaker 1: have the time and patience with three kids to go
Speaker 1: in store. So did you ever think to yourself, oh, gosh,
Speaker 1: there's already Amazon, and then there's Jet you know, another
Speaker 1: East Coast competitor of Amazon to a certain extent, What
Speaker 1: made you think you get boxed off the ground? I thought, um, one,
Speaker 1: that that because it was solving a problem that I
Speaker 1: had that I looked around at what were my options
Speaker 1: as a consumed were and none of them were, like
Speaker 1: my kind of needs weren't exactly met, and so I
Speaker 1: thought there was there was definitely an opportunity there. But
Speaker 1: more so we knew from a business perspective we had
Speaker 1: to go with a different model. And so for us, UM,
Speaker 1: we don't have everything. We're very clear with the consumer
Speaker 1: that we're not going to be the everything store, but
Speaker 1: we have a thousand items large format only, and you
Speaker 1: get to discover a few interesting items as well. So
Speaker 1: what else besides toilet paper and paper towels, which to
Speaker 1: me are obviously the fill the car very fast? You figure, laundry, detergent,
Speaker 1: water does really well, beverages, chips, snacks, and right now
Speaker 1: about fifty percent of our businesses foods, household so everything
Speaker 1: to fill your pantry. Basically, so you ship for free?
Speaker 1: Are you making money shipping for free? Yeah? So the
Speaker 1: beauty of it is that our average consumer, our consumer
Speaker 1: on average orders about ten items. And so as you know,
Speaker 1: if you think about the variable costs online, um, once
Speaker 1: you get to a certain part, like once you get
Speaker 1: to a certain items per per order count, the variable
Speaker 1: costs of shipping that box actually flatlines. And so if
Speaker 1: you're adding ten items per card, then you're actually making
Speaker 1: margin on it. Now you you're one of your most
Speaker 1: recent big, high profile investments, and a very powerful one
Speaker 1: is American Express and they had the card relationship with Costco,
Speaker 1: which Costco ended. So now American Express Ventures announced to one, Well,
Speaker 1: you did a hundred you did a big, big round
Speaker 1: of funding with them. How much was it? Yeah, so
Speaker 1: our last round was a hundred million dollars and then
Speaker 1: m X closed just recently as well. So what does
Speaker 1: that entail? What is that? What did it cost you
Speaker 1: to do that? And what is it? What is the benefit?
Speaker 1: What are you getting out of it? It cost me.
Speaker 1: Luckily they were very good to work with so it
Speaker 1: wasn't like we had to they ground us away in
Speaker 1: a in a long drawn out negotiations, So it didn't
Speaker 1: cost us a lot um. But in terms of working
Speaker 1: together and what we think about, you know, how we
Speaker 1: think about jointly driving our businesses going forward. And so
Speaker 1: they obviously have wholesale customers where you know, now UM
Speaker 1: American Express charting JU nineteenth I think will not be
Speaker 1: accepted in store. And so if you if your card
Speaker 1: is not accepted in store and you don't have any
Speaker 1: alternative next to you, you literally cannot use that card anymore.
Speaker 1: But more so than that, I think we're working on
Speaker 1: initiatives for the future. So for example, UM now UH
Speaker 1: our customers don't need or they can check in or
Speaker 1: or check out with just their American Express credentials for example,
Speaker 1: they're logg in UM. But a lot more coming coming
Speaker 1: UH in the future. Well, you have to talk about
Speaker 1: your your your your your program you have for employees
Speaker 1: where you pay for weddings. So I wanted to spell minuts.
Speaker 1: It's not like we sit around and just think, okay,
Speaker 1: what what else can we pay for? You know, I think, Um,
Speaker 1: what I found was that, Um, you know, coming from
Speaker 1: a technology background, UM, you deal with engineers, you deal
Speaker 1: with like just office folks all the time, where especially
Speaker 1: in Silicon Valley, if you're making less than a k,
Speaker 1: it seems like you're slimming it right like. But now
Speaker 1: we have fulfilming centers, Now we have a physical part
Speaker 1: of our business. It introduced us to a whole another
Speaker 1: kind of world, at least you know, when I grew up,
Speaker 1: I grew up poor. It reintroduced me to to another world.
Speaker 1: And so for us, we had a very specific problem
Speaker 1: in one of our fulfillment centers. One of our stalwart
Speaker 1: packers actually cried on the floor during work and we
Speaker 1: asked him. I called him later that night asked, hey,
Speaker 1: I heard this was happening. UM, what's going on? And
Speaker 1: so ended up that Um, he was paying his mother's
Speaker 1: medical bills uh, and wanted to pay for his wedding
Speaker 1: at the same time and so that his mother could
Speaker 1: go in time. UM, And that the match just wasn't
Speaker 1: working out, even though he's working seven days a week
Speaker 1: and two jobs. And so I just felt like, at
Speaker 1: least I can't control what happens in outside of our
Speaker 1: our walls, but at least in a company that I run, um,
Speaker 1: I want to be able to fix the things that
Speaker 1: are wrong. And you paid for sw wedding, and now
Speaker 1: you pay for all employees weddings. Right, Yeah, so I
Speaker 1: think you're a courage A lot of people get married.
Speaker 1: It is well, one one thing I'll add it. It's
Speaker 1: just it just really is the the the employer employee
Speaker 1: relationship and so and I know that's a big, big
Speaker 1: thing for you, for you. Chay Long, CEO, co founder
Speaker 1: Boxed Wholesale. Check it out. This is taking stock on
Speaker 1: Bloomberg Radio. The e c B meant of the e
Speaker 1: c B is going to stop buying corporate bonds. But
Speaker 1: there's a lot of doubt about how much any of
Speaker 1: this is really going to stimulate an economy where inflation
Speaker 1: still is not rising enough. That's coming up now on
Speaker 1: Bloomberg Radio.