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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEO, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Find the Bloomberg Markets

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Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. Let's talk a little technology

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Speaker 1: to talk Apple, let's talk Uber And who better to

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Speaker 1: do that with than Dan Ives Dance and Managing director

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Speaker 1: for equity research at web Bush Securities. Uh, really one

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Speaker 1: of our go to voices on all things technology. Dance,

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Speaker 1: thanks so much for joining us here. Interesting news. I

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Speaker 1: just kind of read a news story just a couple

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Speaker 1: of minutes ago about Apple talking about bundling some of

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Speaker 1: their services here, what can you tell us about what's

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Speaker 1: actually going on with Apple and some of their services

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Speaker 1: businesses which are a key to the future of this company. Yeah,

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Speaker 1: and you hit the nail on the head in terms

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Speaker 1: of services being so significant. That's a sixty billion dollar

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Speaker 1: revenue stream next year. And I think the bundling, it's

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Speaker 1: just a massively smart move by Cooking Cupertino. I think

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Speaker 1: ultimately this could increase services revenues by another five to

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Speaker 1: seven percent. In terms of it's all that monetizing that

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Speaker 1: golden installed based That's what Apple is doing. They're very

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Speaker 1: similar many ways what Amazon done with the Amazon Prime.

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Speaker 1: What would they look like, because as I understand it,

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Speaker 1: you know, some of them are kind of bundled already.

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Speaker 1: Know you get like three or three months of this

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Speaker 1: if you you know, if you're subscribed to that, and

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Speaker 1: you know, maybe not exactly monthly bundling, but something similar. Yeah,

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Speaker 1: I think this is really take a step back if

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Speaker 1: you think about gaming, music, ultimately video you know, Apple

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Speaker 1: TV plus, you know, as well as potentially iCloud and

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Speaker 1: some other package services in there. I mean, as they

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Speaker 1: have continued to expand their offerings, they have more content

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Speaker 1: to sell and I think that's just going to increase

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Speaker 1: over time. And what this is really doing, it's putting

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Speaker 1: really more of a fence around their backyard, just monetized

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Speaker 1: the installation and ultimately pricing it. At points where media

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Speaker 1: consumer was not going to go for one or two

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Speaker 1: of the bundles like an Apple News, now they will,

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Speaker 1: and especially in the pandemic backdrop with the work from

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Speaker 1: home and many you know, continuing to to kind of

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Speaker 1: access things remotely. This is the right move at the

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Speaker 1: right time for them. Hey, Dan, I want to switch

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Speaker 1: gears a little bit and talk about just the gig

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Speaker 1: economy writ large week again. We got some jobless numbers today,

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Speaker 1: But thinking about Uber and California, UM California is talking

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Speaker 1: about I guess reclassifying some of those gig workers like

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Speaker 1: an Uber and Lifted drivers into employees. This is a

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Speaker 1: fundamental risk to these companies, isn't it. It's not just

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Speaker 1: the black cloud. It's really a future business model risk

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Speaker 1: to the overall gig economy with the Uber and Lift

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Speaker 1: frotain center, and it continues to be a head scratcher

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Speaker 1: for many you know, if you mean many of the

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Speaker 1: drivers that we've talked to you even over the last year,

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Speaker 1: they don't want to be employees. That's why they work

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Speaker 1: for Uber Uber itself. If they ever had to reclassify them,

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Speaker 1: that could be upwards a four to five million of

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Speaker 1: incremental costs per year. Obviously they're gonna fight through the

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Speaker 1: court system as well as in the ballot box. But

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Speaker 1: the fear is is in terms of what California is doing.

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Speaker 1: It's a Pandora's box situation where other states and cities

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Speaker 1: will file. Right now, we think VARs worsen the fight.

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Speaker 1: But if this continues down the road and ultimately Uber

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Speaker 1: that's why they might have to temporarily get out of California.

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Speaker 1: It's fascinating. Will it be a president for other companies?

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Speaker 1: You think? Well, I think when you think about gig economy,

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Speaker 1: that's the word because it's starts to ubern Live and

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Speaker 1: there's a cascading impact, and I think there's a lot

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Speaker 1: of unintended consequences here, which is part of the big

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Speaker 1: worry as California has gone down this head scratching route.

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Speaker 1: And when you think about the gay economy, you're talking

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Speaker 1: about something that's created millions of jobs and now many

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Speaker 1: of them could be at risk, even on the contractor

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Speaker 1: employee debate, and that continues to be a frustration, not

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Speaker 1: just for the companies but obviously for investors as right

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Speaker 1: now that continues to be the need to risk around

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Speaker 1: these names. Yeah, so it's interesting. I mean, I guess

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Speaker 1: the the argument there is clearly, hey, these folks are working,

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Speaker 1: but they're not getting benefits. For example, what's the what's

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Speaker 1: the argument from UH you know, the ubers and lifts

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Speaker 1: and the other gig companies. The argument is, if an

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Speaker 1: employee in the state of California's eye that wants to

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Speaker 1: work ten hours a week, what do they do? You know,

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Speaker 1: there's many of them. Like the flexible schedule might be

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Speaker 1: a second job, it might be actually income for a

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Speaker 1: student that's looking to save money for college. Stain. The

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Speaker 1: frustration from their perspective is the flexibility is the nature

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Speaker 1: of the driver model, and most drivers do not want that.

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Speaker 1: And that's that's ultimately the heart of the gig econ me,

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Speaker 1: which is why this is such a bewildering issue. Of Course,

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Speaker 1: at a time, in a once in a hundre your

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Speaker 1: pandemic where the gig economy, we believe, based on our

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Speaker 1: survey work of consumers will not get into an uber

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Speaker 1: or lift to a vaccines found just given safety issues.

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Speaker 1: Will there be consolidation among some of these types of

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Speaker 1: companies you know, Uber Lift, and of course you have

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Speaker 1: other companies in the gig economy competing too. I mean,

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Speaker 1: I think you will start to see some consolidation on

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Speaker 1: the smaller side. Uber and Wift, I think they go

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Speaker 1: about it alone. That's why profitability is so important, and

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Speaker 1: that's what we've talked about yesterday. But right now to

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Speaker 1: herculean but bill battle for many of these companies as

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Speaker 1: they get through this environment. I do believe on the

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Speaker 1: other side they will be able to navigate, but for

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Speaker 1: right now, this continues to be just a massive headwind

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Speaker 1: that they're facing down before we go. I have one

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Speaker 1: question for you. Of all of your companies in your

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Speaker 1: of the universe, the only underperform you have is on

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Speaker 1: Slack Technologies, which I would have thought might have been

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Speaker 1: doing pretty okay in this environment. Why own the performance?

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Speaker 1: Slack a great company, obviously work from home name. Our

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Speaker 1: biggest issue with Slack is the stocks had a great run.

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Speaker 1: I just think with Microsoft and Redmond and teens, that's

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Speaker 1: going to be a very difficult market for them to

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Speaker 1: further penetrates. They go after Microsoft, a great company. It

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Speaker 1: just comes down to, is a great company a great

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Speaker 1: stock at this valuation. That's why we're cautious at Slack

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Speaker 1: at these levels. I hear that, all right, and thank

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Speaker 1: you and thanks for being so open about that particular question.

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Speaker 1: I appreciated Don Ives, equity analysts at wed Bush Securities

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Speaker 1: joining us it is time for Bloomberg Opinion, and for

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Speaker 1: that now we bring in one of our favorite opinion columnists,

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Speaker 1: and Neil Ferguson, a senior fellow at the Hoover Institution

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Speaker 1: and of course Bloomberg columnist, among many many other roles

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Speaker 1: that he plays in society and has played over the

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Speaker 1: years in academia and elsewhere. His latest column is TikTok

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Speaker 1: is a super weapon in China's Culture War. Neil, thanks

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Speaker 1: for joining. I want to read out the first couple

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Speaker 1: of lines of your column. It's hard to get past

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Speaker 1: the initial share inality of TikTok. I spent half an

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Speaker 1: hour trying to make sense of the endless feed of

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Speaker 1: video snippets of ordinary people doing daft things with their

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Speaker 1: dogs or in their kitchens or in the gym. That's

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Speaker 1: the background. If TikTok is so inane, how has it

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Speaker 1: become such a cultural lever in the sense that it's

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Speaker 1: mobilized K pop fans to register for Donald Trump's Tulsa rally.

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Speaker 1: It's been a pandemic favorite and suddenly, as you say,

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Speaker 1: it's now got something to do with Cold War two.

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Speaker 1: That's right. Well on my initial reaction, As you can tell,

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Speaker 1: from the opening of the column was give me a break,

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Speaker 1: it's not serious. I did some some thorough research, as

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Speaker 1: a middle aged man should when confronted with an app

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Speaker 1: popular with the young. My kids and I got some

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Speaker 1: interesting feedback. My eight year old son said, Hey, check

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Speaker 1: out the Dancing Weasel, but my twenty one year old

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Speaker 1: son said, woe, it's it's toxic. I don't go near it,

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Speaker 1: and that was an interesting clue. I think the key

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Speaker 1: here is to recognize that this is a Chinese owned

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Speaker 1: app powered by artificial intelligence that is incredibly appealing and

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Speaker 1: indeed addictive to teenagers, and half of American teenagers have

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Speaker 1: used TikTok. When they use it, what they're doing is

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Speaker 1: essentially providing the app with data, and the app also

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Speaker 1: looks for other data about them. It doesn't just sit

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Speaker 1: there passively. We know from other reports that that TikTok

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Speaker 1: is pretty good, rather like Facebook getting data about users

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Speaker 1: from any source it can online. And so the key

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Speaker 1: argument here is that we've essentially created a portal are

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Speaker 1: allowed to be created, the portal through which young Americans

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Speaker 1: provide all kinds of personal data, potentially embarrassing even compromising

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Speaker 1: data to a Chinese controlled app. And the critical point

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Speaker 1: is that TikTok is owned by a Chinese company, byite Dance,

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Speaker 1: and any Chinese internet company is legally obliged to make

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Speaker 1: data all data available to the Chinese government, that is,

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Speaker 1: the Chinese Communist Party. And that's why this apparently silly

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Speaker 1: trivial app actually is a problem, and we can't simply

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Speaker 1: let it carry on the way it is, which is

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Speaker 1: essentially becoming the most popular app amongst amongst young Americans.

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Speaker 1: So neil I believe TikTok's response would be, hey, all

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Speaker 1: of the data is on servers. None of those servers

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Speaker 1: are in China. Um is that a valid kind of response. No,

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Speaker 1: it's not, because it doesn't really matter where the servers are.

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Speaker 1: If if she didn't, Pink calls up Uh and says, hey,

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Speaker 1: we want to check out data on X because bite

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Speaker 1: dance is compelled by Chinese law to to to comply,

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Speaker 1: then there would be no There would be no way

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Speaker 1: of their saying no. I mean, I think to be fair.

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Speaker 1: John J. Ming, who is the founder of bike Dance

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Speaker 1: and who had the vision to see TikTok's potential, you know,

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Speaker 1: he gets a lot of credit as an entrepreneur and visionary.

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Speaker 1: Facebook failed to make an app as good as this.

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Speaker 1: Facebook was trying to get video right, and it missed

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Speaker 1: the key point, which is that if you just let

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Speaker 1: users do the content and let the AI pick the

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Speaker 1: best content, you'll crush it. So you've got to give

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Speaker 1: him credit as an entrepreneur, and you should give him

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Speaker 1: credit also because I don't think personally he is an authoritarian.

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Speaker 1: But the reality is he's a Chinese citizen. It's a

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Speaker 1: Chinese company, the Chinese Communist Party. What's the data, It

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Speaker 1: doesn't matter where the servers are. And by the way,

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Speaker 1: you know TikTok says and it's user agreement that if

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Speaker 1: you hand over data then its parent company bike Dance

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Speaker 1: will have access the data. So they are open about that,

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Speaker 1: and now I think is the crux of the matter.

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Speaker 1: Although as you say, you know this has to be

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Speaker 1: seen in a broader context. I think I would be

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Speaker 1: less exercised about all this if it wasn't for the

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Speaker 1: fact that we know China is now engaged in a

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Speaker 1: pretty active campaign online and offline to exert influence in

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Speaker 1: American culture. Really the way the Russians did back in

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Speaker 1: twenty sixteen and We've seen active efforts by the Chinese

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Speaker 1: government on Twitter on other platforms too, so disinformation about

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Speaker 1: COVID nineteen. So this has to be seen in that context.

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Speaker 1: It's not as if the Chinese government is playing no

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Speaker 1: part in our culture war. It is actively involved in

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Speaker 1: trying to sow disinformation in American public discourse. Neil, we

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Speaker 1: finally have a tickets in Joe Biden, Kamala Harris. If

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Speaker 1: that turns out to be the next you know, inhabitants

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Speaker 1: of the White House and the of All Office, and

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Speaker 1: you know various wings of the West of the West

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Speaker 1: Wing and the East Wing, and so what have you.

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Speaker 1: What happens with the China relationship, Well, I think from

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Speaker 1: the vantage points of China, Biden presidency has become a

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Speaker 1: lot more repealing than a continuation of the Trump presidency,

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Speaker 1: because although Donald Trump started off trying to have a

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Speaker 1: close personal relationship with t and thing, since the trade

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Speaker 1: war started in ten things have gone rapidly downhill. And

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Speaker 1: I argued at the beginning of last year that we

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Speaker 1: were in Cold War two and we should, you know,

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Speaker 1: stop kidding ourselves. So I think from the Chinese vantage point,

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Speaker 1: they just want to get through to November three and

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Speaker 1: hope that that they get an altogether less hawkish president.

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Speaker 1: Kamala Harris is an interesting pick for Biden. I think

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Speaker 1: from the vantage point of the tech sector, it's a

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Speaker 1: kind of sigh of relief because although she's been known

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Speaker 1: for her pretty aggressive questioning on Congressional committe he is

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Speaker 1: in truth, I think she is as friendly a vice

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Speaker 1: presidential candidate a Silicon Valley could have hoped for. So

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Speaker 1: from that point of view, I think the risk of

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Speaker 1: aggressive antitrust and other actions probably goes down if Biden

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Speaker 1: Harris is the winning ticket. Neil, we just had the

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Speaker 1: president's call reporters into the Oval office and we will

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Speaker 1: could likely be hearing from him in a few moments.

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Speaker 1: But there is a headline now that there is an

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Speaker 1: historic deal to normalize relations between Israel and the United

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Speaker 1: Arab Emirates. I'm curious as to your thoughts about how

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Speaker 1: the Middle East will be reshaped, if at all, given

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Speaker 1: that Israel has this new normalized relationship apparently with the

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Speaker 1: United Arab Emirates. Well, this has been kind of cooking

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Speaker 1: quietly for a while. Most attention has been elsewhere, and

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Speaker 1: of course substantial sections the media are skeptical about the

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Speaker 1: President's Middle East policy and have been from the very outset,

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Speaker 1: But in reality, there's been a massive realignment in the

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Speaker 1: region in the last three and years, and I think

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Speaker 1: the Trump administration has done something at least to contribute

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Speaker 1: to that, the main alignment being but a whole bunch

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Speaker 1: of our countries, led by the U a E. Have

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Speaker 1: been looking to normalize relations with Israel and focus regional

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Speaker 1: security policy on Iran, which poses a threat not only

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Speaker 1: to Israel but two Sunni majority states. So I think

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Speaker 1: this is important and I think it actually is a

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Speaker 1: success for President Trump. That don't expect to read that

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Speaker 1: in the New York Times of the Washington Post this week.

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Speaker 1: Neil Ferguson, senior fellow at Hoover Institution and a Bloomberg

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Speaker 1: opinion calumnist. A m C right there reopening and it's

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Speaker 1: been a big story this morning. Mark Lazie the other

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Speaker 1: day talking about how he was looking at a MCS

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Speaker 1: secured debt. And that's what I want to start with

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Speaker 1: when I bring in Sally Bakewell, who's a corporate finance reporter,

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Speaker 1: because one of her stories in the last couple of days,

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Speaker 1: most of America is being shot out of the great

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Speaker 1: borrowing binge. Ever, and this is why Mark Lazie is

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Speaker 1: looking at the types of things like AMC secured debt. Sally,

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Speaker 1: tell us what exactly you mean by the fact that many,

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Speaker 1: many great companies are actually not able to borrow these days, Hi, Funnie. Yeah,

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Speaker 1: AMC is actually a really great example that you bring

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Speaker 1: up there, because like a number of companies airlines, hotels,

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Speaker 1: cruise lines, it's been absolutely devastated or it had been

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Speaker 1: devastated by the virus. The virus of course whites out

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Speaker 1: the revenue of it and many consumer facing companies UM.

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Speaker 1: And what they've been able to do, however, because they're

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Speaker 1: big companies that can tack the bond market is go

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Speaker 1: straight there and they've found willing invested to pay debt

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Speaker 1: because the debt markets have effectively been back stopped by

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Speaker 1: the vast kind of Federal reserve guerrilla UM and it's

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Speaker 1: pledged to use it near limitless balance sheet to buy

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Speaker 1: corporate bonds, and so that hasn't enabled all these companies

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Speaker 1: kind of almost without too much discrimination, all of them

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Speaker 1: have been able to hit the bond market. And we

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Speaker 1: saw another fantastic example of the kind of limitless nature

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Speaker 1: of it today with Apple, which is of course of

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Speaker 1: a great blue ship company that would lenders would fall

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Speaker 1: over themselves to Lento. But it's it's in the same

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Speaker 1: group of big companies. They can hit the bond market,

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Speaker 1: bond market no matter what, UM. But on the other

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Speaker 1: side of that, that kind of tremendous liquidity opportunity is

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Speaker 1: not mirrored for smaller firms, and that's how we're getting

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Speaker 1: the fact that they're missing out. Yeah. So sadly, the

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Speaker 1: smaller firms, mid sized firms, they depend less on the

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Speaker 1: capital markets, more on their local banks. Are are bank lenders,

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Speaker 1: and I guess they're being prudent saying, boy, in this pandemic,

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Speaker 1: I gotta be tighter on my credit standards. Is that

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Speaker 1: kind of what's happening here? Absolutely, that's what's happening. UM.

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Speaker 1: There was a recent loan officers survey of UM some

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Speaker 1: of the biggest banks where they found that loans have

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Speaker 1: been tightening at the fastest pace or at the most

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Speaker 1: since at least the financial crisis, and prices have gone

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Speaker 1: up to so for smaller companies, they can't access the

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Speaker 1: bond market, where this enormous amount of liquidity is squashing around, UM,

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Speaker 1: and it's harder for them to get loan. Now, on

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Speaker 1: the flip side, the Federal Reserve has come up with

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Speaker 1: these other lending programs. It has the main Street Lending program,

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Speaker 1: it has the Paycheck Protection program. But those have drawn

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Speaker 1: criticisms for being quite difficult to access, for being complex.

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Speaker 1: And actually, Paul, you raised that point. Banks don't necessarily

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Speaker 1: want to be involved in them because they don't feel

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Speaker 1: that they're being compensated for the risk of lending to

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Speaker 1: companies that potentially if you don't know if they will

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Speaker 1: be around in the next year, Sally, what happens to

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Speaker 1: these companies you just said they may not be around

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Speaker 1: in the next year. But there are also options like,

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Speaker 1: for example, going to quote unquote vulture investors. Right, yeah,

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Speaker 1: and that is another world, um, that we are seeing

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Speaker 1: varying degrees of activity. Um. Of course, there are all

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Speaker 1: the direct lenders, there are the distressed funds UM to

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Speaker 1: varying degrees. They are jumping in opportunities. But you know

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Speaker 1: that comes at the price too, So it's it's there

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Speaker 1: is money there, but you probably have to pay up

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Speaker 1: for it, um. And but a lot of firms a

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Speaker 1: lot of investors are definitely seizing on on that opportunity

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Speaker 1: as other lenders for trend so sally. This kind of

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Speaker 1: causing the question again the role of the bank, the

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Speaker 1: local bank. This is the time when their customers really

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Speaker 1: need them. What are the banks say they are? I

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Speaker 1: think they're a bit tied, because of course they have

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Speaker 1: to be more risk averse. They are building up their

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Speaker 1: lost provisions because they know what well they know that

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Speaker 1: we don't know, um what exactly is down the road.

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Speaker 1: And after the last financial crisis, which they were the

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Speaker 1: epicenter of, they of course have become a lot more

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Speaker 1: risk averse. Um. But then they are under this kind

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Speaker 1: of pressure from the Federal Reserve two, which is trying

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Speaker 1: to coax them to lend to these small and medium

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Speaker 1: sized firms, which is so important to the economy. And

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Speaker 1: of course you know it's it's important for banks too

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Speaker 1: that those firms thrive. Um. But I think you know,

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Speaker 1: when I was talking to people for this story, um,

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Speaker 1: they said, you know, if you're a good customer, um,

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Speaker 1: without too much risk, you know, people might banks don't

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Speaker 1: necessarily want to lend to you anyway. They want to

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Speaker 1: get the fees they want to get the sort of

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Speaker 1: you know, higher interest rates, so you know they're in

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Speaker 1: a tight spot for sure. Yeah, exactly, Sally Bakeball, thanks

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Speaker 1: so much for joining us. Really appreciate a fascinating story here. Again,

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Speaker 1: big companies like Apple and so on barring and historically

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Speaker 1: low rates, but a lot of small and midsized businesses

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Speaker 1: really finding it hard to get credit here in this pandemic,

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Speaker 1: so fascinating story. Sally Bakewell, corporate financial reporter for Bloomberg News. Well,

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Speaker 1: it is going to be a slightly different back to

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Speaker 1: school retail season this year, if it exists at all.

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Speaker 1: Let's ask somebody who has been following this and presumably

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Speaker 1: has some data and at least much much better informed

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Speaker 1: about what's going on out there than me. Arthur Zachowitz

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Speaker 1: is Women's Where Daily executive editor. Arthur, thank you so

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Speaker 1: much for joining us. What are you seeing this August

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Speaker 1: as we know approach what would have been a new

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Speaker 1: school year. Well, well, thanks for having me first. You know,

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Speaker 1: I think what we're seeing is a lot of uncertainty

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Speaker 1: and caution. Right, So, the National Retail Federation put ups

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Speaker 1: some of you know, kind of estimates on back to

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Speaker 1: school and they're looking at almost thirty four billion dollars

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Speaker 1: impact sales versus twenty six billion last year, and the

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Speaker 1: pulp bulk of that is is about ten billion in

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Speaker 1: online sales. But you know, honestly, you know, I think

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Speaker 1: that's kind of magical thinking, given you know what's occurring

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Speaker 1: in the market right now. Yeah, Arthur, I mean, do

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Speaker 1: we even have a sense of what percentage of KATE

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Speaker 1: through twelve students in the US will actually be going

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Speaker 1: back physically to school as opposed to remote learning? Yet again,

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Speaker 1: I know some parts of the South and the West

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Speaker 1: have actually and they have gone back to school, but

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Speaker 1: we have a sense of what percentage nationwide. Uh, you know,

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Speaker 1: I don't know that that's a great question. I know

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Speaker 1: that you know, there are plans in place in certain states, say,

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Speaker 1: you know, like New York, for example, has three different scenarios,

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Speaker 1: you know, with many of the schools, and they just decided,

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Speaker 1: you know, a couple of school districts in uh in

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Speaker 1: the Hudson Valley for example, just decided to do online only.

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Speaker 1: So we don't really know, and that's part of the uncertainty.

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Speaker 1: I think that you know, you're seeing Plus you know,

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Speaker 1: we heard I think New Roman may excuse me, new

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Speaker 1: brands said that they're a little um, you know, cautious

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Speaker 1: because the consumer's caution and just you know, as far

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Speaker 1: as like what to buy in the shopping lists haven't

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Speaker 1: even come through for a lot of school districts across

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Speaker 1: the country. So this uncertainty again in the market. What

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Speaker 1: runs are you hearing from that are very concerned about

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Speaker 1: their future? Arthur Well, I think, um, you know, we've

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Speaker 1: seen a lot of retail bankruptcies. Obviously, it seems like

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Speaker 1: every other day there's another retailer going out of business.

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Speaker 1: And and what's driving that is you know a lot

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Speaker 1: of you know, online sales and a reluctance like consumers

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Speaker 1: to go into physical stores. But you know, as far

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Speaker 1: as like who's gonna you know, play out the best

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Speaker 1: through the holidays and through you know, back to school,

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Speaker 1: I think Target is is well positioned, right, That's that

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Speaker 1: sort of that one stuff shop. You know that moms

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Speaker 1: feels comfortable you know, getting essentials, getting food, getting you know, apparel,

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Speaker 1: getting gifts. Uh, you know, they could go in and

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Speaker 1: out in a relatively you know, safe environment that they're

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Speaker 1: familiar with. But you know, everyone else this is a

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Speaker 1: challenging time. You know, if if you're not you know,

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Speaker 1: a brand that has a real strong connection to the consumer,

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Speaker 1: you're gonna have difficulties. I think moving forward, you know,

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Speaker 1: I think look look at Walmart recently label with their

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Speaker 1: guidance based on the uncertainty of back to school. So

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Speaker 1: you know, it's it's unclear as far as you know,

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Speaker 1: how this plays out in the future. Also, you know,

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Speaker 1: there's an interesting thing going all right, we have an

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Speaker 1: election year, which is creates uncertainty, right, we have the

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Speaker 1: pandemic which is ongoing. We have we're in a recession, right,

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Speaker 1: and then we have consumer anxiety on top of that.

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Speaker 1: So you know, it's a it's a perfect storm for

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Speaker 1: um creating shoppers who maybe want to be more frugal

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Speaker 1: and pull back on spending. So Arthur, what our parents

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Speaker 1: actually gonna be buying here in this back to school

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Speaker 1: is just just you know, mass and wipes and hand sanitizer. Sure,

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Speaker 1: because the safety it is first, right, So for the

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Speaker 1: kids going back, you know, it's still safety items, uh,

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Speaker 1: and you got to carry that stuff in something. So

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Speaker 1: I think backpacks, you know, you'll you'll see you know,

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Speaker 1: those traditional categories supposed to regular school supplies. You know,

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Speaker 1: as far as the peril is concerned. You know kids,

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Speaker 1: you know, if you're going physically back to school, they

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Speaker 1: tend that tends to come later. You know, they kind

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Speaker 1: of go into school and then they look, you know,

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Speaker 1: to see what everybody else is wearing and what the

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Speaker 1: trends are. And then they come back and you know

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00:24:14,280 --> 00:24:18,080
Speaker 1: take mom uh either while online mostly and say I

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00:24:18,119 --> 00:24:20,359
Speaker 1: want this, this and that, you know, and there's there's

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00:24:20,359 --> 00:24:23,320
Speaker 1: some really interesting stuff going on right now. You know,

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00:24:23,359 --> 00:24:25,440
Speaker 1: as far as like tweens. You know, I think Pup

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00:24:25,440 --> 00:24:29,120
Speaker 1: Sugar Iss teams up with Old Navy. That's interesting. Um

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00:24:29,400 --> 00:24:32,280
Speaker 1: Oshkosh Bagash is that you know that the the the

435
00:24:32,359 --> 00:24:34,600
Speaker 1: overall company, right, so they they're still being on in

436
00:24:34,600 --> 00:24:38,120
Speaker 1: twenty five years and they're launching a collection actually um

437
00:24:38,160 --> 00:24:40,960
Speaker 1: to red. You know they used to uh have adult stuff,

438
00:24:41,040 --> 00:24:43,040
Speaker 1: right so now they really introduced that so the whole

439
00:24:43,040 --> 00:24:46,040
Speaker 1: family could wear you know co uh you know cover rolls.

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00:24:46,040 --> 00:24:49,439
Speaker 1: So that that's interesting. It's fun. But you know, um,

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00:24:49,560 --> 00:24:51,479
Speaker 1: as far as like the staples are concerned, as far

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00:24:51,520 --> 00:24:53,560
Speaker 1: as like apparel, you know, I think you'll see Nike

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00:24:53,760 --> 00:24:57,160
Speaker 1: and um you know in brands that that offer active prayer,

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00:24:57,720 --> 00:25:00,400
Speaker 1: uh and essentials too, like you know, shopping on targets

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00:25:00,400 --> 00:25:03,320
Speaker 1: for example, you'll see printed T shirts as far as

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00:25:03,720 --> 00:25:07,080
Speaker 1: you know from any brand really doing well. What about

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00:25:07,080 --> 00:25:10,119
Speaker 1: the luxury brands? I mean, you know, and this wouldn't

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00:25:10,160 --> 00:25:12,639
Speaker 1: just be for luxury customers. I mean put plenty of

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00:25:12,720 --> 00:25:15,400
Speaker 1: youngsters out there, you know, save all you're just by

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00:25:15,440 --> 00:25:17,359
Speaker 1: their yeasies or what. How do you you know that

451
00:25:17,520 --> 00:25:20,600
Speaker 1: the next drop will there still be drops for brands

452
00:25:20,680 --> 00:25:23,439
Speaker 1: like that? I think? So I think that that's going

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00:25:23,480 --> 00:25:26,199
Speaker 1: to be a challenge because of all this uncertain it.

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00:25:26,200 --> 00:25:30,080
Speaker 1: It's kind of a clouded market and it's everybody's getting bombarded, right,

455
00:25:30,119 --> 00:25:33,280
Speaker 1: so so things think about you, you've spent since last spring,

456
00:25:33,880 --> 00:25:36,159
Speaker 1: you know, hold up in your home with your family.

457
00:25:36,840 --> 00:25:39,720
Speaker 1: You've been bombarded with you know, a lot of director

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00:25:39,760 --> 00:25:42,520
Speaker 1: consumer marketing firm brands themselves. So so how do you

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00:25:42,680 --> 00:25:45,040
Speaker 1: cut through the clutter? You know? And the luxury brands,

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00:25:45,400 --> 00:25:47,399
Speaker 1: you know, do that they have their loyal following. But

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00:25:48,000 --> 00:25:49,920
Speaker 1: you know, there's a lot of research out there just

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00:25:50,080 --> 00:25:53,399
Speaker 1: recently from uh, you know, de Lloyd and other companies

463
00:25:53,440 --> 00:25:56,800
Speaker 1: Adobe that kind of shows that that shop is particularly

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00:25:56,960 --> 00:26:00,200
Speaker 1: you know, gen Z and millennials are have tried new

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00:26:00,320 --> 00:26:04,120
Speaker 1: brands during COVID right, so they're moving away, so there's

466
00:26:04,320 --> 00:26:06,879
Speaker 1: a little bit less loyalty and because this stuck or

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00:26:06,920 --> 00:26:08,800
Speaker 1: something they was stuck in behind, they were like, I'll

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00:26:08,840 --> 00:26:11,920
Speaker 1: give that a shot. So if you'll luxury branding new

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00:26:11,960 --> 00:26:14,520
Speaker 1: youth to that, yea, you know, I don't know. Arthur,

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Speaker 1: Thank you so much for joining us. We always appreciate

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Speaker 1: your thoughts into the retail space. Arthur Zechowitz, executive editor,

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00:26:20,000 --> 00:26:22,080
Speaker 1: Woman's Where Daily, giving us his thoughts say, back to

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00:26:22,160 --> 00:26:25,880
Speaker 1: school really key for retailers. A lot of uncertainty this year.

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Speaker 1: We'll see how it plays out for the retail space.

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Speaker 1: Thanks for listening to the Boomberg Markets podcast. You can

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00:26:32,680 --> 00:26:36,359
Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever

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00:26:36,560 --> 00:26:39,879
Speaker 1: podcast platform you prefer. I'm Bonnie Quinn. I'm on Twitter

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00:26:40,119 --> 00:26:42,400
Speaker 1: at Bonnie Quinn, and I'm Paul Sweeney. I'm on Twitter

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00:26:42,520 --> 00:26:45,320
Speaker 1: at pt Sweeney. Before the podcast, you can always catch

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00:26:45,440 --> 00:26:46,960
Speaker 1: us worldwide at Bloomberg Radio.