Speaker 1: This is Bloomberg business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Speaker 2: This past week, politics Powell, and a pulse on the consumer.
Speaker 2: As we often do, we have our own takes on
Speaker 2: it all, plus a story on luminous lows and the
Speaker 2: rise of bathroom selfies that to come a bit later on.
Speaker 2: Coming up this hour, climate change, which popped up a
Speaker 2: little bit along the campaign trail and at the DNC
Speaker 2: the Democratic National Convention this past week. And while many
Speaker 2: talk about the role of evs in combating climate change,
Speaker 2: how about reving up on e revs plus checking out
Speaker 2: how we are all doing courtesy of a shopping basketful
Speaker 2: of retailer news, and from a member of the Bloomberg
Speaker 2: Business Week team, his personal with a freak diagnosis that
Speaker 2: led him on a trail to a better way. All
Speaker 2: of that to come. We begin with the DNC, which
Speaker 2: wrapped up this week with Vice President Kamala Harris officially
Speaker 2: accepting the Democratic nomination for president. Climate change came up
Speaker 2: a little bit among the many speakers, and while electric
Speaker 2: vehicles have long been considered as playing a big role
Speaker 2: on the path to a greener future, this past week
Speaker 2: Ford announced a further scaling back of its EV ambitions
Speaker 2: as it scrapped an all electric three to ROZW SUV,
Speaker 2: possibly costing the automaker as much as one point nine
Speaker 2: billion dollars in the process. Ford also postponed a next
Speaker 2: generation electric pickup and reduced spending on evs to thirty
Speaker 2: percent of CAPEX, down from about forty percent previously. However,
Speaker 2: Ford's CEO, Jim Farley, is particularly high on a type
Speaker 2: of hybrid it's called extended range Electric vehicles are erevs
Speaker 2: that have taken off in China. These are evs that
Speaker 2: also have a small internal combustion engine on board whose
Speaker 2: sole purpose is to automatic recharge the battery, and that
Speaker 2: gives them a whole lot of range. We're talking about
Speaker 2: more than six hundred miles on one charge compared with
Speaker 2: the typical three hundred sounds great, right and while Forge
Speaker 2: Jim Farley is keen on them right now. If you
Speaker 2: live in the United States, you can get them to
Speaker 2: understand why. My co host Tim Steneveek and I caught
Speaker 2: up with Keith Naughton, Bloomberg News Auto reporter.
Speaker 3: You know, a traditional hybrid, like the Toyota Prius that's
Speaker 3: been around for over twenty five years. It's primarily run
Speaker 3: by the internal combustion engine. That's what turns the wheels,
Speaker 3: and then the car's electrical system and breaking Kinnecticut. Energy
Speaker 3: from breaking recharges the battery that's also in a hybrid
Speaker 3: that supplements the internal combustion engine. But the driver in
Speaker 3: a traditional hybrid is still the internal combustion engine and
Speaker 3: the battery is sort of the backup. These extended range
Speaker 3: electric vehicles e rugs as they're known, kind of flipped
Speaker 3: the script on that they are primarily driven by the battery.
Speaker 3: They run on electricity about ninety five percent of the time.
Speaker 4: However, there is.
Speaker 3: A small internal combustion engine on board that is not
Speaker 3: connected to the wheels. It's only connected to the battery
Speaker 3: and it recharges the battery. So if you're driving on
Speaker 3: a long trip, you know, three hundred miles or more,
Speaker 3: you're going on your vacation, and you know the battery
Speaker 3: is running down, the internal combustion engine automatically clicks on
Speaker 3: and recharges the battery. You don't have to do anything,
Speaker 3: and you also don't have to stop at a roadside
Speaker 3: charging station and sit there for a half hour or
Speaker 3: more while it charges. So it extends your range, I
Speaker 3: mean up to seven hundred miles.
Speaker 2: This sounds like Okay, Holy Grail found this sounds brilliant,
Speaker 2: is it not.
Speaker 3: It is a very smart solution, and it especially addresses
Speaker 3: the things that have become roadblocks for pure electric vehicles.
Speaker 4: Range anxiety.
Speaker 3: We've all heard about range anxiety, right, that's a big
Speaker 3: issue in America. It's a big country with not all
Speaker 3: how to charging stations yet and price because these e
Speaker 3: revs don't require as big a battery because you have
Speaker 3: that internal combustion engine backup, so the battery is about
Speaker 3: half the size. Well, that lops four thousand dollars off
Speaker 3: the price of the car compared to a pure ev OK.
Speaker 5: Brilliant, brilliant, brilliant. Yeah, you might be excited about it,
Speaker 5: but I know some folks who aren't. The Sierra Club,
Speaker 5: for example, as you point out in your.
Speaker 2: Piece, so not so great for the environment.
Speaker 5: They're saying it doesn't go far enough.
Speaker 3: They want they want zero emission vehicles. They don't consider
Speaker 3: the Toyota Prius a green vehicle anymore. They believe that
Speaker 3: if you're not zero emission, you're not helping to solve
Speaker 3: climate change.
Speaker 4: Toyota, by the way, has a very different point of
Speaker 4: view on that.
Speaker 3: And you know, when you think about what goes on
Speaker 3: with these vehicles, they are mostly running in electric power.
Speaker 3: That means they actually emit fewer you know, global warming
Speaker 3: gases carbon dioxide than a Prius does.
Speaker 4: So you know it is no.
Speaker 3: It is not a pure ev not a zero emission vehicle,
Speaker 3: and that is the issue in Sierra Club has.
Speaker 4: But it goes a lot farther than traditional hybrids do.
Speaker 2: Right now, what is what are the emissions on the
Speaker 2: what are they called erevs, e reps? What are the
Speaker 2: emissions on them?
Speaker 3: Keith, Well, Carol, it kind of depends on how often
Speaker 3: that internal combustion engine goes on. How often you take
Speaker 3: a long enough trip to nearly drain the battery and
Speaker 3: the engine has to kick on.
Speaker 4: So that's pretty rare.
Speaker 3: I mean, what automakers tell us is, you know, the
Speaker 3: average you know, daily commute for Americans is under sixty miles.
Speaker 3: So you know, when you have a seven hundred mile
Speaker 3: range on your car, you're not going to get to
Speaker 3: that internal combustion engine need until deep into that range.
Speaker 3: So you know this, Jim Farley, the CEO of Bard
Speaker 3: Motor Companies, these cars are running on nine electricity, so yeah,
Speaker 3: you know that's far fewer commissions than you would get
Speaker 3: from a hundred.
Speaker 2: Hey, Keith, help me know what I'm doing right now
Speaker 2: better than what you are doing him right now?
Speaker 5: What my super real?
Speaker 4: Sure?
Speaker 2: Just saying same with me? Go ahead.
Speaker 5: Still got nowhere to charge in New York City, like
Speaker 5: you know, parking.
Speaker 6: On the streets.
Speaker 5: But that's it's a little bit of a niche issue
Speaker 5: that only affects New Yorkers, and New Yorkers normally have
Speaker 5: cars anyway.
Speaker 3: Addresses that, I know you have a question, but that
Speaker 3: would address that the city dwellers, the apartment dwellers who
Speaker 3: don't have a garage charger overnight, you know, they they
Speaker 3: don't have to be plugged in every night.
Speaker 5: I love it.
Speaker 4: Cars go for a very long distance.
Speaker 5: Before I ask you how I get one, which is
Speaker 5: a long answer because it involves many years moving. I'm
Speaker 5: curious about efficiency, and you know, when that gas motor
Speaker 5: does kick on to charge the battery. We think of
Speaker 5: efficiency when it comes to internal combustion engines. Here is
Speaker 5: miles per gallon. How many miles per gallon in battery
Speaker 5: life do you get when that gas engine kicks on
Speaker 5: to charge the battery.
Speaker 3: Yeah, I don't know the answer to that question, Tim,
Speaker 3: it's a good one, but again it's it depends on
Speaker 3: getting to that point where you need the gas engine
Speaker 3: to click on.
Speaker 4: I talked to one person for the story who was
Speaker 4: over in.
Speaker 3: China and wrote around with a friend who had an era,
Speaker 3: you know, for the entire time he was there, and
Speaker 3: they drove all over the place and the gas engine
Speaker 3: never came out.
Speaker 5: It's amazing.
Speaker 2: I think that's pretty cool.
Speaker 5: All right, So here's the question, Carol, hurry, because I
Speaker 5: got another one. How do you get one? You got
Speaker 5: to go to China for now, right.
Speaker 4: A moved to China.
Speaker 3: But but they are coming. The first one will arrive
Speaker 3: in the US next year is Stilantis, you know, the
Speaker 3: Chrysler parent company that also makes Jeep and Ram pickup trucks.
Speaker 3: As an E rev version of its Ram fifteen hundred
Speaker 3: pickup truck. They're going to call it the Ram Trucks.
Speaker 2: It is such a picker truck kind of exactly, no
Speaker 2: problem there, anyway, go ahead, good with the car seats
Speaker 2: to do for the kids.
Speaker 3: So Stilantis says, the RAM charger will have a driving
Speaker 3: range of six hundred and ninety miles, And they say
Speaker 3: it's being built in their words, to pull in an
Speaker 3: entire skeptical demographic into the electric age, because this seems
Speaker 3: to be the answer to mainstream buyers concerns about electric vehicles.
Speaker 2: You know what I love in your story. You say
Speaker 2: America's seat of the market for E revs to the Chinese,
Speaker 2: just as it did a decade ago with battery technology,
Speaker 2: which China now dominates. I just think about the mistakes
Speaker 2: that maybe we make as a country right in terms
Speaker 2: of thinking about the technology that we need to be
Speaker 2: focusing on. And I do wonder ken the US. Will
Speaker 2: the US catch up? Is this the way really forward?
Speaker 4: It's an excellent point. Carol.
Speaker 3: General Motors actually pioneered E revs fifteen years ago.
Speaker 4: With the Chevy Volt.
Speaker 3: I don't know if you remember this car, but it
Speaker 3: was a small sedan that ran primarily on battery power
Speaker 3: and had an onboard internal combustion engine to recharge the battery.
Speaker 3: They did that, it didn't sell that well. It was
Speaker 3: expensive to make, so they lost money on every car
Speaker 3: they sold, and they eventually pulled the plug in twenty
Speaker 3: nineteen as they were moving away from hybrid like vehicles
Speaker 3: and going to pure eves. GM's now bringing back plug
Speaker 3: in hybrids in twenty twenty seven, but they won't commit
Speaker 3: yet the same it's going to be an e rev
Speaker 3: so far only stillanthus even though Jim Farley, as I said,
Speaker 3: expressed all sorts of enthusiasm for e revs he has
Speaker 3: in a couple of different forms since he came back
Speaker 3: from a visit to China in the spring Ford doesn't
Speaker 3: have one.
Speaker 4: That they say is coming yet. Some of this could
Speaker 4: be related to regulation.
Speaker 3: It's not clear yet how the US regulators will treat it.
Speaker 3: It probably won't get the same kind of benefits that
Speaker 3: a pure electric vehicle will, you know, the seventy five hundred.
Speaker 4: Dollars tax credit and so forth.
Speaker 3: Yeah, so there's a little reluctance from US automakers to
Speaker 3: feel these things.
Speaker 2: Yeah, I do wonder though, something like this how it
Speaker 2: might move people to actually say, oh, I can get that.
Speaker 2: That makes more sense to me. Having said that, you
Speaker 2: understand this industry so well and the cycles and the
Speaker 2: challenges and the move that we've seen over the last
Speaker 2: few years into evs in a big way. Do you
Speaker 2: think this is what we will ultimately see all of
Speaker 2: the big American automakers focusing on. And maybe it takes
Speaker 2: a year or two, but this is maybe the root forward.
Speaker 3: It does seem like an ideal solution for America, where
Speaker 3: we have the most range, anxiety and these things. This
Speaker 3: technology works the best on the vehicles we love as
Speaker 3: shoe these and pickup trucks. It lowers their weight to
Speaker 3: extend their range. It just seems like a technology that
Speaker 3: would actually have a consumer pull instead of a regulatory push,
Speaker 3: which is what we've seen with so much green technology.
Speaker 3: Everyone I've spoken to about this technology are they're like, you, guys,
Speaker 3: how can I get one? You know, people are telling
Speaker 3: me about the story that yes, they've read about them,
Speaker 3: and they want to know where they can find one.
Speaker 3: So it just Jim probably calls it an in between solution,
Speaker 3: and it is.
Speaker 4: Maybe it's the bridge to the electric future.
Speaker 3: Whatever, But it seems like something that would resolve a
Speaker 3: lot of the issues that people have with electric vehicles
Speaker 3: but still get them to drive one and.
Speaker 2: Better than a hybrid in terms of impact on the environment.
Speaker 5: Yeah, So, Keith, if okay, we could get the RAM
Speaker 5: next year, potentially, when's Jim Farley at Ford going to
Speaker 5: have something out for us or is there a chance
Speaker 5: that we could get some of these Chinese vehicles in
Speaker 5: the US anytime soon?
Speaker 2: I think have you read headlines lately seen on an election.
Speaker 5: Also Keith's story and at the end he talks about this.
Speaker 6: Yeah.
Speaker 3: Yeah, so President Biden wants to put one hundred percent
Speaker 3: tariffs on Chinese evs, right, and i'm Chinese cars in general,
Speaker 3: and Donald Trump wants to be even tougher. So getting
Speaker 3: the Lee Auto L six or L nine that I
Speaker 3: that I cite in the story and have pictures of
Speaker 3: which do wonderful things beyond just having.
Speaker 4: This great range.
Speaker 3: Getting them here anytime soon not likely. So it's really
Speaker 3: up to the automakers in the United States. Not just
Speaker 3: the US automakers because that would just be g important
Speaker 3: testa right, but the automakers who operate in the United
Speaker 3: States to a Nissan, the Germans, you.
Speaker 4: Know all of them.
Speaker 3: And by the way, BMW had one too, called the
Speaker 3: I three that then they've stopped making.
Speaker 4: So they know how to do it. They just have
Speaker 4: to come back into the market with.
Speaker 2: All right, everybody for your barbecue this week in our
Speaker 2: next cocktail party, talk about e revs and read this
Speaker 2: unbelievable stuff.
Speaker 5: I love it, very cool.
Speaker 2: This to me sounds like answer all see you're buying
Speaker 2: that ram not and thank you so much. Bloomberg News
Speaker 2: Auto reporter Jenning us there into trick.
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Speaker 2: We got a patch of news from retailers this past week.
Speaker 2: Target ended a string of quarterly sales declines by focusing
Speaker 2: on cutting prices on essential goods, winning over inflation hit
Speaker 2: consumers who are pulling back from other retailers. Meanwhile, Macy's
Speaker 2: slightly missed analyst estimates for its quarterly revenue and load
Speaker 2: its outlook for sales during the rest of the year,
Speaker 2: citing increased discounting by competitors, and a more cautious consumer
Speaker 2: news too out of TJX and Walmart as well. For
Speaker 2: the roundup, Tim and I leaned on two members of
Speaker 2: the Bloomberg Intelligence team, Jen Bartashis, senior retail staples and
Speaker 2: packaged food analysts, and Mary Ross Gilbert, senior retail analyst.
Speaker 7: What Target has really done is they've honed their focus.
Speaker 7: They've listened to their customers. They've looked at waste, reduce
Speaker 7: prices and make things more affordable or offer more value
Speaker 7: to people. And they've mixed up their assortment. They've added
Speaker 7: new things, They've tried to make things fresh, new to
Speaker 7: appeal to those customers. And for the first time in
Speaker 7: several quarters, we're seeing positive traffic both in stores and online,
Speaker 7: and that sets them up for a strong second half
Speaker 7: of the year.
Speaker 2: So can we assume that they've kind of changed strategy
Speaker 2: or is this just whoa, we just got it right
Speaker 2: right now? How do we guarantee that this continues?
Speaker 6: Jen?
Speaker 2: You know, it's always like, all right, great, what are
Speaker 2: you gonna do for me next quarter? And the quarter after?
Speaker 7: Yeah, I think this is where actually one of the
Speaker 7: interesting divergences is where you see where Target is versus Macy's,
Speaker 7: which is not doing as well. Where you Target is
Speaker 7: pretty good at being quick to pivot and quick to
Speaker 7: implement strategy. And when you think about things more in
Speaker 7: the discretionary category, that takes a little bit of time
Speaker 7: to get the assortment in, get it designed, get it produced,
Speaker 7: get it in stores. And it's in stores now, and
Speaker 7: so you know, I think that what they've got in
Speaker 7: progress will last for at least another couple quarters. The question,
Speaker 7: as you said, Carl, is can they stay on top
Speaker 7: of whatever the consumer tastes changed to over the course
Speaker 7: of that time.
Speaker 5: Shrink this was an issue over the last couple of
Speaker 5: years for the company. I remember them citing Shrink for
Speaker 5: the reason to close stores in certain parts of the
Speaker 5: United States. There was some debate whether or not that
Speaker 5: was actually the reason. Putting that aside, what do we
Speaker 5: learn about Shrink in the most recent report, Well, Shrink.
Speaker 7: Is actually getting better.
Speaker 5: And this is the idea of stuff getting stolen or just.
Speaker 7: Disappearing right exactly. It's things that are either lost to
Speaker 7: theft primarily or through damage in the store. And so
Speaker 7: what you know, there's been a combination of new technology
Speaker 7: implemented at the front end when you're checking out to
Speaker 7: help make sure that people are being upront and honest
Speaker 7: when they're using self checkout, but also it's that the
Speaker 7: consumer is a little less frantic and that was leading
Speaker 7: to some of the theft issues that they were having. So
Speaker 7: a combination of those, they actually realized more benefit from
Speaker 7: a reduction shrink this quart than they expected. They should
Speaker 7: receive a little bit of benefit next quarter, but not
Speaker 7: nearly as much. So the benefits from that coming down
Speaker 7: is probably realized for the most part and will be
Speaker 7: less of a tailwind as we go through the rest
Speaker 7: of the year.
Speaker 2: All Right, So I think about Target and I feel
Speaker 2: like for such a long time they stood out as
Speaker 2: a retailer just you know, innovative, interesting, cool. Who is
Speaker 2: their customer? And I guess I want to I'm curious
Speaker 2: about that because how much that is tied to what
Speaker 2: goes on in the economy.
Speaker 7: Yeah, Historically Target's core customer has been sort of that
Speaker 7: middle income consumer, and you know, some of the higher
Speaker 7: part of the low income consumer as well, and you
Speaker 7: certainly had higher income households there, but the core was
Speaker 7: that middle income and so you know, what we've seen
Speaker 7: is that when Target refocuses on things like value, that
Speaker 7: resonates with that core consumer when they are you know,
Speaker 7: for example, for back to school, they were advertising five
Speaker 7: dollars backpacks, school supplies, you know, at a discount. Those
Speaker 7: are things that will help get their core customer excited
Speaker 7: and back in the store.
Speaker 5: Okay, the big everything taken together, and we're going to
Speaker 5: talk a little bit later about Macy's and about TJX.
Speaker 5: But taken together, what do the results tell us about
Speaker 5: the American consumer big picture?
Speaker 7: When you're looking at these retailers, whether it's Walmart from
Speaker 7: last week, Target today, you know, these retailers that are
Speaker 7: serving that middle income, lower income household, what they're seeing
Speaker 7: is that consumers are still spending, but they're being cautious
Speaker 7: about what they're spending on. They're making very careful decisions.
Speaker 7: And so as you've seen some prices come down, for example,
Speaker 7: we are seeing food inflation easing. We are seeing shelf
Speaker 7: prices come down for some items. That gives consumers a
Speaker 7: little bit more flexibility to perhaps get back into some
Speaker 7: of the more discretionary items. And you know, if you
Speaker 7: think about it, if you go to a fast food
Speaker 7: restaurant and it value me was fifteen dollars and you
Speaker 7: could spend that fifteen dollars or you could spend fifteen
Speaker 7: dollars getting two T shirts for your kids at Target.
Speaker 7: Those are the kinds of decisions that consumers are making,
Speaker 7: especially in that income bracket.
Speaker 2: Hey, one last question, Walmart getting rid of it? It's
Speaker 2: JD dot Com and China. How do we need to
Speaker 2: think about that?
Speaker 4: Well?
Speaker 7: I think this is a strategic exit for Walmart. You know,
Speaker 7: they traditionally will go into partnerships, learn a lot from
Speaker 7: their partners, learn how to do things themselves in it
Speaker 7: operating in a foreign market, and then take over that
Speaker 7: execution themselves. You know, I think when you're talking about China,
Speaker 7: a lot of retailers have become much more targeted in
Speaker 7: their strategy on how they're going to execute in that market.
Speaker 7: And to me, this exit from JD dot Com is
Speaker 7: really just an amplification of some of the policies and
Speaker 7: procedures and ideas that Walmart has had with their international business.
Speaker 2: All right, great stuff, as always, Jen, Thank you so much.
Speaker 2: Jen Bartasha, She's senior Retail Stables and Packaged Food Analysts
Speaker 2: for Bloomberg Intelligence.
Speaker 5: Okay, so target shares maybe surging, JD not so much,
Speaker 5: Macy's not so much. This after the company cut its
Speaker 5: net sales guidance for the full year. It's cited a
Speaker 5: more discriminating consumer and heightened promotional environment. Mary ross Gilbert
Speaker 5: is Bloomberg Intelligence a senior retail analyst. She joins us
Speaker 5: from Los Angeles. We have known that Macy's has been
Speaker 5: facing struggles for years at this point. What did we
Speaker 5: learn that investors did not like so much in the
Speaker 5: most recent quarter.
Speaker 8: Well, I think what investors didn't like so much is
Speaker 8: the fact that they missed their top line estimates. So
Speaker 8: they are looking for a sales decline, just not to
Speaker 8: the magnitude that they experience. So what that meant is
Speaker 8: that they're comp sales and we're really looking at just
Speaker 8: the go forward store base because they are planning to
Speaker 8: shutter one hundred and fifty locations. But those stores and
Speaker 8: their name plate were down over three percent on a
Speaker 8: comp basis. And the reason, look, Macy's face's secular challenges
Speaker 8: as an operator. They're less convenient because they're large department
Speaker 8: stores and they're facing the competition from more convenient and
Speaker 8: competitive shopping options. And this includes not only some of
Speaker 8: the specialty apparel retailers within the mall, but it also
Speaker 8: means that some of the more promotional or off price operators,
Speaker 8: such as a TJ Max.
Speaker 9: So when you just think about the overall.
Speaker 8: Competitive marketplace, but also you should note that Macy's is
Speaker 8: also very promotional. Almost every day they're advertising a promotion.
Speaker 8: And if you click on Macy's online and then you
Speaker 8: start to go away, it'll immediate flash, hell we'll We'll give.
Speaker 9: You twenty five percent off.
Speaker 8: They don't want you to leave, so they're doing what
Speaker 8: they can. But the one thing that we did see
Speaker 8: in their numbers is that this new initiative, which only
Speaker 8: began in the first quarter with the new CEO, Tony Spring,
Speaker 8: who came from Bloomingdale's and really right side of that business,
Speaker 8: what we did see is that the fifty new stores
Speaker 8: that they've enhanced, what did they do.
Speaker 9: They brought back service.
Speaker 8: Service has been absent from department stores for many, many years.
Speaker 9: They brought it back in these fifty stores.
Speaker 8: They enhanced the sortments, so that meant that they brought
Speaker 8: in new brands like Carl Lagerfeld Avec, Lemie, Donna, Karen
Speaker 8: and French Connection and that is growing sales. So their
Speaker 8: comp sales lifted one percent, out performing the rest of
Speaker 8: the Go Forward stores by four hundred and seventy basis points,
Speaker 8: so that's huge. The other thing they did those stores
Speaker 8: are brighter, they're cleaner, they have more modernized signing, and
Speaker 8: then of course they have sales people in handbags and shoes,
Speaker 8: in fitting rooms and in ready to wear for both
Speaker 8: men's and women's and that is really giving them the lift.
Speaker 8: The problem is is they need to move faster and
Speaker 8: they need to extend it across the rest of the
Speaker 8: Go forward stores in order to be successful. So I
Speaker 8: think what investors are not happy with it's not moving
Speaker 8: fast enough.
Speaker 2: So Mary, essentially, bottom line, Macy's has figured out kind
Speaker 2: of the secret sauce of what they need to do.
Speaker 2: They just got to kind of make up the batches
Speaker 2: and get it out to everybody. Is that's essentially they
Speaker 2: just have to move quicker, like they've figured it out.
Speaker 9: Yeah, Carol, I think they do.
Speaker 8: I think that's definitely what we're seeing in the first
Speaker 8: and second quarters with those or fifty stores turning in
Speaker 8: positive comps.
Speaker 9: That's certainly what it looks like.
Speaker 2: Yeah, because I always think about it. I mean, it's
Speaker 2: the same thing I asked Jen Bartashus about. You know,
Speaker 2: when it comes to Target, who is their customer? Who
Speaker 2: is the Macy's customer though, Like I do think about
Speaker 2: who's shopping at these places.
Speaker 8: Yeah, So I would say about half their customer base,
Speaker 8: or more than half their customer base, is probably earning
Speaker 8: less than seventy five thousand.
Speaker 9: So it's a household.
Speaker 8: Income that's being squeezed by inflation, and so that's leaving
Speaker 8: them with less discretionary income to spend on apparel. One
Speaker 8: thing that has turned out to be strong and is
Speaker 8: a good draw for them, of course, is cosmetics, and
Speaker 8: that's the reason why you've seen them expand the cosmetics
Speaker 8: presence in all of their stores.
Speaker 9: Every year, it seems like it's been expanded.
Speaker 5: And that's Blue Mercury, correct.
Speaker 8: Yeah, not all of the stores have Blue Mercury, but yes,
Speaker 8: that includes Blue Mercury, and of course blue Mercury, which
Speaker 8: is more upscale is also you know, it's a growing
Speaker 8: chain for them, and they delivered two percent positive comps
Speaker 8: in the quarter.
Speaker 2: So yes, love my lotions and from everywhere, and I'm
Speaker 2: sure you know investors love the margins when it comes
Speaker 2: to anything, whether it's perfumes or cosmetics. It's pretty crazy. Hey,
Speaker 2: the other thing I do love, I'm Carol Masser and
Speaker 2: I like going to TJ max companies. I'm just going
Speaker 2: to put it out there and it probably needs some interventions.
Speaker 2: But having said that, TJ Max, we also got some
Speaker 2: news from them. We got earnings and they also are
Speaker 2: taking a stake in a Mid East brand. What do
Speaker 2: we need to know about this one?
Speaker 8: Yeah, so because the company has really created this winning
Speaker 8: formula and what that means.
Speaker 9: Is there's years and years of knowledge and expertise.
Speaker 8: Plus they've made major investments in their people, so they
Speaker 8: have longevity with their employees. And you know this includes
Speaker 8: training buyers. It takes fourty five years, by the way
Speaker 8: to train a new buyer just to give you an idea.
Speaker 8: So with this expertise and as they have grown up
Speaker 8: through the ranks, this gives them an opportunity to continue
Speaker 8: to grow internationally. They have always had an interest in Mexico,
Speaker 8: so of course we saw that news after the first
Speaker 8: quarter in which they took an entered into a joint
Speaker 8: venture with groupo Asa, so.
Speaker 9: They're going to be able to use.
Speaker 8: This secret sauce in helping those businesses grow, which will
Speaker 8: make their investments flourish. And so the same thing is
Speaker 8: going to happen with this latest investment, which is a
Speaker 8: Dubai based company operating in the Middle East that operates
Speaker 8: about one hundred brands for less is the name of
Speaker 8: a store concept in that market.
Speaker 9: And could we see more?
Speaker 8: Absolutely, because this is a good use of their cash
Speaker 8: investing and being able to capitalize on their own expertise
Speaker 8: and allowing for some of these executives that they've groomed
Speaker 8: to be able to have a place to deploy their expertise.
Speaker 8: So yes, we're going to see more of that. And
Speaker 8: that just goes to show you that when you're looking
Speaker 8: at retail, off price is winning and TJX being the largest,
Speaker 8: it's a fifty six billion dollar global company, the only
Speaker 8: one that's global and off price and the only one
Speaker 8: that also has e coom our.
Speaker 2: Thanks to Jen Bartasha's Bloomberg Intelligence senior Retail Staples and
Speaker 2: Packaged food analyst, and Mary Ross Gilbert also the Bloomberg
Speaker 2: Intelligence team, She's senior retail analyst still ahead on Bloomberg
Speaker 2: Business Week, No easy way to say it. We've got
Speaker 2: a riveting story on the doctors that cut a giant
Speaker 2: tumor out of one of our colleagues head, which led
Speaker 2: him to investigate and ask is there a better way?
Speaker 2: That story's next? This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Listen live
Speaker 1: each weekday starting at two pm Easter on Apple car
Speaker 1: Play and Android Auto with the Bloomberg Business App. You
Speaker 1: can also listen live on Amazon Alexa from our flagship
Speaker 1: New York station. Just say Alexa play Bloomberg eleven five.
Speaker 5: Well you all know the expression it's not brain surgery, Well, Carol,
Speaker 5: sometimes it is just to ask our colleague Noah Bouhier,
Speaker 5: who just a bit over a year ago found himself
Speaker 5: on an operating table at the University of Washington as
Speaker 5: surgeons cut a long upside down you on a scalp,
Speaker 5: peeled back the skin, then made a great fruit sized
Speaker 5: opening in his skull through which they could remove a
Speaker 5: four centimeter wide tumor on the back of his head.
Speaker 2: No Boohire is Bloomberg News Data Investigations reporter. He joins
Speaker 2: us from our Seattle Bureau and for Bloomberg Business WEEKI
Speaker 2: rights not just about his experience, but also about a
Speaker 2: renowned neurosurgeons decades long quest to develop a better way
Speaker 2: to eradicate tumors. No, first of all, we are so
Speaker 2: glad you're okay and you're with us to talk about this,
Speaker 2: what you wrote about. We just can only imagine what
Speaker 2: that time was like. Before we get to talking about
Speaker 2: doctor Neil Cassel, and I hope I'm saying it correctly.
Speaker 2: Tell us about getting your diagnosis, kind of where you
Speaker 2: or what happened and and how you had to.
Speaker 4: Deal with it.
Speaker 10: Thank you for having me on. I mean, it was
Speaker 10: a rather surreal moment. I was actually traveling for work.
Speaker 10: I was in Nashville at a conference, and I took
Speaker 10: a break to go out for a jog one afternoon,
Speaker 10: and toward the end of my run, collapsed with a
Speaker 10: really large seizure on the downtown streets of Nashville. And
Speaker 10: when I came to I took a ride in an ambulance,
Speaker 10: got a CT scan, and that's when the doctors found
Speaker 10: this really large mass in the back of my.
Speaker 5: Head and the mass fortunately was not cancerous.
Speaker 6: Correct.
Speaker 10: Yeah, I mean if you were going to have a
Speaker 10: kind of brain tumor, this is the kind you wanted.
Speaker 10: The pathology later showed that it was extremely slow growing,
Speaker 10: hadn't metastasized, and frankly, this is the kind of thing
Speaker 10: that a neurosurgeon wants to see because they know they'll
Speaker 10: have a high rate of success if they go in
Speaker 10: there to resect it.
Speaker 5: We have quite a bit of time with you, so
Speaker 5: we're gonna sort of go in chronological order here. A
Speaker 5: little over a year ago you did find yourself on
Speaker 5: an operating table. Talk a little bit about the procedure
Speaker 5: and what you actually went through to have this mass removed.
Speaker 10: Yeah, I mean I think you hit the highlights in
Speaker 10: the intro to the segment. Apologies to folks who don't
Speaker 10: want to hear graphic stuff, but the basic operation is
Speaker 10: to make a large incision on your head. Surgeons peel
Speaker 10: back the skin, they cut through the bone, set the
Speaker 10: bone fragment aside, do what they need to do to
Speaker 10: access the airy. Then they reattached the section of bone
Speaker 10: kind of like a lid to a cookie jar, and
Speaker 10: then they stitch you back up. After this whole thing,
Speaker 10: you know, I spent a little bit of time in
Speaker 10: the hospital and then about six weeks at home recuperating,
Speaker 10: but ultimately, you know, within about six months I was
Speaker 10: back to many of my normal activities. I had to
Speaker 10: take a break from driving because of the seizure, but
Speaker 10: by and large, I'm doing what I used to do,
Speaker 10: so by all accounts, and I don't want to disparage
Speaker 10: the conventional surgery. It's incredible what the doctors can do.
Speaker 10: When you get down to it, it's still a rather
Speaker 10: intense process to have to go through, and that's really
Speaker 10: what led me to this story.
Speaker 5: That's exactly why we wanted you to explain what you
Speaker 5: went through, because what you spend the bulk of the
Speaker 5: story talking about is how there could be a solution
Speaker 5: on the horizon that would not require somebody to have
Speaker 5: a procedure as invasion, as invasive. Excuse me, as your
Speaker 5: procedure was tell us about what you learned about doctor
Speaker 5: Neil Cassel.
Speaker 10: Yeah, so I learned about doctor Cassell through actually an
Speaker 10: interesting connection. I've been on this show in the past,
Speaker 10: you all, I think many listeners know this, but I
Speaker 10: used to be the corporate reporter here covering Warren Buffett
Speaker 10: Berkshire Hathaway and more than a decade ago, I wrote
Speaker 10: a profile of a guy named Ted Weshler, who Buffett
Speaker 10: hired to be an investment manager at his company. And
Speaker 10: over the years, you know, I'd been following Weschler's career,
Speaker 10: and after my diagnosis, I happened to be speaking with
Speaker 10: him and I told him what was going on in
Speaker 10: my life, and he said, oh, you should really meet
Speaker 10: a friend of mine here in Charlottesville where he lives,
Speaker 10: named Neil Cassell. I was in the middle of a
Speaker 10: lot of stuff and I sort of blew Weschler off.
Speaker 10: But nine months later I was reading a news story
Speaker 10: and I saw doctor Cassell mentioned, and I thought to
Speaker 10: reach out to Weschler again, and I started learning about
Speaker 10: this foundation that it turns out Weshler had helped Cassell
Speaker 10: start with about a half a million dollars and then
Speaker 10: subsequently given many more more million dollars to this cause.
Speaker 10: And the thing you need to know about Cassel, I
Speaker 10: think he's a very interesting person is that when he
Speaker 10: was practicing neurosurgery, he was one of the co chairs
Speaker 10: of the department at the University of Virginia, and he
Speaker 10: was a really well known stroke doctor. He was the
Speaker 10: guy that was called in when President Joe Biden as
Speaker 10: a senator, needed two aneurism procedures. He was part of
Speaker 10: the team that operated on Biden. But over the years
Speaker 10: he was also really interested in innovative techniques, and about
Speaker 10: two decades ago he got really excited about the idea
Speaker 10: of using ultrasound as a way not as a diagnostic tool,
Speaker 10: but as something that could.
Speaker 6: Actually treat disease.
Speaker 10: And that's when he turned to Wessler set up this foundation,
Speaker 10: and their mission really is to develop new ways to
Speaker 10: augment and advance treatments for a whole host of really
Speaker 10: tricky diseases by using a bunch of effects that ultrasound
Speaker 10: can stimulate in the body.
Speaker 2: I have to say, I am a little obsessed with
Speaker 2: what happened and what you report on. And I'm sure
Speaker 2: you came across to a sixty minutes piece that was
Speaker 2: also about the use of ultrasound, and this was basically
Speaker 2: to open up a blood brain barrier to help drugs
Speaker 2: penetrate and help Alzheimer's patients, but also they talked about
Speaker 2: people with addictions. It just feels like all of a sudden,
Speaker 2: ultrasound is potentially having a moment.
Speaker 10: Yeah, I think it's getting more attention because they're starting
Speaker 10: to be some clinical trials that are yielding interesting results. Now,
Speaker 10: one of the things I wanted to mention here and
Speaker 10: when I went in I wanted to be skeptical, is
Speaker 10: because a lot of these studies and applications of ultrasound
Speaker 10: are still very very early stage. And I just want
Speaker 10: to make that clear to people because there's an interesting
Speaker 10: phenomenon that happens when people are pursuing novel medical technologies.
Speaker 10: There can be a burst of attention and enthusiasm when
Speaker 10: you have positive results out of these early stage studies,
Speaker 10: but as we all know, there are an enormous number
Speaker 10: of hurdles that you need to jump over, both regulatory
Speaker 10: and technical, to bring a treatment to the level where
Speaker 10: it's the standard of care. What I think is so
Speaker 10: fascinating about that is that in ultrasound more broadly, is
Speaker 10: that we're not talking about a single therapeutic. We're actually
Speaker 10: talking about a whole menu of mechanisms that could be
Speaker 10: helpful in delivering all sorts of drugs that we can't
Speaker 10: target to the brain for one reason another, there are also,
Speaker 10: you know, the main mechanism that ultrasound is being used
Speaker 10: for and reimbursed for around the world is about heating
Speaker 10: up parts of the body to basically non invasively sear
Speaker 10: a tumor or an area of the body that you
Speaker 10: want to destroy. But that's just one mechanism of action.
Speaker 10: Heat is one thing that you can deliver with ultrasound.
Speaker 10: Another thing you can do is create a swarm of
Speaker 10: bubbles that in a treatment area that essentially blends up
Speaker 10: like a blender an area of tissue that doctors want
Speaker 10: to target.
Speaker 5: Now, when it comes to bringing a new technology up
Speaker 5: to the standard of care, such as you describe, what's
Speaker 5: a way we can think about a timeline that if
Speaker 5: everything were to go according to plan, this would become available.
Speaker 10: Well, I think that's the really interesting thing here. So
Speaker 10: doctor Cassell has been for years saying that this. When
Speaker 10: he started out nearly twenty years ago, he thought this
Speaker 10: looked like MRI tech technology was thirty five years prior.
Speaker 10: Now we all know what MRIs are. Now so many
Speaker 10: people have had them. If you haven't had one, you
Speaker 10: know someone who has. So on that timeline, it would
Speaker 10: suggest that we'd have, you know, real treatments for some
Speaker 10: of these tricky diseases in the next fifteen twenty years.
Speaker 6: But I think it's going to be disease by disease.
Speaker 10: For some things. Ultrasound's going to work. For some things
Speaker 10: it's not. And one of the real tensions that I
Speaker 10: tried to get at in this story is the real
Speaker 10: need for optimism and enthusiasm if you're even going to
Speaker 10: go to the effort of trying to discover these new treatments.
Speaker 6: But also you know.
Speaker 10: The reality of science and getting things approved and becoming
Speaker 10: standard of care requires an enormous amount of evidence. It
Speaker 10: involves designing clinical trials that are going to prove beyond death,
Speaker 10: not just that something works and is safe, but at
Speaker 10: the end of the day, you want to know that
Speaker 10: it's cost effective.
Speaker 6: I mean, that's what the.
Speaker 10: Payers from medicare to private insurers are going to care about.
Speaker 2: What do you think though, No, our audience, you know,
Speaker 2: who are often looking for like the future trends. Right
Speaker 2: we talked about AI so much right now in the
Speaker 2: GLP one drugs, which are really have been a big
Speaker 2: kind of innovation, it feels like in certainly the pharmaceutical
Speaker 2: space and care in the health world. But how do
Speaker 2: you think our audience should be thinking about what you
Speaker 2: have found out about potentially what could come from ultrasound,
Speaker 2: minding you it could take a while.
Speaker 10: Yeah, Look, I think it's a space to watch. A
Speaker 10: lot of the dollars that are being invested right now
Speaker 10: are coming from private industry, but compared to other kinds
Speaker 10: of medical technology, it's a relatively small amount of money.
Speaker 10: But I think one thing to take note is that
Speaker 10: these aren't silver bullets in and of themselves. Think of
Speaker 10: ultra sound as one tool that might augment or advance
Speaker 10: other methods of attacking very difficult to care diseases.
Speaker 2: And can I ask you, is doctor Cassell the right
Speaker 2: messenger for all of this? He certainly, as you write
Speaker 2: your story, has been great in terms of networking and
Speaker 2: fundraising and is certainly out there.
Speaker 6: He's an interesting person.
Speaker 10: He's obviously got an incredible rolodex and been able to
Speaker 10: get some well healed people and prominent people involved in
Speaker 10: this effort, and I think that certainly has a place.
Speaker 10: Many of the people I spoke with said that he's
Speaker 10: been very important to this field and bringing it to prominence.
Speaker 10: But at the end of the day, he is a
Speaker 10: pretty complicated character. He's a very byzonic mission, a tough boss.
Speaker 10: I think, you know, folks who read the piece will
Speaker 10: get a pretty balanced view of who he is and
Speaker 10: what he's accomplished.
Speaker 2: Sounds like it's a little bit of a sense of
Speaker 2: humor considering how he ended the story. Can you just
Speaker 2: share with us what I sent.
Speaker 10: To your Yeah, not to be too much of a spoiler,
Speaker 10: but it does tie back to my own experience. So
Speaker 10: I had my one year check up and I'm doing great.
Speaker 10: The tumor's not back, but the place where it used
Speaker 10: to sat it sit, excuse me, has grown in size
Speaker 10: and it caused a brief moment of worry whether this
Speaker 10: was going to necessitate another surgery. And I called doctor
Speaker 10: Cassell to tell him about this, and he basically said,
Speaker 10: don't worry. If you're feeling fine, don't have other symptoms.
Speaker 6: Which you'll be. It's something to be admired.
Speaker 10: And he said if my editors were worried that I
Speaker 10: had a hole in my brain, that they should I
Speaker 10: should ask them how many other journalists we employ here
Speaker 10: at Bloomberg who only have half a brain.
Speaker 2: On that note, we're going to wrap it up. Listen,
Speaker 2: incredible reporting We're so glad though, that you are well.
Speaker 2: Thank you so much for sharing your story. No Boo
Speaker 2: hire his Data Investigation's reporter, killer reporter here at Bloomberg News,
Speaker 2: joining us from our Seattle bureau. The story is a
Speaker 2: mustere check it out at Bloomberg dot com and on
Speaker 2: the Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from two to five pm Easter Listen
Speaker 1: on Applecarplay and then Bright Auto with a Bloomberg Business app,
Speaker 1: or watch us live on YouTube.
Speaker 2: Let me inn our second hour of the weekend edition
Speaker 2: of Bloomberg Business Week, including how the US Congress is
Speaker 2: indirectly helping out the hotel business. Just ask the CEO
Speaker 2: of Wyndham Hotels and Resorts, which we did, and more,
Speaker 2: Plus the streaming wars, the race for content and leaning
Speaker 2: on influencers with the CEO of Dolphin Entertainment, and from
Speaker 2: what top exec strink to unwind after work to the
Speaker 2: bathroom selfie to j Powell? Are you listening? Because high
Speaker 2: interest rates negatively affected the sale of vintage cars. Our
Speaker 2: Bloomberg pre Suits team covering it all first up this hour.
Speaker 2: It's a content Crazy World. This past week, Edgar Bompin
Speaker 2: Junior raised his offer to take control of CBS parent
Speaker 2: Paramount Global to six billion dollars, according to a person
Speaker 2: familiar with his plans, topping his earlier proposal the week before.
Speaker 2: That's set off a potential bidding war meantime US domestic
Speaker 2: box office movies while they're still struggling to achieve pre
Speaker 2: pandemic revenue status. Our next guest is in the content
Speaker 2: and entertainment space in a kind of unique way. Bill
Speaker 2: Odoubt is the CEO of Dolphin Entertainment. It's a microcap
Speaker 2: entertainment marketing and content production company with a sixteen million
Speaker 2: dollar market capitalization. We begin with a little bit about
Speaker 2: what his company actually does well.
Speaker 11: We do three things all in one. We started as
Speaker 11: a production company film and TV producers, and we still
Speaker 11: do that, having dis released The Blue Angels with Imax
Speaker 11: this spring. Then we started assembling investing class pr and marketing,
Speaker 11: special events, influencer marketing companies around entertainment. And then we
Speaker 11: started investing in things that we could market like consumer products.
Speaker 12: So we're very excited for that.
Speaker 2: All right, So talk to us about the quarter and
Speaker 2: the business. Look back, look forward in terms of we
Speaker 2: mentioned the headline in terms of second quarter revenue, specifically
Speaker 2: in terms of a record that's according to you. Guys
Speaker 2: talked to us about a little bit of the business
Speaker 2: and where the growth is coming from, because you mentioned
Speaker 2: like kind of these three areas. So where's the growth been,
Speaker 2: where's it going?
Speaker 11: Yeah, Well, we've been blessed with a lot of organic growth.
Speaker 11: The companies work together create synergy between you know, creating
Speaker 11: campaigns for motion pictures or consumer products that may want
Speaker 11: both PR and influencer marketing as an example, or event
Speaker 11: marketing with influencer, let's say. And in addition, we're growing
Speaker 11: going back into production. The Blue Angels was a big
Speaker 11: hit for us in partnership with Imax, and that was
Speaker 11: certainly part of the revenue increase as well.
Speaker 2: Well, it's interesting, well and that Imax partner ship, how
Speaker 2: much more can you leverage out of it?
Speaker 1: Right?
Speaker 2: Like, this is something it sounds like it's got some
Speaker 2: legs and I'm curious where you take it?
Speaker 11: Sure, yeah, thank you. It's a multi year partnership. We're
Speaker 11: used to doing that with Dolphin. We were partners with
Speaker 11: Nickelodeon for years and years in making children's content and
Speaker 11: have had fifty to fifty partnerships in the past with
Speaker 11: Warners or others, So we hope to be doing documentaries
Speaker 11: with Imax for years to come. It's certainly a great
Speaker 11: partner to do documentaries with because you can do these
Speaker 11: big spectacle documentaries, dockbusters as we call them, that really
Speaker 11: deserve to be seen on the big screen, like The
Speaker 11: Blue Angels.
Speaker 2: Yeah, and we you know the press release that you
Speaker 2: guys put out it talked about, you know, debuting as
Speaker 2: number one on prime video over the Memorial Day holiday.
Speaker 2: It grossed what over two million at the box office IMAX,
Speaker 2: and that included a top ten debut with about one
Speaker 2: point four million in its opening week end. That what
Speaker 2: did you call it? Dockbusters?
Speaker 12: That's right?
Speaker 2: Yeah, So where else do you go with like do
Speaker 2: you just continue to do more of that? And how
Speaker 2: expensive is it to do and build out that content?
Speaker 11: Well, documentaries are less expensive than the bigger features, of course,
Speaker 11: so they typically range in the three to five million range,
Speaker 11: let's say for theatrical Obviously you can make them for
Speaker 11: less or more, and we do think there's an opening
Speaker 11: to do one or two of those a year. They
Speaker 11: certainly program well, there are gaps in the year where
Speaker 11: there wouldn't be studio content available or fresh studio content
Speaker 11: to put in dimacs. And also we think our partnership
Speaker 11: is expanding into live streaming as well. You know, we
Speaker 11: could do music specials, Broadway specials, comedy specials, you know,
Speaker 11: one night only type things that would really juice we
Speaker 11: hope the box office, especially midweek.
Speaker 2: When do you start to do something like that or
Speaker 2: what's involved in getting into that area more aggressively.
Speaker 11: We hope to launched that in the first quarter next year,
Speaker 11: and Imax has already been doing some of that themselves,
Speaker 11: and it's a natural extension of our partnership to go
Speaker 11: into that content together.
Speaker 2: What's the challenge in all of this, because I do
Speaker 2: feel like, you know, Bill, I think it's safe to
Speaker 2: say we cover this a lot at Bloomberg that I mean,
Speaker 2: there's a lot of places to view content, there's a
Speaker 2: lot of content creators, but there's a lot of people
Speaker 2: vuying for that content. So what's the stuff that really
Speaker 2: you think moves the needle in terms of engaging with
Speaker 2: the consumer, Because I know I get to a point
Speaker 2: where I'm just overwhelmed and I'm done, and I pick
Speaker 2: up a book and read. But I just wonder, right,
Speaker 2: you've got to kind of read through a lot of stuff.
Speaker 6: Sure to.
Speaker 11: And I like reading too, so I understand completely. And
Speaker 11: I think a lot of people try, and you know,
Speaker 11: thread the needle by thinking about what would work best
Speaker 11: in which type of delivery. You know, when you talk
Speaker 11: something like an IMAX system then and network, then you're
Speaker 11: talking you want that spectacle, something that warrants people coming
Speaker 11: out and spending the mon you know, on the smaller
Speaker 11: screen and the steep streaming wars, you're seeing a lot
Speaker 11: of people look for different types of content. And if
Speaker 11: you think about the last ten years, the rise of
Speaker 11: documentaries are true crime, especially on the small screen, has
Speaker 11: really exploded.
Speaker 2: What about you mentioned live sports, Broadway comedy other or
Speaker 2: you mentioned Broadway comedy. What about sports in terms of
Speaker 2: last streaming or is that just a too expensive, already
Speaker 2: crowded the big boys, the big guys are in it.
Speaker 11: I think the live certainly sporting events, it's probably crowded,
Speaker 11: and those rights only seem to be going up and
Speaker 11: up right, But we do like sports content generally quite
Speaker 11: a bit, and you're seeing a lot of opportunity this
Speaker 11: year around women's sports, and that's an area that we
Speaker 11: really like. We think female athletes have been underserved tremendously,
Speaker 11: and with our influencer marketing companies, we think we could
Speaker 11: expand and bring brand sponsorship deals and just generally income
Speaker 11: to female athletes from speaking engagements, et cetera.
Speaker 2: You mentioned the influencers, and I thought that was really interesting.
Speaker 2: I know you've got a relationship with Glow Lab. You
Speaker 2: are thinking about the younger audience. I mean, first of all,
Speaker 2: a couple things, what is your target audience or you
Speaker 2: don't care, you want to go all over the all
Speaker 2: over the kind of age spectrum.
Speaker 11: I think with influencer you can you can broaden out.
Speaker 11: We started with the core, which you know, female twenty
Speaker 11: five to forty four, let's say beauty, wellness, fashion products.
Speaker 11: But the thing about influencer marketing it's it's it's grown
Speaker 11: double digits year over year some years, I think triple
Speaker 11: digits simply because there is no one demo anymore. Yeah,
Speaker 11: and the marriage of influencer with sports is it was
Speaker 11: going to come anyway, but it's certainly accelerated three years
Speaker 11: ago with the Supreme Court ruling you know name image
Speaker 11: likeness for college athletes, and now this generation are influencers.
Speaker 11: This generation of athletes, right, you could just see Simone
Speaker 11: Biles taking selfies at the Olympics or get ready with
Speaker 11: any videos at the Olympics, and you know that if
Speaker 11: you're talking athletes fifteen to twenty five, they're digital natives
Speaker 11: for sure.
Speaker 2: Well, when you think about the work with influencers, as
Speaker 2: you said, I mean you also want to be what
Speaker 2: creating the products that they're involved in or talk to
Speaker 2: us about how you kind of drill down into that relationship,
Speaker 2: which I would assume that opens up even another revenue
Speaker 2: stream for you guys, it Shurret.
Speaker 12: Does, thank you.
Speaker 11: Yeah, it's really marrying a couple of different aspects of
Speaker 11: our business. You know, we financed and produced television and
Speaker 11: film for twenty years prior to going public. We're used
Speaker 11: to project finance, and then when you marry that with
Speaker 11: the rise of social media and influencer marketing, then it's
Speaker 11: really just applying project finance to consumer product. We could
Speaker 11: develop and bring to market consumer products where our form
Speaker 11: of marketing, especially in entertainment, will give us a better
Speaker 11: chance of success. So when you think about beauty cosmetics
Speaker 11: as an example. Those are products where influencers and celebrities
Speaker 11: have long influence success. And so we think there are
Speaker 11: certain product categories like alcohol, where the marketing of the
Speaker 11: product is as important as the manufacturing and the distribution itself.
Speaker 2: But it'd be great if you get a piece of both,
Speaker 2: right going forward?
Speaker 12: That's right, that's right, hey, Bill.
Speaker 2: One thing I did want to ask you when we
Speaker 2: were talking a little bit of nuts and bolts in
Speaker 2: terms of the quarter. You are a microcap company. We
Speaker 2: don't on Bloomberg talk a lot to companies that are
Speaker 2: below a buck, and I am curious what you get
Speaker 2: from investors. Stocks down about sixty percent year to date.
Speaker 2: What do you hear from your investors? And what are
Speaker 2: your aspirations? Is there something about you know? I understand
Speaker 2: sometimes we start small, we get bigger. What are your
Speaker 2: aspirations for this company? And what do you hear from
Speaker 2: your investors?
Speaker 12: Sure? Yeah, I know.
Speaker 11: While the microcap environment as a whole, as I'm sure
Speaker 11: you know, Carol has been had a tough year.
Speaker 6: Yep.
Speaker 11: We've posted record quarterly revenue three quarters in a row
Speaker 11: so and positive adjusted operating income.
Speaker 12: So we're we're hopeful and confident.
Speaker 11: That the will be rewarded in the market, especially as
Speaker 11: a microcup doing real revenue with real business.
Speaker 2: So is it just investors saying, listen, we get it,
Speaker 2: it's the environment, or what do they want to know
Speaker 2: about your business in particular? What are the questions you
Speaker 2: get most from investors?
Speaker 11: Yeah, I'd say it's mostly about the environment. You know,
Speaker 11: numbers don't lie in terms of what we're doing in
Speaker 11: revenue and adjusted operating income, and we're beating our own projections,
Speaker 11: including the analyst projections out there. So there's there's a
Speaker 11: sense of frustration with some that you know, they just
Speaker 11: wish that, you know, we weren't being lumped in with
Speaker 11: some of the others. But you know, we just have
Speaker 11: to stay the course. I mean, a micro cup that's
Speaker 11: doing fifty million revenue and a sixteen million dollar market cap,
Speaker 11: you'd like to believe that you're about to pop back.
Speaker 2: When you look at the environment, and I think it's
Speaker 2: you know, Bill, it's an interesting one. We're very focused on,
Speaker 2: you know, what's going on in terms of Fed policy,
Speaker 2: what's going on in terms of economic data. We talked
Speaker 2: a lot by the end of the week about a
Speaker 2: soft landing, and it looks like things are, you know,
Speaker 2: kind of working out fairly well, not all Americans certainly
Speaker 2: feel that. We talk a lot about the differences between
Speaker 2: the top and the bottom in terms of the economic strata.
Speaker 2: Having said that, when you look at the environment, you're
Speaker 2: doing deals, you're doing different things. How do you describe
Speaker 2: the US economy right now?
Speaker 11: Well, we're hopeful for the for the rate coaches. I
Speaker 11: think like a lot of people will free up cash
Speaker 11: and discretionary investment into the microcap world, small cap world generally, right.
Speaker 12: I think you hear a lot of people talk about that.
Speaker 11: We're not as susceptible to some other companies in terms
Speaker 11: of the interest rates. We've fixed ours in commercial paper already,
Speaker 11: so we feel good about our position. But certainly lower
Speaker 11: interest rates or lower federates would certainly benefit the microcap
Speaker 11: world for sure.
Speaker 2: All right, Yeah, No, we talked about that actually earlier
Speaker 2: in terms of small caps and the importance of economic
Speaker 2: growth as well as in terms of the interest rate environment, bigger,
Speaker 2: broader picture. We spent a lot of time talking about
Speaker 2: kind of what happens to some of the big media players.
Speaker 2: We talk about streaming so much. You are in the
Speaker 2: content business. What do you make of all of what's
Speaker 2: going on in the streaming world. It's a lot of
Speaker 2: competition for all of our eyeballs, and there are obviously
Speaker 2: some very clear winners and some that are having a
Speaker 2: tougher time.
Speaker 11: Yeah, and we're blessed where our film and television PR
Speaker 11: firm forty two West, works with almost every major streamer
Speaker 11: out there, and we promote shows on so many different platforms,
Speaker 11: from Netflix to Amazon to.
Speaker 12: Hulu and Paramount Plus, etc. So we see a.
Speaker 11: Lot of them contracting some in terms of investment, as
Speaker 11: I'm sure you've talked about quite a bit. But the
Speaker 11: sheer vol of programming the last few years has been
Speaker 11: overwhelming to a lot of consumers, I think, And probably
Speaker 11: this is for the best.
Speaker 2: And so you don't care kind of who wins because
Speaker 2: you get to work with them, all right, that's fair
Speaker 2: to say. But I wonder do you think that there
Speaker 2: will be because you do see some that might be
Speaker 2: struggling or slowing down a little bit, that there'll be
Speaker 2: some kind of shakeout.
Speaker 11: And there has to be a one would think, you know,
Speaker 11: And certainly the conversations out there about M and A
Speaker 11: among some of you in the bigger studios, right, isn't
Speaker 11: idle speculation, So there'll be a right sizing of the ship,
Speaker 11: I think, and the industry hopefully will be stronger for it.
Speaker 2: So what's kind of interesting when you look at the
Speaker 2: content and media world and you look out. You know,
Speaker 2: we talked a little bit earlier about influencers and your
Speaker 2: work with Glow Lab, and it is interesting in a
Speaker 2: week where again you know Warren Buffett, you know, we
Speaker 2: saw his stake in Olda Beauty. We talked about it
Speaker 2: through the pandemic and out of the pandemic that whether
Speaker 2: it was Spoor or some of the other names that
Speaker 2: you know, people spend. It's not just cosmetics, it's all
Speaker 2: kinds of beauty and you know, skincare and so on and
Speaker 2: so forth. That that spending kind of continues. You guys
Speaker 2: also work with Rachel Ray, So chefs are something that's
Speaker 2: certainly on your radar when you think about growth areas
Speaker 2: for content. If you had to whittle it down to
Speaker 2: one thing, what would it be. There's also AI, right,
Speaker 2: so the creation of whatever that content will be.
Speaker 11: Yeah, and AI is unstoppable, right, we take a positive
Speaker 11: spin on it, certainly but well, I think when you
Speaker 11: take a step back and you think the world before
Speaker 11: and after the rise of social media, you can make
Speaker 11: a case that what it's done through the explosion of
Speaker 11: what used to be Remember when it was mommy, bloggers,
Speaker 11: and then it became influencers and now it's creators. You
Speaker 11: could make an argument that's democratized the ability to launch
Speaker 11: certain types of consumer products. Early in my career, you
Speaker 11: would need, you know, tens of millions of dollars of
Speaker 11: pay in media to just get awareness of the US consumer. Today,
Speaker 11: you've got influencers launching their own skincare products and selling
Speaker 11: the companies three years later for over three hundred million dollars,
Speaker 11: as Susan Yarra and Glow Lab did with Notarium to
Speaker 11: helf Beauty. So you know that that's unfathomable, you know,
Speaker 11: fifteen years ago, ten years ago. So we see a
Speaker 11: lot of potential using influencer marketing and pr earned media
Speaker 11: generally to launch and content on those channels to to
Speaker 11: be able to drive traffic. That's on the consumer products side,
Speaker 11: of course, on the on the pure content side, I
Speaker 11: think it raised a lot of eyebrows in the last
Speaker 11: week or two. You know that on television sets, YouTube
Speaker 11: gets more viewing than Netflix, and and I think that
Speaker 11: that raised a lot of awareness, you know, outside of
Speaker 11: our world, just how big social media is to to
Speaker 11: all demographics and not just you know.
Speaker 2: The ya listen, right now you are on YouTube. We
Speaker 2: don't get to see your face right now you're on
Speaker 2: the phone, but if you were on Zoom and so
Speaker 2: on and so forth. I mean, right now, simmilcast on radio,
Speaker 2: we're on YouTube, and we're on our streaming service, and
Speaker 2: then earlier we're also on television. So it's just interesting,
Speaker 2: like the different venues. I watch a lot of YouTube channels.
Speaker 2: There's some interesting stuff, very niche programming. If you had
Speaker 2: to pick one with our YouTube TikTok or some kind
Speaker 2: of delivery service that you think is really going to
Speaker 2: be or continue to be the most influential, and just
Speaker 2: got about twenty seconds, what would it be?
Speaker 12: YouTube?
Speaker 2: Hands down, hands out, hands down.
Speaker 11: It can do both short and long form, and it's
Speaker 11: already got the mass.
Speaker 2: All right, great stuff as always, listen, Thank you so much.
Speaker 2: Jillo doubt He's founder and chief executive officer of Dolphin Entertainment,
Speaker 2: joining us on this Friday in Miami.
Speaker 1: You're listening to the Bloomberg Business Week podcast live each
Speaker 1: weekdays starting at two pm Eastern on applecar Play and
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Speaker 1: listen live on Amazon Alexa from our flagship New York station,
Speaker 1: Just Say Alexa playing Bloomberg eleven thirty.
Speaker 2: Window Hotels and Resorts has some twenty five brands in
Speaker 2: about ninety five countries and ninety one hundred plus hotels,
Speaker 2: and this past week and opened up another one, the
Speaker 2: Echo Suite's Extended Stay by Wyndham Dallas, Plano, Frisco, the
Speaker 2: second extended state Echo property to open in the United States.
Speaker 2: With more on that, and I'll look at the Leisure
Speaker 2: and Business Traveler, My co host Tim Steneveek and I
Speaker 2: checked in with the President CEO of Wyndham Hotels and Resorts,
Speaker 2: Jeff Bollotti.
Speaker 13: This is the first hotel that a developer of my
Speaker 13: name of Ian McClure of Gulf Coast Hospitality based here
Speaker 13: in Texas, Texas, a very important state for US. He's
Speaker 13: building twenty five of these Echo Suites by Window.
Speaker 14: The demand for this type of products incredible.
Speaker 13: It's a very comfortable reveit it's our fastest growing brand
Speaker 13: because of the demand that's out there.
Speaker 2: Well, tell us about that, why it is your fastest
Speaker 2: growing and what is the demand specifically, who wants to
Speaker 2: stay there, Who's demanding like, hey, we need these kind
Speaker 2: of places.
Speaker 13: Gosh, last month I was sleeping up out in Spartanburg,
Speaker 13: South Carolina, where Spartanburg has received a billion of the
Speaker 13: nine billion that that state, that single state has been
Speaker 13: awarded of this want so far, of this one point
Speaker 13: five trillion dollar piece of legislation, the most historic piece
Speaker 13: of legislation this country's ever seen. There are one point
Speaker 13: eight million companies that are contracting. They're workers for projects
Speaker 13: that are now just beginning to get started, and they're
Speaker 13: looking for this type of affordable, clean economy accommodation to.
Speaker 14: Put them in. I mean here in Plano, perfect example.
Speaker 13: There is so much development going on around the community
Speaker 13: here that I'm in today and that i'll be this
Speaker 13: evening with developers looking to build more and other brands
Speaker 13: from a medical profession, from the automotive profession, and a
Speaker 13: litany of projects that haven't yet begun that are going
Speaker 13: to begin soon. And companies are out contracting right now
Speaker 13: for lodging accommodations like this. It's it really is. It's
Speaker 13: it's an amazing I've been in this industry for thirty years.
Speaker 14: I've never seen anything quite like it.
Speaker 2: It's really fascinating. I'm just kind of going back to
Speaker 2: what you kind of kicked off with. So you're talking
Speaker 2: about the spending bills and the legislation that's come out
Speaker 2: of the US Congress, and that is really shaping kind
Speaker 2: of where you develop exactly.
Speaker 13: I mean, our teams have identified about four thousand of
Speaker 13: the forty thousand projects that will be funded by the
Speaker 13: one point five trillion dollar bill and the two hundred
Speaker 13: and fifty billion dollar Chips Act bill, those Chip Acts build.
Speaker 14: That bill has has.
Speaker 13: Begun funding projects in a here in Texas as well.
Speaker 14: We have this this is our six hundred and ninety
Speaker 14: first hotel that we've opened as a company.
Speaker 13: But in Taylor, Texas, Samsung is building a plant, a
Speaker 13: chip plant where they will spend seventeen billion dollars over
Speaker 13: the next ten years. And they have thousands of workers
Speaker 13: right now who are looking for long term lodging accommodation.
Speaker 13: They're checking in for five, six, seven months, some are
Speaker 13: checking in for over a year. Many are from other
Speaker 13: parts of Texas and driving home on the weekends.
Speaker 14: But they want a.
Speaker 13: Place that they could cook, put their dishes in a
Speaker 13: full sized dishwasher, having full sized refrigerator, and in a
Speaker 13: great microwave. They want a place that feels like home.
Speaker 13: And and that's what's that's what's fuel and Carroll demand.
Speaker 5: You know, what does it feel like? Waterville, Maine, Jeff,
Speaker 5: which is I'm just now learning where you and I
Speaker 5: both went to college, a small school called Colby, where
Speaker 5: we found ourselves freezing pretty much November through April every year,
Speaker 5: hold up in our dorm rooms playing beer pong because
Speaker 5: it was so cold. And main it's main.
Speaker 14: I know, Tim.
Speaker 13: I don't know if you've been back to Waterville lately,
Speaker 13: but it has been transformed. The development that's going on
Speaker 13: in downtown Waterville is really.
Speaker 14: Impressive to see.
Speaker 13: And I was thinking to myself, Fine'm smiling so lively
Speaker 13: that Waterville needs an echo sweets extended, say by windhow
Speaker 13: because we would kill it in that market, as you know,
Speaker 13: with parents who did not have the logic accommodation. So
Speaker 13: when we were there that are available today on the
Speaker 13: new construction round.
Speaker 5: Yeah, just so everybody knows. It's an old milltown that,
Speaker 5: like many mill towns in New England, had fallen on
Speaker 5: hard times years ago. The college and the hospital, at
Speaker 5: least when I was there in Waterville Main were the
Speaker 5: biggest employers, and you can see it. But since I've
Speaker 5: been there, I graduated close to twenty years ago, and
Speaker 5: there's incredible development in the area, really a revitalization of downtown.
Speaker 2: All right. So I'm curious though, so exciting growth development,
Speaker 2: but what happens I don't know when the money kind
Speaker 2: of runs out in terms of the development from like legislation.
Speaker 2: Do you worry about that you won't have the people
Speaker 2: who will be demanding these kind of rooms in Plano,
Speaker 2: Texas or elsewhere throughout the.
Speaker 13: State, Carol, That is a long time away. I mean
Speaker 13: we are in the very early innings. Less than twenty percent.
Speaker 13: I think the figure from the COB is less than
Speaker 13: seventeen percent of the one point five trillion has been allocated,
Speaker 13: and even a smaller percentage of that has been spent
Speaker 13: in terms of shovels on the ground.
Speaker 14: The projects that you and Tim are probably hearing about
Speaker 14: and reading about.
Speaker 13: I mean, you think about big projects in the New
Speaker 13: York area like the Hudson Town those projects are so
Speaker 13: far out there. This is certainly helping us from a
Speaker 13: demand standpoint, demand generation standpoint. I mentioned that we've identified
Speaker 13: four thousand of those forty thousand projects so far. Maybe
Speaker 13: there'll be thousands more that will be funded, but that
Speaker 13: is that is a long long way away. I'm not
Speaker 13: thinking that far out. It's at least ten years, and
Speaker 13: who knows in ten years what's to come in terms
Speaker 13: of new projects that could be could be funded. There
Speaker 13: is again just such a lack of demand for this
Speaker 13: type of extended day lodging product, and that's what has
Speaker 13: our two hundred and seventy developers who have signed contracts
Speaker 13: and been wanted territories to build this type of lodging
Speaker 13: so excited.
Speaker 2: So you don't ever say the word right now recession
Speaker 2: based on what you're seeing. Is that fair?
Speaker 14: Well?
Speaker 13: Look, I mean, our brands have always outperformed any economic downturn.
Speaker 14: They did after nine to eleven, they certainly.
Speaker 13: Did during the eight and nine Great Financial Crisis, and
Speaker 13: there was no better outperformance in the industry than the
Speaker 13: economy and mid scale lodging brands of Wyndham hotels and
Speaker 13: resorts throughout COVID.
Speaker 14: Our brands were the very first to recover.
Speaker 13: Our brands are known as Days and by Windom, Super
Speaker 13: eight by Windom, Lakita by Windom, very large systems of
Speaker 13: thousands of units in this country that have great brand recognition,
Speaker 13: where franchisees never had to close their hotels because they
Speaker 13: were able to break even at thirty percent occupancy.
Speaker 14: Where while we're a leisure based company and seventy percent
Speaker 14: of our.
Speaker 13: Business is relying on the leisure travel demand, which is
Speaker 13: still points still out there, that thirty percent that is
Speaker 13: non leisure is that essential everyday worker whose office is
Speaker 13: not a downtown office building that's been closed as it
Speaker 13: was throughout COVID, but whose office is the front seat
Speaker 13: of their construction.
Speaker 14: Or utility vehicle, or is one of my traveling.
Speaker 13: Nurse daughters who have to go to work that are
Speaker 13: in need accommodation during the week. Again, our brands have
Speaker 13: always outperformed in economic downturms. We're not seeing a recession
Speaker 13: to your point right now, and we're feeling very confident
Speaker 13: about the year ahead.
Speaker 5: Jeff, just remind everyone of Wyndom Hotels and Resorts business
Speaker 5: model are you one hundred percent franchise owned and operated
Speaker 5: i e. You guys actually don't own and operate any
Speaker 5: of the Windom resorts and hotels that people see exactly.
Speaker 13: Tim And that's what investors wanted to see when we
Speaker 13: went public five six years ago. They wanted to see
Speaker 13: a company that got out of the ownership game. We
Speaker 13: had to own hotels at that point in time, out
Speaker 13: of the management game, which we have. We are a
Speaker 13: one hundred percent franchise company. We're the world's largest hotel
Speaker 13: franchise company. We franchise about six thousand hotels here in
Speaker 13: the United States and another three thousand, two hundred and
Speaker 13: ninety five countries around the world.
Speaker 5: So it's it's it's less risky, right, oh, completely.
Speaker 14: You know, our business model is is extremely resilient.
Speaker 13: As we were talking about in the periods of downturns,
Speaker 13: we've actually been able to even in periods we're revenue
Speaker 13: per available room might generate more earnings for investors. We
Speaker 13: have we have many levers to pull.
Speaker 2: One thing I'm curious about and the levers, like you
Speaker 2: have lots of different brands and you hit at different
Speaker 2: you know, economic individuals or families or consumers, So I
Speaker 2: am curious about you know, I was looking at some
Speaker 2: of the bi research our our team does, and it
Speaker 2: talked about your US room base, including a larger percentage
Speaker 2: of lower price economy hotels and other lodging companies. You
Speaker 2: did though by American, American Inn and Lacinta la quinta
Speaker 2: excuse me, and that he like he dies. Sorry, sorry,
Speaker 2: You're right that that really helped boost your mid scale
Speaker 2: and upper mid scale presence UH and fee exposure. But
Speaker 2: I do wonder that you do have some exposure if
Speaker 2: there's a downturn, an economic downturn. So you sound upbeat.
Speaker 2: We talked about that before, but there is some exposure,
Speaker 2: right if especially the lower income consumer who continues to
Speaker 2: be squeezed, and we talk about that a lot here
Speaker 2: at Bloomberg.
Speaker 14: I think one of the biggest miss numbers is that
Speaker 14: our guest is low income. It is squarely middle class.
Speaker 13: When you look at the demographics of our guests, and
Speaker 13: those middle class income Americans who are staying at Thank
Speaker 13: You American or Lakita or Days In or Super eight
Speaker 13: are feeling better about life today than they were, certainly
Speaker 13: in the middle of COVID or pre COVID levels, and
Speaker 13: the consumer sentiment that we're seeing continues to improve.
Speaker 14: We look at many leading indicators.
Speaker 13: In terms of how we believe the consumer is feeling.
Speaker 13: Bookie windows continue to increase. People have reprioritized their vacations
Speaker 13: as to the very top of the list. They want
Speaker 13: to spend their disposable income on vacations more than on
Speaker 13: any other consumer spending. We're seeing longer lengths of day
Speaker 13: and certainly the ability for so many of our consumers
Speaker 13: to work remotely on a Monday and Friday is helping
Speaker 13: drive that trend. And we're seeing demand can continue to
Speaker 13: pick up after the normalization of that revenge travel that
Speaker 13: we all knew had to normalize. So we're seeing the
Speaker 13: start of we're not we're heading towards obviously Labor Day,
Speaker 13: but Memorial.
Speaker 14: Day was very strong.
Speaker 13: It was up four percent versus last Memorial Day here
Speaker 13: in the United States. July fourth, Triple A reported was
Speaker 13: up eight percent versus where it was versus last July
Speaker 13: for and we're expecting the same for Labor Day. So
Speaker 13: these middle income Americans want to travel. The number one
Speaker 13: preference for vacations in the United States of America is
Speaker 13: drived to, and ninety percent of our business is drived to.
Speaker 13: And these middle income travelers are with unemployment where it is,
Speaker 13: as we all know, more employed than they were, yeah,
Speaker 13: and most more savings in their bank accounts than they
Speaker 13: did pre COVID.
Speaker 5: So Jeff, help us understand. Help help us understand the segmentation,
Speaker 5: because Echo is for the you know, economy traveler, that's
Speaker 5: where where you are right.
Speaker 14: Now, and the economy business travel.
Speaker 5: Economy, business travel, okay, where really blue collar water Walk
Speaker 5: water Walk is upscale, more upscale, and then you have
Speaker 5: Hawthorn and mid scale. Give us sort of the price
Speaker 5: point for Echo versus water.
Speaker 13: Walk, Yeah, I mean price points look obviously are determined
Speaker 13: by the markets and the location they're they're in. But
Speaker 13: the Hope guests room I'm in tonight, we'll be checking
Speaker 13: guests in at an eighty dollars price point that water
Speaker 13: Walk average daily right might could be depending on the
Speaker 13: market double that. And sure we have but we have
Speaker 13: lots of aspirational Windoms, Windom Grands Skultcha.
Speaker 14: We have a new luxury brand.
Speaker 13: The Registry Collection, which might have a three or four
Speaker 13: hundred dollars handle to its average daily rate. But for
Speaker 13: that blue collar traveler who's staying at an Echo suites,
Speaker 13: it is by and large often being paid for by
Speaker 13: obviously their their employer.
Speaker 14: And also the demand for this type of product is
Speaker 14: being driven by how much transient motion there is out
Speaker 14: there in our country.
Speaker 13: For people looking for short term and meetium term and
Speaker 13: long term accommodations on the relocation front, given an act
Speaker 13: of housing in this country.
Speaker 2: Hey, one thing I want to do. What's cool is
Speaker 2: you guys are global your second quarter rev par so
Speaker 2: we're talking about revenue per available rooms, so key when
Speaker 2: we're talking about anybody in the hospitality industry. Second quarter
Speaker 2: red par was flat for the US, down two percent
Speaker 2: for economy, hotels up seven percent internationally, and you had
Speaker 2: a thirty seven percent gain in Latin America and fifteen
Speaker 2: percent in Europe and Middle East Africa. What can you
Speaker 2: tell us about kind of the globe lobo economy based
Speaker 2: on what you guys are seeing.
Speaker 13: The biggest trend for all of the lodging companies out
Speaker 13: there for the next quarter, the quarter ahead, and the
Speaker 13: year ahead is still there is a lot of occupancy
Speaker 13: still left to recover the occupancy tailwind really around the
Speaker 13: world with very few exceptions country by country still has
Speaker 13: room to grow, and so yes, international it was a
Speaker 13: big bright.
Speaker 4: Spot for US.
Speaker 13: Our international red park revenue per available room was up
Speaker 13: seven percent in the quarter versus the same time last year.
Speaker 13: And here where things normalized. Economy, as you pointed out,
Speaker 13: was down, but it was improving from where it was
Speaker 13: last year. Is things normalized and it was up in
Speaker 13: some of the other segments. There's great pricing power out there, Carol.
Speaker 13: I always remind investors that that pricing still hasn't caught
Speaker 13: up in the lodging industry to inflation.
Speaker 14: I think inflation's up something like twenty three to twenty
Speaker 14: four percent pre.
Speaker 13: COVID days, and our average daily rate is up over
Speaker 13: only seventeen percent. Our hotels are operated by small, mom
Speaker 13: and pop business owners who feel very confident about holding
Speaker 13: on to that advertrate the game during COVID and continuing
Speaker 13: to improve it, but at the same time building the
Speaker 13: business base of business on the book with a business
Speaker 13: transient that allows them in periods of demand to price up.
Speaker 2: Jeff, great to check in with. You really appreciate it.
Speaker 2: Jeff Blotti. He's the president CEO of Wyndom hotels and resorts,
Speaker 2: joining us from Play No Texas Jeff b. While you're
Speaker 2: listening and watching Bloomberg Business Week.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from two to five pm Eastern Listen
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Speaker 2: Fittit car collectors downshifting their spending. The c suite, drink
Speaker 2: of choice and marble tiled floor spread out like flower
Speaker 2: pedals while painted vines cascade from the ceiling over a
Speaker 2: glowing circular sinc. Yes, it's all in a bathroom, the
Speaker 2: perfect setting for a selfie. Yeah, all right, you're gonna
Speaker 2: find out about why. Yes, it's time for Bloomberg Pursuits
Speaker 2: and with us as the editor of Pursuits, Chris Rouser, Yeah,
Speaker 2: we got to start with this whole idea of selfiees.
Speaker 5: Carol, didn't you know?
Speaker 15: Didn't you know that the most important room in a
Speaker 15: restaurant these days is the bathroom? How did to explain?
Speaker 2: Explain?
Speaker 6: Please?
Speaker 15: Well, it's actually a crazy story. So Kate creator are
Speaker 15: amazing food editor in London, pitched this story.
Speaker 9: And were you like, did y'all know Okay, yes, she.
Speaker 15: And I always have this. My like number one bugaboo
Speaker 15: is when a restaurant bathroom doesn't have like an occupied
Speaker 15: vacant signal on it and you have to knock and
Speaker 15: then you can't hear anyway. So I like, we talk
Speaker 15: about restaurant bathrooms laws. And now that Instagram is such
Speaker 15: a big part of restaurant's success, and they're marketing because
Speaker 15: people take food selfies. They do the lighting in the
Speaker 15: restaurant so the food looks good in pictures. It obviously
Speaker 15: extended to Okay, people are in the bathroom, they take
Speaker 15: selfies in the mirror. The bathroom is actually a place
Speaker 15: where you can, for not a lot of money, express
Speaker 15: your design sensibility and your care for every small detail.
Speaker 15: So suddenly bathrooms are looking very cool and very shareable.
Speaker 15: And so David Rockwell, who is a very famous architect
Speaker 15: and he does restaurants and hotels and all sorts of
Speaker 15: cool stuff Broadway shows. A couple of years ago, he
Speaker 15: did a story with us where during the pandemic, he
Speaker 15: was like, we need to envision the restaurant of the future,
Speaker 15: Like what will restaurants be like now that you know,
Speaker 15: maybe we need to use outdoor spaces, maybe they need
Speaker 15: to sort of work more like twenty four hours a
Speaker 15: day rather than.
Speaker 6: Just at dinner.
Speaker 15: And one of his ideas in this schematic of our
Speaker 15: restaurant of the future was you walk into the restaurant
Speaker 15: and there's a hand washing station, Like the bathroom is
Speaker 15: kind of the first thing that you get to. So
Speaker 15: that was like an idea that we ran in Bloomba.
Speaker 2: I'm sorry, I do like that because, like some especially
Speaker 2: in the city, right, you just feel like you just
Speaker 2: walk outside a little bit and you're like, I want
Speaker 2: to wash.
Speaker 15: So now, when you get into Kogodoc, which is one
Speaker 15: of the most fabulous restaurants in New York City, it's
Speaker 15: so so cool you can't get in. It's this fried
Speaker 15: Korean chicken and champagne restaurant. The first thing that you
Speaker 15: see when you walk in is a hand washing station
Speaker 15: and it's got like Mez soaps, and it's very fancy,
Speaker 15: and it's got these great lighting mirrors for like selfies. Stunning,
Speaker 15: and that idea came from like working with us on
Speaker 15: that pursuit story and it's very cool. And anyway, all
Speaker 15: over the Europe the US Basstroum bathrooms are becoming very
Speaker 15: trendy and very share Yeah.
Speaker 2: It's not just a New York thing, right, It's like
Speaker 2: all over the place. First of all, though, you have
Speaker 2: to remind everybody, for those of you out there listening
Speaker 2: who want to do your own bathroom selfie, I mean
Speaker 2: how many I mean tons of people have done this,
Speaker 2: like millions.
Speaker 15: Oh yeah, I mean we yes, nine million bathroom shell
Speaker 15: hashtag bathroom selfie hashtags have been shared. We you know,
Speaker 15: there's one of our colleagues was in Georgia, Straccheria and
Speaker 15: Munich and sent me pictures of this disco ball bathroom.
Speaker 15: There's a roller rink slash restaurant in Brooklyn, of course,
Speaker 15: that has a DJ in the bathroom.
Speaker 6: It's called Club Flush.
Speaker 2: So listen, the DNC used a DJ like for the
Speaker 2: roll Call. Apparently DJs are finding themselves everywhere, all right.
Speaker 2: For executives who often travel around the globe, they have
Speaker 2: busy days. CEOs, you know, just like the rest of us,
Speaker 2: they've got unwind after work.
Speaker 1: Yeah.
Speaker 15: So in every issue of Business Week every month, we
Speaker 15: do a CEO diet where we ask a bunch of
Speaker 15: CEOs what they do for exercise, what they were to work,
Speaker 15: what they eat for breakfast, which we've talked about, and
Speaker 15: so this month we ask them what is their signature drink, like,
Speaker 15: what's their go to? And you know, I got to say,
Speaker 15: it's a lot of martinis.
Speaker 1: We got a lot.
Speaker 15: We couldn't run all the answers that we got people
Speaker 15: you couldn't be working. A lot of them were dirty martinis.
Speaker 15: But Jen Hymen, who's the Rent the Runway founder, she
Speaker 15: was like, you know, I love a spicy margarita, but
Speaker 15: on a cold, cozy Brooklyn day, I love a mescal
Speaker 15: and the groni and a groaning with mescal, which I
Speaker 15: think is great.
Speaker 1: Yeah.
Speaker 12: And we got some apparel sprits.
Speaker 2: Is uh aperol sprits?
Speaker 12: Yes?
Speaker 1: Yeah?
Speaker 2: And can I just say there was a lot of
Speaker 2: non alcoholic too the beverages, which I thought was interesting
Speaker 2: that did not Tim if Tim was here, because he's
Speaker 2: a huge non alcoholic dude.
Speaker 12: Yeah.
Speaker 15: Yeah, sort of like neotropic kind of drinks strengths that
Speaker 15: are sort of wellness oriented and have no alcohol. That
Speaker 15: was also popular.
Speaker 2: Yeah, exactly, kind of interesting. I really feel like, all right,
Speaker 2: can we get to you're a watch person, I mean
Speaker 2: you're you're a person of many interests, but I love watches.
Speaker 6: You love.
Speaker 2: This was just kind of a fun story. I do this,
Speaker 2: like I don't know about you. I've come off a
Speaker 2: plane and I see somebody wearing something in that like
Speaker 2: Alex stalk them like, hey, where'd you get that?
Speaker 15: Yeah, I'm the same. I will walk up to anybody
Speaker 15: and ask them about their watch.
Speaker 2: I know.
Speaker 6: And so for my watch.
Speaker 15: So I have a watch club, which is we do
Speaker 15: We have a newsletter and we have events and if
Speaker 15: you're a Bloomberg subscriber, you can be in our watch club.
Speaker 1: And so what do you do?
Speaker 10: Like, what do you like?
Speaker 2: Who do you contact or how do you reach out
Speaker 2: to you?
Speaker 6: No idea.
Speaker 15: There's a way if you google it, So we're going
Speaker 15: to do it. It's if you go to Bloomberg dot
Speaker 15: com slash accounts, slash newsletters, you'll see it, okay, or
Speaker 15: just Bloomberg dot com slash newsletters.
Speaker 12: I can't see it.
Speaker 15: But anyway, I was walking around and in summer, there's
Speaker 15: not a lot of new watches. Actually, because Europe goes
Speaker 15: on vacation, there's not a lot of new debuts. So
Speaker 15: I was kind of looking out for the watches that
Speaker 15: were in the wild, and I saw some really really
Speaker 15: cool ones walking around this neighborhood in New Manhattan. But
Speaker 15: also I ran into a guy who had a nineteen
Speaker 15: twenties Rolex on the on the boardwalk and Fire Island,
Speaker 15: and I he found it and he restored it, and
Speaker 15: I put it in the newsletter. My friends from Rolex
Speaker 15: were like, we've never even seen this watch.
Speaker 10: It's so cool.
Speaker 15: And the surprising watches also extended to the Olympics, where
Speaker 15: there were a crazy amount of watches. People running doing sprints,
Speaker 15: like competing in one hundred and eighty five thousand dollars.
Speaker 15: Reshard Meal watches. The guy who won the pole who
Speaker 15: like set the world record for pole vaulting arm and
Speaker 15: duplantis he broke his own record. He's broken his own
Speaker 15: record nine times. He was wearing a new Omega watch.
Speaker 15: Like Omega hadn't debuted this watch yet, and they're the
Speaker 15: way they debuted it was they put it on his
Speaker 15: wrist as he won the gold medal at the Olympics.
Speaker 15: First of all, why are you wearing anything extra? I
Speaker 15: don't care anybody, I don't care slow you down. And
Speaker 15: you know it's interesting so LVMH was like the sponsor
Speaker 15: of the Olympics in France, and there was a lot
Speaker 15: of like LVMH brands, and so the other brands mostly
Speaker 15: were like, this isn't our time. First of all, the
Speaker 15: Olympics is usually like a non sponsored event, right it
Speaker 15: used to be. And but some brands like Omega and
Speaker 15: Risharmeal were not afraid and they put their watches on Olympics,
Speaker 15: on Olympians in competition, which is crazy.
Speaker 2: I mean that's like killer advertising.
Speaker 15: I mean you couldn't I couldn't believe it when I
Speaker 15: watched it live with my daughter and I was like,
Speaker 15: oh my god, he's wearing a watch. I wonder what
Speaker 15: that watches.
Speaker 2: It's unbelievable. Hey, listen, just we're going to transition because
Speaker 2: I want to talk about a story that Hannah did
Speaker 2: Hannah Elliott real quickly though. There were some news this
Speaker 2: week about selbuying a minority steak in the Swiss watch
Speaker 2: brand n B and F.
Speaker 15: You know this brand, Yes, So Chanelle makes great watches,
Speaker 15: and not everyone knows that because you think of them
Speaker 15: as so they're leather goods their fashion, but they also
Speaker 15: have a great watch making tradition and to sort of
Speaker 15: improve their legacy in that field and their authority. They
Speaker 15: bought a twenty five percent steak in MB and F,
Speaker 15: which is a very cool, very avant garde watchman. They
Speaker 15: only make like four hundred, five hundred watches a year.
Speaker 15: They're really expensive. I own one that it was not
Speaker 15: really expensive that I entered a lot lot.
Speaker 2: We do into Chris's lives.
Speaker 15: I entered a lottery to be able to buy one
Speaker 15: of these watches because they're so they're like spaceships. We've
Speaker 15: talked about them before. They're really really crazy and I
Speaker 15: got their lowest price one and I only wear it
Speaker 15: on special occasions. But it's it's interesting that Chanelle.
Speaker 2: Dies see and just look at it and glaze her
Speaker 2: groove lands at it all right. Speaking of things that
Speaker 2: often have high prices though, vintage car sales, and we
Speaker 2: want to bring in kind of Elliott, who covers all
Speaker 2: things auto for us. She's our autocolumnist here at Pursuits.
Speaker 2: You're a member of your team. Yes, hey, Hanna, good
Speaker 2: to have you here. Tell us about the recent auctions
Speaker 2: at Monterey because it sounds like I love the headline
Speaker 2: on this vintage car sales getting freezer burn, what happened,
Speaker 2: and tell us about the environment, like who's there, what
Speaker 2: you usually see, and how it went down.
Speaker 16: You know, it was a really interesting year this year
Speaker 16: at the auctions week long totals clothes around three hundred
Speaker 16: and seventy million dollars across five auction houses, and that
Speaker 16: was down about eight percent from twenty twenty three. And
Speaker 16: it was well off, you know, like just after COVID
Speaker 16: and twenty twenty one and twenty two the auction numbers
Speaker 16: were like way up above four hundred and fifty million dollars.
Speaker 16: So it things are down, and that freezer burn term
Speaker 16: is really interesting. One of my sources used it because
Speaker 16: he was describing sort of the gloss of cars for
Speaker 16: sale that had already been for sale and had just
Speaker 16: sort of been defrosted and like let's try it again
Speaker 16: because they hadn't sold. And that kind of describes this
Speaker 16: market we're in right now, which is there are a
Speaker 16: lot of good cars out there and maybe too many
Speaker 16: good cars right now for how willing collectors are to buy.
Speaker 16: So you asked about what kind of people are at
Speaker 16: the auctions now. Of course, this is Monterey Car Week,
Speaker 16: This is like the Olympics of the car world that
Speaker 16: happened every August, and it's really it's global collectors. It's
Speaker 16: a lot of of course, we're talking vintage cars, but also,
Speaker 16: you know, vintage now includes cars from the nineties and
Speaker 16: two thousands, which kind of pays me to say because
Speaker 16: I'm a nineties child. But shows are considered vintage too now.
Speaker 16: So we have people buying, of course the old racing
Speaker 16: Ferraris and old world Royces and Alpha Romeos, but we
Speaker 16: also have people buying like Lamborghinis from the nineties and
Speaker 16: two thousands.
Speaker 9: So it's a mix.
Speaker 16: And what we saw was, yeah, maybe it's a I
Speaker 16: don't know what to say. No one was saying panic,
Speaker 16: but it's things are slowing down.
Speaker 15: It's an interesting time in this collectibles market across categories
Speaker 15: actually watches too, and and art obviously, and Hannah talked
Speaker 15: about this on her great podcast Hot Pursuit. People don't
Speaker 15: know what's going to happen with interest rates. Maybe now
Speaker 15: it's not the time. You know, even very very rich
Speaker 15: people are affected by interest rates when it comes to
Speaker 15: real estate and buying art and just lend it, borrowing
Speaker 15: and the way their money moves. And also people don't
Speaker 15: know what's going to happen after the election, and you know,
Speaker 15: like where are you going to put Hannah, I mean
Speaker 15: this point, like where are you gonna where're gonna put
Speaker 15: your money? What's what's the world going to look like
Speaker 15: where you're gonna live. Yeah, So it's a strange time
Speaker 15: at that high end of this collectibles market for sure.
Speaker 2: Yeah.
Speaker 16: And I would also say for cars too, just the
Speaker 16: geopolitical climate in Europe, does it affects how things are
Speaker 16: moving in Europe and there is a trickle down effect
Speaker 16: to how things are moving in the US. For instance,
Speaker 16: some of these cars, some of the big you know
Speaker 16: Ferraris and Alpha Romeos, those are actually cars that have
Speaker 16: lived most of their life in Europe. And if things
Speaker 16: aren't really moving right now in Europe because of obvious reasons,
Speaker 16: we've got some wars happening, that does have a trickle
Speaker 16: down effect to some of the sales in the US too.
Speaker 2: I really love too that you get into how it's
Speaker 2: kind of a transitional market for cars. I guess, you know,
Speaker 2: the really old, great vintage cars from the fifties and
Speaker 2: the sixties, but that some of the newer stuff actually
Speaker 2: is what is selling Is that kind of a fair takeaway.
Speaker 16: Yeah, that's a really fair takeaway. It's been really interesting
Speaker 16: to see. You know, we all remember when, you know,
Speaker 16: the air cooled porches on the sixties were quite hot
Speaker 16: a several years ago in particular, and even those are
Speaker 16: cooling off a little bit in favor of this new
Speaker 16: generation of buyer who wants something a little more drivable.
Speaker 16: Dare I say, something a little bit more modern? And
Speaker 16: you know, if you were a kid in the nineties, yeah,
Speaker 16: the poster on your wall was like maybe a Ferrari
Speaker 16: F fifty or maybe a Lamborghini Diablo. It wasn't an
Speaker 16: air cooled Portie or a Corvette or a Ferrari from
Speaker 16: the fifties. It was you know, you were lessing after
Speaker 16: the Italian exotics. So yeah, we are really right different.
Speaker 12: Oh my god.
Speaker 2: Well, you can read all about the specifics and what
Speaker 2: what did sell to in some of the numbers and
Speaker 2: go really through it. Just check out Hannah's column. You
Speaker 2: can find it on the Bloomberg and also Bloomberg dot
Speaker 2: com or thanks to Bloomberg News. Auto columnist Hannah Elliott
Speaker 2: also co hosts of the podcast Hot Pursuit and the
Speaker 2: editor of Bloomberg Pursuits as always our Chris Rouser, and
Speaker 2: that wraps up the weekend edition of Bloomberg Business Week
Speaker 2: from Bloomberg Radio. Thank you so much for joining us.
Speaker 2: And a quick programming note. If you're listening to us
Speaker 2: in Boston, our new home starting September third will be
Speaker 2: ninety two nine FM. That's the day after Labor Day.
Speaker 2: Once again, Bloomberg Radio moving to ninety two nine FM
Speaker 2: in Boston. I'm Carol Masser along with Tim Stanovick. Have
Speaker 2: a great and safe weekend everyone.
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