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Speaker 1: I'm Charlie Pellet, and that's a Bloomberg business flash. You're
Speaker 1: listening to taking stock with pim Box at Dathlene Hayes
Speaker 1: on Bloomberg Radio. Shares of Best Buy are down more
Speaker 1: than seven percent today. This comes after the company reported
Speaker 1: a current fiscal profit that was below analyst estimates that
Speaker 1: they're citing disruption in their supply chain after following the
Speaker 1: earthquake in Japan and Fukushima sorted. Here to tell us
Speaker 1: a little bit more is Matt Townsend, retail reporter for
Speaker 1: a Bloomberg News. Matt, thanks for musure come in. Yeah,
Speaker 1: thanks for having me. Is this the story that just
Speaker 1: keeps on giving as far as spy in the sort
Speaker 1: of never ending turnaround. Yeah, it's been three plus years now.
Speaker 1: The curren CEO Ubert Jolie came in has a background
Speaker 1: in the hospitality industry, and um, you know, so far,
Speaker 1: what they've done is they've cut a lot of costs,
Speaker 1: They've sold off a lot a lot of their foreign divisions.
Speaker 1: They just have Canada Canada in the US basically right now,
Speaker 1: and investors have like that to a point, but now
Speaker 1: they're basically saying, Okay, start showing some sales growth or
Speaker 1: even a path towards sales growth, and so far the
Speaker 1: company hasn't been able to do that. Um today they
Speaker 1: reiterated that they expect sales for the year to be
Speaker 1: basically flat. Yeah, and the same store sales down zero
Speaker 1: point one, which was smaller than the one point six
Speaker 1: projected among the analysts, even people of Best Spot. What
Speaker 1: is what can they do to achieve more growth and
Speaker 1: more sales. They're in a very very tough space. Circuit
Speaker 1: City couldn't make it, you know, Radio Shack couldn't make it.
Speaker 1: They're like the last standing big brick and mortar store
Speaker 1: you can go into and look at everything from a
Speaker 1: printer to a big screen TV. Exactly what can they do?
Speaker 1: It's tough. I mean, one of the things they rely
Speaker 1: on is these the electronic industry to create hit products.
Speaker 1: So if the iPhone is hot, if some other thing
Speaker 1: is hot, Best Buy basically, you know, benefits from that.
Speaker 1: And right now we're in a kind of lag within
Speaker 1: the product cycle. There's not a lot of things out
Speaker 1: there that are really hot and grabbing consumers attention. So
Speaker 1: besides relying on that, um, they've done some things around
Speaker 1: the margins, uh, making the stories more efficient, um, you know,
Speaker 1: selling return to merchandise. But at the end of the day,
Speaker 1: they really really really need for there to be a
Speaker 1: nice product cycle. That's what's going to drive sales. Do
Speaker 1: they also really really need a new CFO because they
Speaker 1: got one they did. Yeah, that was It's debatable why
Speaker 1: the stock is down to day. Some of them might
Speaker 1: be the weak second quarter forecast, but also there's CFO.
Speaker 1: A woman named Sharon McCollum who came in along with
Speaker 1: who bears A Lee, the CEO, about three years ago.
Speaker 1: She had a lot of credibility to the turnaround. She
Speaker 1: was a retail veteran. She was at William Sanoma, operating
Speaker 1: officer at William Sanoma. The analysts who covered her loved her.
Speaker 1: I mean almost every time I would speak to analyst,
Speaker 1: they would rave about share. I'm gonna call him. She
Speaker 1: came out and said, look, we're gonna cut a billion
Speaker 1: dollars and annualized costs. They did, They backed that up
Speaker 1: and that was a big proving ground for this turnaround.
Speaker 1: And her leaving, you know, has some analysts maybe questioning
Speaker 1: what's to come next even though the company been over
Speaker 1: backwards to say her replacement, this woman named Corey Barry
Speaker 1: been in the company a long time, was grooming buy
Speaker 1: Sharing to take over. So they're trying to paint it
Speaker 1: as you know, in a smooth transition. Right now, Where
Speaker 1: does the stand in terms of buys, holds cells for
Speaker 1: Best buyes? Anybody real positive? Are most people negative? It's
Speaker 1: a lot of people in the middle. What was big
Speaker 1: today was City Group analyst came out and went back
Speaker 1: from a bye to a hold. Analyst named Kim McShane
Speaker 1: is pretty influential in the industry, and she basically cited,
Speaker 1: you know, concerns about going forward without the CFO UM
Speaker 1: and you know, just a week overall electronics market, I
Speaker 1: mean as much hype as Apple and a lot of
Speaker 1: these tech companies get. I mean, they haven't really come
Speaker 1: out with a huge hit product in a couple of
Speaker 1: years now, Alright, hit products very important if you're in retail.
Speaker 1: Mattown's and hit story for you today retail reporter for
Speaker 1: Bloomberg News looking at Best Buy earnings and their cf
Speaker 1: C E c FO departing well from retail to politics.
Speaker 1: Big story breaking the last couple of days. The governor
Speaker 1: of Virginia, Terry McCall of, a Democrat, of close ties
Speaker 1: to the Clinton's and a former board member of the
Speaker 1: Clinton Global Initiative, is now being investigated by federal authorities
Speaker 1: for perhaps some uh campaign law violations. Joining us to
Speaker 1: discuss this and tell us where what he thinks it
Speaker 1: means for Hillary Clinton's Campaign's Mark Halprin, he's the host
Speaker 1: of Bloomberg TVs. With all due respect, but you can
Speaker 1: watch weekdays at five pm Wall Street Time, and of
Speaker 1: course you can listen on Bloomberg in Washington, d C. So, Mark,
Speaker 1: this comes out of left field. What exactly is Trey
Speaker 1: mccullop being accused of and why do you think it's
Speaker 1: a bad thing for Hillary Clinton? Well, we don't know
Speaker 1: exactly what the prosecutors are looking at, but it involves
Speaker 1: the kind of mix of relationships, fundraising, government access that
Speaker 1: you often see as run of the middle activity for politicians.
Speaker 1: It's interesting and notable that this is a democratic justice
Speaker 1: department that's looking at a democratic governor. So if the
Speaker 1: if the two entities were of opposite parties, there would
Speaker 1: be a instant speculation that this was something political, because
Speaker 1: there is no more important person in the Clinton's life
Speaker 1: than Terry mccaull if. He has been their biggest fundraiser
Speaker 1: over the years. He has also been a titleless advocate
Speaker 1: for them within the Democratic Party circles now as governor
Speaker 1: Virginia used to be the Democratic Party chairman, and Virginia
Speaker 1: course is a critical state in the election and the
Speaker 1: presidential election, and Terry mccaulliffe was expected to is expected
Speaker 1: to spearhead and effort in Virginia for Hillary Clint to
Speaker 1: keep those electoral votes in the Democratic column. This is
Speaker 1: uh a evolving situation. Yeah, the investigation might go nowhere,
Speaker 1: but it does threaten to engulf Terry mccaulliffe and the
Speaker 1: kind of accusations that the Clinton's have faced again at
Speaker 1: co mingling of fundraising, including potentially money from overseas with
Speaker 1: relationships that verge into the governmental as well. Uh, Mark Happer,
Speaker 1: I just want to understand this that Terry mcculliffe is
Speaker 1: being investigated by the FBI and the Justice Department for
Speaker 1: accepting about a hundred and twenty thousand dollars in his
Speaker 1: for his gubernatorial campaign from companies that are controlled by
Speaker 1: Wang Wang Yang, the Chinese businessman, is also donated to
Speaker 1: the Clinton Foundation. Is that the sort of connection that's
Speaker 1: gonna lead to the Clinton Foundation. Well, those are the
Speaker 1: reports of the of the kind of outlaw lines of
Speaker 1: the um of the of the charges. Most of the
Speaker 1: news accounts say that this is not something that's targeting
Speaker 1: the foundation's activities. It's not entirely there with the wrongdoing
Speaker 1: being looked at. Is is it simply or LEDs wrong doing?
Speaker 1: Is it simply the prospect that mccaulliff took money from
Speaker 1: a foreign entity? Uh? The fundraising rules are are such that,
Speaker 1: based on his citizenship and the nature of his companies,
Speaker 1: if the money was made here in the United States,
Speaker 1: that would be fine. Or is there more to it?
Speaker 1: Is there more about again a nexus of relationships related
Speaker 1: to the government, the foundation as well as the private campaign.
Speaker 1: We just don't know and and and you know, the
Speaker 1: presumption of innocence is isn't one element. But there's also
Speaker 1: the fact that often in the reporting, at this phase
Speaker 1: of an investigation, and the reports arts gone on for
Speaker 1: some time, the prosecutors or or agents FBI agents who
Speaker 1: get frustrated that the cases and moving put things out
Speaker 1: to try to shake things up. And you don't want
Speaker 1: to assume that all the things that are being leaked
Speaker 1: out there are necessarily true, or that just because there's
Speaker 1: smoke somewhere, there's necessarily fire. But as a potential problem
Speaker 1: for certainly for Terry mccafugh and potentially for the Clinton's
Speaker 1: both symbolic and substantively saying a great development, And again
Speaker 1: I'll say it comes not from a Republican Justice Department
Speaker 1: but a Democratic one, suggesting that their motives are prosecutorial
Speaker 1: and potentially dangerous politically. So how does Hillary Clinton handle
Speaker 1: is for now? Mark? Does she just avoid the issue?
Speaker 1: Will reporters start hounding her about this at her appearances? Well,
Speaker 1: John Homed and I asked her campaign spokesman last night,
Speaker 1: Brian Fallon, about it. Uh and subsis simply, well, you
Speaker 1: vouched for Terry McCall of its integrity. Fallon is himself
Speaker 1: a former Justice Department spokesman, and it's pretty cautious sectisnas
Speaker 1: He would not. I suspect Hillary Clinton will eventually be
Speaker 1: asked about this, and she'll probably plead ignorance. Terry mccough
Speaker 1: himself claims until the news accounts he didn't know anything
Speaker 1: about the investigation, so she can probably as long as
Speaker 1: there are no indictments, she can probably get away with
Speaker 1: saying it's an investigation, I don't know anything out, but
Speaker 1: she's certainly I'm home. A certain will be asked about
Speaker 1: it the next time reporters get a chance. Mark Senator
Speaker 1: Bernie Sanders and the Democratic National Committee agreeing to put
Speaker 1: some of his supporters on the convention platform committee. It's
Speaker 1: certainly a step towards unity. It's one of the long
Speaker 1: list of things that Sanders and his supporters have been
Speaker 1: looking for to try to move towards a reconciliation. Sanders,
Speaker 1: at the feet level says that he doesn't want Donald
Speaker 1: Trump to win. He will if he's not. The nomine
Speaker 1: helped Hillary Clinton. But in the meantime, there's a lot
Speaker 1: of time between now and the final primaries and caucuses
Speaker 1: and first part of June, and then from there five
Speaker 1: weeks or so out of the Democratic Convention in Philadelphia.
Speaker 1: The hope for the optimist of the Clinton camp is
Speaker 1: that moves like this, giving him representation on an important
Speaker 1: committee for the convention will get him effectively out of
Speaker 1: the race. Before the convention. The real danger for her
Speaker 1: now is that Sanders spends the intervening weeks continuing to
Speaker 1: agitate against her and and and talking about issues, and
Speaker 1: uses a convention to make points rather than to unified.
Speaker 1: Thank you very much. Mark Halpern hosted, with all due respect,
Speaker 1: Bloomberg Politics weeknights five pm Wall Street Time on Bloomberg
Speaker 1: Television and nine and Night one in Washington, d C.