Speaker 1: Broadcasting live to New York, Bloomberg eleven to Washington, d C.
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Speaker 1: Dot Gone. This is taking Stock coming up on taking
Speaker 1: Stock broadcasting live from Elbow Beach, Bermuda, an ocean front
Speaker 1: enclave of classic style and contemporary luxury. We're going to
Speaker 1: talk about retail spending. We've got Marshall Cohen, chief industry
Speaker 1: analysts for the np D Group. Maybe he could explain
Speaker 1: why retail sales were up one point three percent like
Speaker 1: many department store chains showed losses in a Marshall start
Speaker 1: started his career pim folding Ralph Lauren Polo sweaters at
Speaker 1: a Macy's Bloomingdale's on Long Island. Will be interesting to
Speaker 1: see he's watching his industry for so long because he's
Speaker 1: seen these trands, a lot of them developing. And we'll
Speaker 1: have him way ensued. Let's have Charlie Pellett way in
Speaker 1: on the news. Now he's back in Bloembrook World headquarters
Speaker 1: with a business flash all right, Ralph Laurence shares. They
Speaker 1: are down Kathleen now by one and a half percent. Nordstrom,
Speaker 1: though the big retail story today disappointing earnings, IT shares
Speaker 1: plunging thirteen point six percent. PepsiCo is suffering its biggest
Speaker 1: interday decline in more than two months, after Nelson Peltz's
Speaker 1: investment firms sold off IT shares in the beverage and
Speaker 1: snack Giant. PepsiCo shares they're down now by one point
Speaker 1: six percent. We are brought to you by National Realty
Speaker 1: Returns on cash in rented real estate find them at
Speaker 1: n r I A dot net stocks extending lessons losses
Speaker 1: to fall to a one month low. The dollar climbed
Speaker 1: after the biggest gain in US retail sales in a year,
Speaker 1: reignited speculation the Federal Reserve may liff rates as early
Speaker 1: as June. Kevin Karen is market strategist at Stephile Nicholas. Yes,
Speaker 1: the Fed raising interest rates, but it's very lows. The
Speaker 1: cash rates are still a low, and bond great yields
Speaker 1: of where they are, So the last question then becomes, well,
Speaker 1: what do you do with the growth part of the portfolio?
Speaker 1: And our take on it has been to shift the
Speaker 1: portfolio to look more companies that have more consistency in
Speaker 1: the mix and focus more on attaining kind of lower,
Speaker 1: more consistent returns than grabbing for the very high returns.
Speaker 1: SMP five hundred index down seventeen a drop of eight
Speaker 1: tenths of one percent, naz stackdown nineteen, a drop of
Speaker 1: point four percent down, Industrials down one hundred seventy seven
Speaker 1: points a drop of one percent, Gold up to ninety
Speaker 1: beyond the twelve seventy four a gain of point two percent.
Speaker 1: And now let's take a look at the other stories
Speaker 1: making us. Thank you Charlie from the Bloomberg news Room,
Speaker 1: Myrami Inoescentio. This news update is brought to you by
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Speaker 1: local gepper today, Get to the airport early and prepared
Speaker 1: to wait. That's the message from a Homeland Security Secretary J. Johnson.
Speaker 1: Johnson says he's hiring additional security screeners, but adds that
Speaker 1: will not end the delays at security checkpoints. There will
Speaker 1: be wait times. There will be wait times this summer
Speaker 1: as they moved through aviation security checkpoints, Flyers across the
Speaker 1: country have been facing growing lines, which during peak hours
Speaker 1: have topped ninety minutes at some airports. Presumptive Republican nominee
Speaker 1: Donald Trump says he is sticking to his guns when
Speaker 1: it comes to his hardliner stance on immigration, but speaking
Speaker 1: to ABC News today, Trump denied he's shifting positions for
Speaker 1: the general election. I don't think I toned it down.
Speaker 1: I want to have strong immigration. I want to have
Speaker 1: strong borders. Some people agree with me, and some people doubt,
Speaker 1: but for the most part they agree. We have to
Speaker 1: have strong orders, and we don't have a country. So no,
Speaker 1: I don't think Texas Senator John Cornyn says Republicans must
Speaker 1: unify and rally around Trump if they want to beat
Speaker 1: Hillary Clinton this November. Can't govern without when, and so
Speaker 1: you can't win by being divided. Trump has been meeting
Speaker 1: with both House and Senate leaders trying to find common ground,
Speaker 1: and New York City art auctions aren't raking in the
Speaker 1: money they once did. One point one billion dollars change
Speaker 1: hands during this week's major auctions at Christie's, Sotheby's and Phillips.
Speaker 1: That's down more than fifty from one year ago. Global
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Speaker 1: From the Bloomberg Newsroom. I'm Rainy in essentio, Charlie, and
Speaker 1: we thank you and again recapping stocks bouncing along the
Speaker 1: bottom with the SMP five hundred index down eighteen, a
Speaker 1: drop of nine tenths of one percent. I'm Charlie Pellett
Speaker 1: and that's a bloom Bread business flash. The surf music
Speaker 1: boy playing that well because I'm Caffeine is along with
Speaker 1: Pim Fox, and we are continuing our live broadcast here
Speaker 1: from Elbow Beach, Bermuda, an ocean front on claim of
Speaker 1: classic style, contemporary luxury. Just a delightful place to be.
Speaker 1: These entire island at Nation is brimming with beautiful sites
Speaker 1: and wonderful, kind, gracious people, and I certainly want to
Speaker 1: thank all of them that have helped us here at
Speaker 1: Elbow Beach and in our time so far on the island.
Speaker 1: Retail sales people are spending money here that where people
Speaker 1: are spending money at resorts. What about the United States,
Speaker 1: What about department stores? The government's retail sales report look
Speaker 1: pretty darn good today, But for a lot of retailers,
Speaker 1: Nordstrom's j C Penny list gets longer and longer. They're
Speaker 1: cutting earnings forecast, they're cutting their sales forecast. Joining us
Speaker 1: Marshall Cohen he retails US at np D Group. Marshall,
Speaker 1: do you ever check in on places like community to
Speaker 1: see how people are spending money? Actually I do. I
Speaker 1: don't get to be there often enough, but we certainly
Speaker 1: do look at boos spending on resorts and boos spending
Speaker 1: on experiences. And that's actually one of the reasons why
Speaker 1: that middle sector of the market has challenged, because the
Speaker 1: experiential customer, the millennial, is a big part of the
Speaker 1: focus for these guys, but it's also a big part
Speaker 1: of the spend diversion. Marshall wondering if you can help me.
Speaker 1: I looked at the numbers from the government today, an
Speaker 1: increase of one point three. But all week I've been
Speaker 1: mindful of the downturn in the reports from many of
Speaker 1: the major department store chains. You saw it happened to
Speaker 1: northstron You saw what happened to Macy's and Coal's. Can
Speaker 1: you explain this when you look at what's going on.
Speaker 1: It's actually a four part answer online, which is, you know,
Speaker 1: you have to be careful what you wish for you
Speaker 1: might just get it. Well. A lot of these retailers
Speaker 1: have really stepped up and ramped up their offerings online.
Speaker 1: That cannibalizes the activity in the store. Omni channel, which
Speaker 1: is the big piece of what they're all talking about
Speaker 1: as far as how they're going to grow their business
Speaker 1: doesn't really grow business at displaced this and then online
Speaker 1: outside of that retail environment certainly has become a formidable
Speaker 1: competition in some categories. Four Online penetration is eroding the
Speaker 1: market share that these mid level of department stores have had.
Speaker 1: Uh you add in the fact that they've all made
Speaker 1: the play to the millennial consumer, and as we just
Speaker 1: kind of discussed, millennial is all about very limited discretionary
Speaker 1: income spending across a very wide field of product, and
Speaker 1: very experiential, which is what the department store doesn't offer.
Speaker 1: The third piece of the puzzle is value. Right now,
Speaker 1: a lot of the categories that are not getting growth
Speaker 1: are all about price points and lower price points and discounts,
Speaker 1: and an example of that would be the ath leisure movement.
Speaker 1: We all know how the big uh trend for the
Speaker 1: whole season of and now into has been this movement
Speaker 1: towards more athletic inspired product. So imagine what stores are doing.
Speaker 1: They're selling, you know, stretched leggings for forty dollars where
Speaker 1: they used to sell stretched denim for a hundred and
Speaker 1: fifty dollars. They have to sell two and three times
Speaker 1: as much merchandise to make up those lost dollars. Marshall,
Speaker 1: you spend what fifty weeks out of the year on
Speaker 1: the road. You go to three or four different stores
Speaker 1: a week. You're all over the country, You're in and
Speaker 1: out of them. Let's take a look at Nordstrom's. Northstrom's
Speaker 1: has been such a successful department store chain, expanding over
Speaker 1: the entire country. But it's even a big successful chain
Speaker 1: like north Rom's kind of doomed. Have we seen the
Speaker 1: end of retail and department stores as we once knew it? Not?
Speaker 1: If they change with the consumer. The consumer has changed
Speaker 1: at a faster pace than the stores at Nordstrom if
Speaker 1: you look at them and any other traditional retailer are
Speaker 1: steeped in tradition, they still keep doing the same thing
Speaker 1: they've been doing since I was folding sweaters of Bloomingdales
Speaker 1: are absolutely right, I've heard that, um. But it's really
Speaker 1: about recognizing that if they don't change who and what
Speaker 1: they are, they will have a tough time. But they
Speaker 1: really can do better, they can do more. They just
Speaker 1: have to learn how to transition quicker. They don't have
Speaker 1: time to test some of these things and then sit
Speaker 1: there and see because the consumer has already moved on
Speaker 1: to something else. So when you have the leading edge
Speaker 1: when it comes to service, that's a big differentiator than online.
Speaker 1: So the stores do have the ability to not only survive,
Speaker 1: but actually start growing again. Well, Marshall, can you tell
Speaker 1: us who the good, the bad, and the ugly when
Speaker 1: it comes to being able to execute as you describe, Well,
Speaker 1: you have to look at individual performers within certain channels. Uh.
Speaker 1: And it's a nice fancy way of basically saying there's
Speaker 1: going to be one or two leaders in every one
Speaker 1: of the of the different channels of distributions. So when
Speaker 1: you look at somebody like in the mass market a target,
Speaker 1: they're out performing the mark it uh. When everybody else
Speaker 1: in apparel was dropping for the quarter, they actually had growth.
Speaker 1: When you look at somebody like a warehouse club, the
Speaker 1: warehouse club channel, you know they actually for the first time,
Speaker 1: you're starting to show some vulnerability. So there's another one
Speaker 1: that you've got to look at. On the negative side,
Speaker 1: when you look at some of the luxury retailers, they're
Speaker 1: holding their own, but they're up against some softer numbers,
Speaker 1: So we have to be careful that we're not looking
Speaker 1: at them as being the growth of the market when
Speaker 1: they're up against some you know, lower numbers, easier softer
Speaker 1: numbers to kind of anniversary. And then when we look
Speaker 1: at the department store sector, but we have to recognize
Speaker 1: is that we are looking at a channel of distribution
Speaker 1: that must change the game. So we have Marshall Cohen,
Speaker 1: Chief Industry Analysts, the n p D Group based in
Speaker 1: Port Washington, New York. You're listening to Taking Stock on
Speaker 1: Bloomberg Radio. Coming up on a taking Stock, how about
Speaker 1: stepping back from the tough time for retailers this week
Speaker 1: and looking at a three to five year outlook for
Speaker 1: big cap companies that can make you money. That's coming
Speaker 1: up on Bloomberg Radio.