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. As it happened, Sloomberg
Speaker 1: Business Week with Carol Messier and Bloomberg Quick Takes. Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. Tim. I gotta say it
Speaker 1: was another crazy week, another ballatole week, and then we
Speaker 1: had that hot inflation print that had us all thinking
Speaker 1: is it peak or is it not peak? Yeah, that's
Speaker 1: the question that remains, and we have a great group
Speaker 1: of people to help really break down and help us
Speaker 1: find some answers, starting with legendary investor Alan patrick Off
Speaker 1: from Greycroft Carroll. He. I mean, look, it's fair to
Speaker 1: say that he's seen a cycler to write early investor
Speaker 1: in Apple, so he knows what's up with markets like this,
Speaker 1: and he had an interesting perspective on some of the
Speaker 1: tech sell off that we've seen in some of those
Speaker 1: well known names. Plus we're going to get a good
Speaker 1: check on the consumer. The CEO of Tapestry talking about
Speaker 1: our company's latest earnings, little hint they've been raising prices.
Speaker 1: All of that to come. We begin, though, with a
Speaker 1: Bloomberg Big Take this week and this week's issue of
Speaker 1: Bloomberg Business Week. It's an incredible piece to view online.
Speaker 1: It's interactive, it's really well told visually, so I encourage
Speaker 1: everybody to check it out. It's all about exploring Japan's
Speaker 1: front lines. It's where for millions of Japanese, the confrontation
Speaker 1: between the U S and China it's already a reality.
Speaker 1: Here to explain Bloomberg Business Week editor Joe Weber along
Speaker 1: with Matt Campbell, who's Asia editor for Business Week. It's
Speaker 1: actually a series of islands, um and what's interesting. I
Speaker 1: think Americans would probably be most most familiar with Okinawa,
Speaker 1: which is one of them, and this series of islands, uh,
Speaker 1: you know, you end up closer to Shanghai and mainland
Speaker 1: China than to Tokyo, which is pretty incredible when you
Speaker 1: see it on a map. And I do recommend reading
Speaker 1: it online because the immersive experience that we built for
Speaker 1: this story is pretty incredible. And what's interesting is obviously
Speaker 1: the tensions between US and China have been palpable and
Speaker 1: if anything, have been simmering and during the trumpet aministration
Speaker 1: escalated UH. And this is like a little quiet area
Speaker 1: that's right next to Taiwan. As we've been talking about
Speaker 1: Ukraine and the tensions there, obviously a lot of UH
Speaker 1: tai Taiwan UH interest has been peaked, I think. And
Speaker 1: what's really interesting about these islands is, you know, there's
Speaker 1: this demographic crisis in Japan. UH don't have enough workers.
Speaker 1: A lot of the workers that they would have on
Speaker 1: these islands have traditionally come from China, and obviously with
Speaker 1: zero COVID China has not had that. That means there's
Speaker 1: now tourism dollars coming from China as well. And obviously
Speaker 1: there's a huge American military presence there, which makes all
Speaker 1: of this really interest because this is this is a
Speaker 1: frontline right even though there isn't an active conflict, that
Speaker 1: doesn't mean that there isn't tension and that it's all
Speaker 1: rooted right in this place, and it has some really
Speaker 1: interesting and fascinating domestic implications for for Japan and geopolo
Speaker 1: politics and even American foreign policy. So so, Matt, what
Speaker 1: was the thing, the initial thing that sparked your interest
Speaker 1: about what Yoshi set out to tell him this story. Well,
Speaker 1: I always look for what I call small stories that
Speaker 1: tell big stories of ways to go to one place
Speaker 1: or one company, or one series of events, and then
Speaker 1: go from there into a better understanding of big, mega trends.
Speaker 1: And what's cool about this story is Yoshi, fabulous reporter
Speaker 1: in Japan who put this together, was he found the
Speaker 1: series of communities in Japan which are struggling with the
Speaker 1: exact same problem that Japan as a whole has, which is,
Speaker 1: on the one hand, economic dependence on China and in
Speaker 1: fact growing economic dependence on China, but a deepening security
Speaker 1: alliance with the US. And obviously there's a contradiction there. Well,
Speaker 1: and you know, part of what I have to say,
Speaker 1: as I was reading through it was really stark for me.
Speaker 1: And where you said where he said, you know, should
Speaker 1: a war come between the US and China basically and
Speaker 1: unlikely but increasingly plausible Senar scenario because what's going on
Speaker 1: in Ukraine, Like I don't even I mean I do
Speaker 1: think about it, but not and I feel like you realize, Okay,
Speaker 1: how vulnerable or how how this might play out ultimately, Matt, Well, indeed,
Speaker 1: and Japan something that that is very apparent if you
Speaker 1: go back in the history a little bit, is Japan
Speaker 1: is deeply involved in the Taiwan issue, but Taiwan was
Speaker 1: a Japanese colony from until ninety Actually, in Taiwan there
Speaker 1: are somewhat fonder feelings about Japan than there are many
Speaker 1: parts of Asia. Japanese governments have said in various terms
Speaker 1: that they view the security of Taiwan as a strategic interest.
Speaker 1: So if things really kick off, Japan will absolutely be
Speaker 1: part of the story. What's happening militarily on the on
Speaker 1: the islands, well, there are two things happening. One is,
Speaker 1: Japan is an increasingly strong military power. Military spending in
Speaker 1: Japan has increased dramatically over the last decade or two,
Speaker 1: and we'll continue to do so. And the other thing
Speaker 1: is as the US pivots more of security strategy toward
Speaker 1: containing China, a huge amount of that investment ends up
Speaker 1: in Japan overall, and particularly in places like Okinawa, which
Speaker 1: has something like seventy U S military bases on one island,
Speaker 1: if you can imagine that. So, so really this is
Speaker 1: the front line of geopolitical conflict. Yeah. One of the
Speaker 1: things that interests me about the story was a parallel
Speaker 1: with Germany, which obviously Germany has had no military spending
Speaker 1: since World War Two. Now it's established that it will
Speaker 1: be a big presence. One of the surprising elements to
Speaker 1: me about this is Japan. It was sort of in
Speaker 1: a similar role, except that spending his increased as has
Speaker 1: its alliance in the US. So, Matt, how has that
Speaker 1: played out domestically in recent years in Japan? Well? So,
Speaker 1: Japan under its post war constitution, which was actually drafted
Speaker 1: by the US military, has a clause that says, in
Speaker 1: as many words, Japan and will not have armed forces.
Speaker 1: That has never really been observed. It's always in the
Speaker 1: post war era had a military. That military is now
Speaker 1: growing in seemingly well funded, increasingly oriented towards containing China
Speaker 1: in very forceful ways should the need arise. That was
Speaker 1: Bloomberg's Matt Campbell, along with Business Week editor Joe Weber,
Speaker 1: coming up coach Kate Spade, Stuart Whitesman. You've heard of
Speaker 1: those brands have all right, Well, they're all under the
Speaker 1: Tapestry umbrella and they wait in with their latest quarterly update,
Speaker 1: and also talked about the outlook. We're gonna get an
Speaker 1: update from Tapestry's CEO. You're listening to Bloomberg Business Week.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes Tim Stenoby from Bloomberg Radio. Tapestry,
Speaker 1: you know the brand, well, they owned Coach, Kate Spade,
Speaker 1: and Stuart Whitesman. They came out with their quarterly update
Speaker 1: this week. They talked about prices, they talked about the outlook,
Speaker 1: and they also talked about China. And we got to
Speaker 1: check in with the company's CEO, joe An crevoice Ran
Speaker 1: and she joined us to give us her take on
Speaker 1: earning season, and really, let's understand the health of the
Speaker 1: American consumer in the global consumer right so important to
Speaker 1: our economy. What we're seeing in our business is strength
Speaker 1: and momentum across our business. As you mentioned, our third
Speaker 1: quarter outperformed, led by strength in North America, and we
Speaker 1: drove double digit global sales growth across all of our
Speaker 1: brands at Coach, at Cape Spade, and at Stuart Whitzman.
Speaker 1: And you know, Tapestry is a powerful combination of iconic
Speaker 1: brands that offer tremendous value for consumers. And we have
Speaker 1: a platform that we've transformed to drive innovation and customer engagement,
Speaker 1: and that model is delivering results. We're seeing that in
Speaker 1: the strength of our digital business, increased customer acquisition and
Speaker 1: pricing power across brand. So a lot of things are
Speaker 1: are working and performing, and it really reflects the strategies
Speaker 1: that we've put in place over the last few years,
Speaker 1: UM to stay closer to consumers and drive growth behind
Speaker 1: our our powerful brands. So we want to dig deeper
Speaker 1: into that. But let me ask you, if you had
Speaker 1: to describe the consumer in a word or a few words,
Speaker 1: how would you do it? And would you say that
Speaker 1: the consumers back at pre pandemic levels or maybe even better,
Speaker 1: are still a little bit under it. Yeah, the consumer
Speaker 1: is quite resilient. UM. You know, we've been driving growth
Speaker 1: above pre pandemic levels for several quarters, UM. And you
Speaker 1: know that's that's most apparent in our Coach brand, where
Speaker 1: we've had more quarters in a row, but also true
Speaker 1: at Cape Spade and its Stuart Whitzman and UM. You know,
Speaker 1: our business in the third quarter reflects really the strength
Speaker 1: and momentum we're seeing around the world. You know, we
Speaker 1: talked about our growth in North America. We drove growth
Speaker 1: in North America in the last UH in the last
Speaker 1: quarter UM. But we also saw strength around the world
Speaker 1: in all areas except for China. So we saw strength
Speaker 1: in Europe UM and strong growth in rest of Asia
Speaker 1: as well as in Japan. So UM business is performing UM.
Speaker 1: In fact, even in China going into the quarter, we
Speaker 1: saw strength and and UM. You know that business only
Speaker 1: started to weekend when we saw the disruption related to
Speaker 1: COVID in the market towards the end of the quarter. Joann,
Speaker 1: I want to I want to hit on the China
Speaker 1: point and dig into that a little bit, because you
Speaker 1: had to have in North America, you overcame pandemic related
Speaker 1: weakness in China when you look at the results overall.
Speaker 1: But I'm but I'm wondering from a planning perspective, how
Speaker 1: you're thinking about how long these lockdowns last and how
Speaker 1: long you're going to see that weakness in China where
Speaker 1: business has just dried up since this resurgence of COVID. Yeah,
Speaker 1: the business was disrupted, but it was disrupted in a
Speaker 1: very discrete way. UM. You know, by the by the
Speaker 1: impact of COVID in the market. And you know, our
Speaker 1: business has been quite resilient over the last two years.
Speaker 1: As I said, you know, we've been driving growth above
Speaker 1: pre pandemic levels for some time, UM, and that shows
Speaker 1: the resilience of our model and the way that we're
Speaker 1: able to shift. UM two changes that we're seeing in
Speaker 1: demand and changes in the supply chain and supply around
Speaker 1: in the world. And our latest disruption has been in China.
Speaker 1: But as as I mentioned, we had strength in the
Speaker 1: market and we've been driving strength as as China came
Speaker 1: out of the first round of lockdowns, the consumer was
Speaker 1: incredibly resilient to in. There's so much stress out there.
Speaker 1: It feels like certainly when we watch the financial markets,
Speaker 1: right and we look at some individual names, even though
Speaker 1: your stocks rallying, it's down about this year, but it's
Speaker 1: it's broad based selling. It feels like no market or
Speaker 1: sector is immune. It certainly seems in the stocks sell off.
Speaker 1: You sound pretty calm, and you sound I don't know,
Speaker 1: is it cautiously optimistic optimistic? UM, help me understand fundamentally
Speaker 1: what the outlook looks like. That might you know, I
Speaker 1: think we're all trying to figure out what is the
Speaker 1: outlook amid a rising rate environment and what is the
Speaker 1: business environment and what's the market environment? Um becauld You
Speaker 1: seem pretty calm, Yeah, well, and we are optimistic. We're
Speaker 1: very confident. You know, we have such iconic brands in
Speaker 1: our in our portfolio, and our focus has been on,
Speaker 1: you know, restoring the health of our brands and driving
Speaker 1: better and stronger engagement with consumers. And when we do that,
Speaker 1: the business perform. So we're really focused on fundamentals UM
Speaker 1: and you know when we talk about transformation, actually I
Speaker 1: heard you discussing investment UM in the business in the
Speaker 1: in the show just prior to when I came on.
Speaker 1: You know, we're investing, and we're investing in digital tools
Speaker 1: and innovation and technology that's making us better. And as
Speaker 1: we focus on the fundamentals, we're seeing traction. We're engaging customers,
Speaker 1: were acquiring more customers. We acquired one point four million
Speaker 1: customers in the last quarter alone, and since we've embarked
Speaker 1: on our transformation, we've acquired thirteen million new customers to
Speaker 1: our brands over the last twenty one months. And these
Speaker 1: are customers who are coming in and engaging with our brands.
Speaker 1: They're shopping at higher au are higher prices than average,
Speaker 1: and they're coming back more frequently, um And the customers
Speaker 1: are also increasingly younger. So as we focus on the
Speaker 1: fundamentals of our business, it gives us confidence because we're
Speaker 1: seeing much stronger engagement, much healthier brands, and much stronger
Speaker 1: engagement with our consumers. Joann, I'm wondering about your pricing
Speaker 1: power because you said that there these customers are paying
Speaker 1: more than they were paying earlier. How much of that
Speaker 1: has to do with inflation? Where where are you seeing
Speaker 1: a rise in costs right now on your production end
Speaker 1: and in your supply chain, And how much are you
Speaker 1: absorbing of that versus passing it along to the customer,
Speaker 1: Because as Nil Saunders, an analyst with Global Data set
Speaker 1: in a note after your results, Uh, the customers that
Speaker 1: you have at Tapestry can cope better with inflationary impacts
Speaker 1: than the average customer. Yeah. And the way we think
Speaker 1: about our pricing power is really in terms of delivering
Speaker 1: value to consumers um And, and that's how we've been
Speaker 1: thinking about In fact, we started this pre pandemic before
Speaker 1: we started to see pressure on the cost side of
Speaker 1: the equation, and those pressures are real. We're seeing pressure
Speaker 1: on the cost side of the equation. Like others in
Speaker 1: the industry, UM a lot of pressure in freight related
Speaker 1: to the supply chain dislocations that we're seeing, but our
Speaker 1: focus really on the pricing side of it, and the
Speaker 1: pricing powers really driven by the value we're delivering to
Speaker 1: consumers and those emotional connections that we're developing are allowing
Speaker 1: us to drive pricing power, and we're seeing that across
Speaker 1: our brands. You know, some of the investments we've we've
Speaker 1: made and tools and technology or helping us leverage data
Speaker 1: better in across our value chain, so that's making us
Speaker 1: more informed on pricing decisions. It's also making us more
Speaker 1: informed on our assortment decisions and our inventory management, so
Speaker 1: we've got the right inventory. We're seeing higher skew productivity
Speaker 1: UM with more concentration behind more powerful items, and that
Speaker 1: allows us UM to drive pricing power as well and
Speaker 1: to clarify our messages with consumers. So on the value
Speaker 1: side of the equation, we continue to deliver unbeatable value
Speaker 1: for our consumers across all of our brands, and that's
Speaker 1: helping us more than offset the pricing pressure that we're
Speaker 1: seeing UM in terms of cost. In terms of our
Speaker 1: expectations going forward. That was Joanne kravoice Rat, the CEO
Speaker 1: of Tapestry. Still ahead on Bloomberg Business Week, measuring and
Speaker 1: tracking how we watch, where we watch media and apps,
Speaker 1: a company that does it all increasingly important, Carol, because
Speaker 1: now we're talking about ads with Disney Plus and of
Speaker 1: course with Netflix. We're gonna be joined by the president
Speaker 1: of TV squared by in event on the changing patterns
Speaker 1: of target consume media broadcasting from the financial capital of
Speaker 1: the world, Bloomberg eleven Frio in New York to Washington,
Speaker 1: d C. Bloomberg to Boston, Bloomberg one oh six one
Speaker 1: does San Francisco, Bloomberg nine sixty to the country Sirius
Speaker 1: XM Chado one nine team and around the globe the
Speaker 1: Bloomberg Business app and Bloomberg Radio dot com. This is
Speaker 1: Bloomberg Business Week, alright, So how are we view and
Speaker 1: listen to media? Right? Like? I don't even know how
Speaker 1: you're doing it right now? Are you on your phone
Speaker 1: right now listening to us? Are you on Bloomberg Radio
Speaker 1: listening through tune in on? So nos, exactly right. There's
Speaker 1: so many different ways, there's many options, and increasingly all
Speaker 1: of this is converging and our next guest gets that
Speaker 1: big time. It's Joe can sella president of TV squared
Speaker 1: by Innovative. This is a global measurement and attribution platform
Speaker 1: for converged TV. Essentially, it means that it measures audiences
Speaker 1: in a in a media world that's coming together right now,
Speaker 1: so people who consume media via different platforms like smart
Speaker 1: TV and set top boxes. Thank you so much for
Speaker 1: having me, guys, it's great to be here. Well, I
Speaker 1: just want to get your your takes before we get
Speaker 1: right into the analytics here. I just want to get
Speaker 1: your take on the streaming environment because we did see
Speaker 1: that Disney beat expectations when it came for Disney Plus subscribers,
Speaker 1: shares moving higher in the after hours. Different story than Netflix.
Speaker 1: And I'm just wondering how you would characterize the environment
Speaker 1: right now, because it's it's interesting like this incumbent Disney
Speaker 1: that Netflix disrupted. Uh now Net is on the other
Speaker 1: side of that with shares down, you know, more than
Speaker 1: seventy from its highs last year. Yeah, A vod is
Speaker 1: definitely the cool kid. So I think you know, Netflix
Speaker 1: held out as long as it could, and you know
Speaker 1: they they held off from bringing ads in for the
Speaker 1: longest time, and then we saw the fluctuations with the
Speaker 1: share price, and here we are. I have not had
Speaker 1: any early indication as to what the Netflix offering is
Speaker 1: going to be, UM, but you know, thinking that it's
Speaker 1: probably going to be the same as or similar to
Speaker 1: what everyone else is doing. But you asked me, Tim,
Speaker 1: you know, to describe the streaming world right now, I
Speaker 1: think I can use a very nice British term, which
Speaker 1: is bonkers um. And you know, the latest statistics that
Speaker 1: were that we're seeing because TV squared by Innovid actually
Speaker 1: measures linear and streaming, but streaming is actually now accounting for,
Speaker 1: according to the I A B about twenty one point
Speaker 1: two billion dollars worth of TV inventory. So it's really
Speaker 1: we've seen this massive transformation and shift to CTV during COVID.
Speaker 1: Help me out, though a number a loan doesn't always
Speaker 1: give you perspective. So twenty one point two billion in
Speaker 1: TV inventory, what percentage is that in terms of streaming?
Speaker 1: Look at it this way, Carol, It's a seventy billion
Speaker 1: dollar universe in the US. It's about two hundred billion globally,
Speaker 1: so it's small. I would say if you look at
Speaker 1: local television So you think about local broadcast local cable
Speaker 1: in the US that is also twenty two billion, and
Speaker 1: think about how old, um, that kind of industry has
Speaker 1: been in existence, you know, thinking about the cable companies
Speaker 1: and everything else. So if you think that CTV is
Speaker 1: now the same size as local broadcast on local cable,
Speaker 1: it's really come from nowhere. And at the end of
Speaker 1: the day, everybody is now watching TV in such a
Speaker 1: different way that we're going to continue to see this
Speaker 1: this huge growth in CTV. Joe, how does the technology
Speaker 1: at TV squared by innovd work Because when you talk
Speaker 1: about a streaming the streaming landscape, it's really fractured in
Speaker 1: terms of that end user and how the end user
Speaker 1: gets that signal could be on a row who, it
Speaker 1: could be on his Amazon fire Stick, it could be
Speaker 1: on a smart TV by l G or Sony. So
Speaker 1: the data is really disparate, and I'm wondering what technology
Speaker 1: you have to be able to provide companies that are
Speaker 1: looking for this data with accurate info. Yeah, it's a
Speaker 1: great question, um, and one that we've tried to solve
Speaker 1: tim in software. We believe that the only way that
Speaker 1: you can solve for the challenges of the modern day
Speaker 1: advertiser is to be global um and to have a
Speaker 1: solution that is software based that truly scales. And that's
Speaker 1: easy to say, but it's actually harder to do. What's
Speaker 1: been amazing about the recent acquisition by Innovid is that
Speaker 1: we've basically been able to kind of superpower our measurement,
Speaker 1: which is, think about it this way. Innovid has a
Speaker 1: ad server that delivers ads for the of the top
Speaker 1: two hundred advertisers. What does that mean. That means everything.
Speaker 1: That means about a billion ads a day UM, and
Speaker 1: it means that we can take every impression that gets
Speaker 1: served and pump it straight into TV squared and either
Speaker 1: map it to like who did I reach, what was
Speaker 1: the audience demo? And did they take an action? So
Speaker 1: I want you to think of this as we've done
Speaker 1: the hard bit. We've done the stitching together of all
Speaker 1: of these different platforms, and because Innovid actually delivers the
Speaker 1: ad we can see if it's a show that runs
Speaker 1: on Peacock, on a Roku device, on a Sam's on TV,
Speaker 1: we can still see that impression. Therefore, for ours, what's
Speaker 1: beautiful is there's no walled gardens and we're independent. So
Speaker 1: if you're an advertiser, everyone's calling us saying, hey, wait
Speaker 1: a second, you can see all the way through the
Speaker 1: customer journey. What happened? That's Joe can Sella, the president
Speaker 1: of TV squared by inn of It. You are listening
Speaker 1: to Bloomberg Business Week More to Come. You know the
Speaker 1: name venture capitalist Alan patrick Of. He checked in with
Speaker 1: us about today's market volatility as well as opportunity. You've
Speaker 1: had a career that's bounced fifty years. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes. Tim Stinovich from Bloomberg Radio. All right,
Speaker 1: with all the market volatility again this week. I mean
Speaker 1: it's really been the theme of market volatility. So we
Speaker 1: recently caught up with a perfect guest to talk about it.
Speaker 1: He has seen a lot of market cycles. Fair to
Speaker 1: call him legendary Alan patrick Off an early VC. He
Speaker 1: helped build and grow such companies as America Online, Office Depot,
Speaker 1: a little company called Apple Audible as well. He's the
Speaker 1: chairman emeritus and co founder of gray Croft. He's also
Speaker 1: got a new book out, Carol. It's called no red lights.
Speaker 1: Reflections on life fifty years in venture capital and never
Speaker 1: driving alone. You know, everybody I meet has lived for
Speaker 1: such a short time relatively in this market that they
Speaker 1: only see everything going up. And I've lived through so
Speaker 1: many cycles that to me, this was inevitable. It's going
Speaker 1: to come. Everybody was living in a euphoric state that
Speaker 1: things are only going to go up. And I think
Speaker 1: you better be prepared for some kind of hiccup. And
Speaker 1: I don't know why it's going to happen, but that's
Speaker 1: just the way the markets work. How big of a
Speaker 1: hiccup and how long of a hiccup, Well, I think
Speaker 1: it depends on what the after fall is after the
Speaker 1: this initial setback. You know, well the market stabilizer is
Speaker 1: it gonna, you know, after a certain period of time,
Speaker 1: go down again. I mean the levels that the markets
Speaker 1: at has just been increasing steadily until the beginning of
Speaker 1: this year. I mean last year was dramatic. The whole
Speaker 1: Trump era was dramatic. I always follow the theory the
Speaker 1: markets stone like surprises, and all we had with surprises
Speaker 1: for four years and the market kept going on. So
Speaker 1: I think we've got an after effect of that. And uh,
Speaker 1: I just say one thing, This is not the time
Speaker 1: to sell. I think you've got to ride the rocky
Speaker 1: periods and watch how and see how it stabilizes. Even
Speaker 1: a name like you know you've got Meta um uh
Speaker 1: you meta platforms? Right? You know? Facebook um down about
Speaker 1: this year. We were talking about Netflix before we got going.
Speaker 1: It's down almost since April nineteen when it just freaked
Speaker 1: out the markets right when it came down with a
Speaker 1: lack of subscriber growth. So I don't know, how do
Speaker 1: how do we make sense of some of that? Is
Speaker 1: that opportunity to you or is it like there's some
Speaker 1: there's something wrong. Well, if I were following public markets,
Speaker 1: I'd be looking very carefully for where the opportunities are
Speaker 1: in terms of companies that have relatively good values in
Speaker 1: relation to their revues and their profits, and which ones
Speaker 1: have the balance sheets that are going to sustain themselves
Speaker 1: no matter what happens to interestates. But in terms of
Speaker 1: Meta and Google and Apple, I think we're going through
Speaker 1: a period where, for finally, the Congress are now focused
Speaker 1: on the monopoly positions that these companies have, and there's
Speaker 1: legislation pending, and I think that it's it's it's long
Speaker 1: been long and company really and coming. You realize that
Speaker 1: the old the Internet has not had any regulation. There's
Speaker 1: been no regulation in twenty five years. We're living with
Speaker 1: outdated monopoly laws. And I think that Europe has just
Speaker 1: passed some very significant laws and the US is gonna
Speaker 1: follow I think very shortly, and that is an overhang.
Speaker 1: Very curious about your thoughts on this does them and
Speaker 1: compoly power that you argue that some of these big
Speaker 1: tech companies have to what extent does that stifle innovation
Speaker 1: when it comes to startups? Of course it does. I mean,
Speaker 1: you know, I can't tell you the number of companies
Speaker 1: I've been on the board of where I'm going to
Speaker 1: a board being and they'd say traffic was down or
Speaker 1: twenty whatever the percentages. Why Google change their algorithms? I mean,
Speaker 1: that's monopoly if I've ever heard it. I mean, we
Speaker 1: are original monopoly lawyers were related to control of the railroads,
Speaker 1: the control of of of oil. UH. Now we're seeing
Speaker 1: a different kind of monopoly control, and that is, you know,
Speaker 1: when you have ninety percent of your search going through
Speaker 1: one vehicle, UH, and when people are putting their own
Speaker 1: internal products and offerings ahead of other products that are
Speaker 1: available that's monopoly get hurt. Yeah, ultimately, of course they are. Well,
Speaker 1: let's put this way. The advertisers are getting hurt. The
Speaker 1: competitive businesses are getting hurt. Uh. And I think everybody
Speaker 1: is mesmerized by you know, one day delivery and uh
Speaker 1: getting low prices. But at the same time it's hurting
Speaker 1: a lot of small businesses. Elon musk and Twitter, what
Speaker 1: do you think about that it worries me? One person?
Speaker 1: This is this is the major social media uh communication
Speaker 1: platform all of us. Maybe not all of us, but
Speaker 1: a lot of us certainly use it. Uh. And to
Speaker 1: have one person and this will be a private company also,
Speaker 1: I think it's again another element that I would be
Speaker 1: concerned about. And I think it's also going to be
Speaker 1: subject whatever government potential government regulation. I mean it hasn't
Speaker 1: he hasn't going through this process yet. I think that
Speaker 1: we still may see some headwinds that may slow this
Speaker 1: down or prevent it. I don't think it's good for society.
Speaker 1: So talk to us about this book. We were reminding you,
Speaker 1: we talked about this that when you were on last
Speaker 1: with us, which was a few months um, you actually
Speaker 1: leaked that you are coming out with a new book.
Speaker 1: So why did you write this? Yeah? I mean I
Speaker 1: have been asked for a long time to write a
Speaker 1: book because I've been in the business. You know, by
Speaker 1: being in a business fifty years, you become, you know,
Speaker 1: first year the father of venture capital. Then you're the
Speaker 1: grandfather of venture capital. Then that's the legendary Alan Patrickov,
Speaker 1: so you know, being a legend. I wrote it because
Speaker 1: for two reasons. One was I thought it might be
Speaker 1: valuable and why I gave the title no Red Lights. Uh.
Speaker 1: I've lived a multidimensional life and I feel that that's
Speaker 1: a valuable idea to convey to younger people about don't
Speaker 1: get lost in your own, you know, small world, be
Speaker 1: open to opportunities and get involved in politics, get involved charities,
Speaker 1: get involved in art. And I've done all of these
Speaker 1: things and there's not much that I haven't been involved
Speaker 1: in or that I'm not open to. I live a
Speaker 1: very active, multidimensional life and always have. I thought that
Speaker 1: spirit would be valuable to convey. Plus, I saw what
Speaker 1: was happening to older people who are you know, kind
Speaker 1: of checking out because of retirement ages being forced on
Speaker 1: them at sixty or they sold their company, and they
Speaker 1: go to Florida and they started playing golf. And I
Speaker 1: was saying, as I started my first company at thirty six,
Speaker 1: my second company at seventy two, and two years ago,
Speaker 1: I decided to start Prime Time Partners at eighty five,
Speaker 1: and I thought that I wanted to be a poster child.
Speaker 1: You know, I'm now eighty seven. I thought it would
Speaker 1: be kind of inspirational. I don't want to overdo it,
Speaker 1: but that people who might read it say, listen to
Speaker 1: this guy can do it. You know, why can't I
Speaker 1: do it? Why can't I? Maybe if I only inspire
Speaker 1: one person to say, you know, I'm going to follow
Speaker 1: that lead and take on some new challenge, go back
Speaker 1: in the same business I've been, only do it all
Speaker 1: over again. The sub headline of the book is Reflections
Speaker 1: on Life, fifty years in venture capital and Never Driving Alone.
Speaker 1: What do you mean by never driving alone? Is that
Speaker 1: everything in life is cumulative, where we don't get where
Speaker 1: we are by doing things by ourselves. It's I find
Speaker 1: it's very valuable to always be a partnership with people
Speaker 1: and whatever you do. And I follow a very collegial
Speaker 1: approach to everything I've done, and I find it a
Speaker 1: good practice to be open to meeting new people at
Speaker 1: all stages. Uh. And as I say, life is cumulative,
Speaker 1: and the people you meet early on in your career,
Speaker 1: they come back at you again and again. And I
Speaker 1: can tell you that which I say in this book.
Speaker 1: Many of the people I met when I was very
Speaker 1: young in this business are all running some of the
Speaker 1: major companies in this country are certainly certainly in the city,
Speaker 1: but in the country. And I say to everybody, turn
Speaker 1: to your left and turn to your right. You just
Speaker 1: don't know where someone's going to end up. And you
Speaker 1: and you developed those associations and relationships, and I find
Speaker 1: that that that's been very helpful in my life. You know, Alan,
Speaker 1: I think many would argue, you know, certainly coming out
Speaker 1: of the pandemic, and we just saw the speed of
Speaker 1: change and innovation pick up so much momentum because companies
Speaker 1: had to for survival, whether it's digitization or you know,
Speaker 1: we talked about digital medicine, like just so many different
Speaker 1: things and how we shopped just so many things kind
Speaker 1: of just picked up so much momentum. But there was
Speaker 1: many would argue a lot of innovation during what was
Speaker 1: a very very difficult time and I just wonder when
Speaker 1: you have looked at innovators over fifty years, like, what
Speaker 1: is it that stands out from somebody, whether it was
Speaker 1: an Apple or another company, that you just knew that
Speaker 1: this was somebody or an institution that was on the
Speaker 1: cusp of doing something very differently. Well, you know, no
Speaker 1: one uh has that much foresight that they can pick
Speaker 1: when years all the time because as part of the
Speaker 1: business that there are a lot of losers in the
Speaker 1: in the process. But you know what you'd like to
Speaker 1: find is someone with who's right, got a vision and
Speaker 1: who's passionate about what they do. Uh. And I think
Speaker 1: that is fundamental to being really successfully. I mean, you know,
Speaker 1: Mark Zuckerberg was a perfect example who was a passionate person.
Speaker 1: Sergey and Larry were passionate. Steve Jobs was passionate. I
Speaker 1: think that if you're driven, uh, that has a lot
Speaker 1: to do not just knowing the technology, but have a
Speaker 1: vision of what you want to do. And I one
Speaker 1: of the things that concerns me is I give a
Speaker 1: lot of lectures or courses in colleges every now and then,
Speaker 1: and UH, when you ask people in these business schools,
Speaker 1: you know, how many of you gonna start a business.
Speaker 1: You know, three quarters of the class raise their hand
Speaker 1: and they have no passion really about what they want
Speaker 1: to do. They're doing it because someone in the previous class,
Speaker 1: UH started and made five million dollars and sold their company,
Speaker 1: and they figured if they did it, why can't I
Speaker 1: do it? So as a result, they started a new
Speaker 1: dog watching company or a new delivery company. And so
Speaker 1: we have a lot of a lot of repetition and
Speaker 1: not as much originality in the in the startup and
Speaker 1: uh an innovation as we'd like to frankly, as i'd
Speaker 1: like to see. You know, most things today are applications
Speaker 1: of existing technologies. That's great croft Alan Patrickov really well
Speaker 1: known venture capitalists and someone who has seen so much.
Speaker 1: If you missed any of the conversation, I want to
Speaker 1: hear the full conversation. Just check out our podcast at
Speaker 1: Bloomberg dot com. And that reps up the first hour
Speaker 1: of the weekend edition of Bloomberg Business Week from Bloomberg Radio.
Speaker 1: I'm Carol Masser and I'm tostead of coming up in
Speaker 1: our next hour, Barista's Unite the unionization of Starbucks. It's
Speaker 1: the cover story in the magazine this Week, plus well
Speaker 1: known chef Danielle Balou on the state of the restaurant industrating.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week inside from
Speaker 1: the reporters and editors who bring you America's most trusted
Speaker 1: business magazine. Plus global business, finance and tech news as
Speaker 1: it happened. S Bloomberg Business Week with Carol Messier and
Speaker 1: Bloomberg Quick Takes, Tim Stinovic on Bloomberg Radio. Plenty of
Speaker 1: hand our second hour of the weekend edition of Bloomberg
Speaker 1: Business Week, including the look at the state of the
Speaker 1: restaurant industry, especially in New York City. We'll do that
Speaker 1: with a claim chef Danielle Blue He's actually opening up
Speaker 1: a new restaurant. Plus a look at the current edition
Speaker 1: of Bloomberg Pursuits. We've got art in there, We've got
Speaker 1: theater in there, We've got music in there, plus the
Speaker 1: books of the summer. I love that list. First up
Speaker 1: this hour, though, we do want to get to the
Speaker 1: cover story of Bloomberg Business Week. It's on the Starbucks revolution,
Speaker 1: with a push toward unionizing baristas. We caught up with
Speaker 1: the editor of the magazine, Joel Webber, and the reporter
Speaker 1: on the story josh Idolson, Joel, I want to start
Speaker 1: with you because this is the third time that Howard
Speaker 1: Schultz has been at the home of Starbucks. Does the
Speaker 1: Starbucks that he found when he returned just about a
Speaker 1: month ago as CEO. The surprise I think that probably
Speaker 1: awaited him um was one that he was not probably
Speaker 1: familiar with from his other stints, which was this newfound
Speaker 1: power that the labor has and Starbucks, which I found
Speaker 1: really surprising. The workers of Starbucks have you know, for
Speaker 1: all of this talk about unionization sweeping the country right now,
Speaker 1: Amazon being one that we've talked about extensively, all those
Speaker 1: all of those roads lead back to what has been
Speaker 1: happening at Starbucks, and Starbucks have been really the workers
Speaker 1: of Starbucks have been galvanizing force that a lot of
Speaker 1: other workers in corporate America have been inspired by. And
Speaker 1: and josh to his credit, saw this long ago and
Speaker 1: started reporting the heck out of it and going to
Speaker 1: as many states and and talking to as many workers
Speaker 1: who were behind the scenes without union effort. And so
Speaker 1: what you really have here is a CEO who helped
Speaker 1: build this company into a global brand comes back to
Speaker 1: it and has found that the workers aren't buying that
Speaker 1: same vision that he had laid out long ago. And
Speaker 1: you see this tension between the workers and Schultz and
Speaker 1: and it even culminates with, you know, the workers being
Speaker 1: invited to the White House Um and the company sort
Speaker 1: of saying, hey, you know we we we got cut
Speaker 1: out of this. So so Josh Um, what what do
Speaker 1: you know? You're somebody who follows um labor obviously very closely.
Speaker 1: I think Josh is like probably as good as it
Speaker 1: gets in terms of labor reporting in this country right now.
Speaker 1: And what really distinguishes the Starbucks story for a wider
Speaker 1: audience here, So in recent decades in the United States,
Speaker 1: it's pretty much unheard of for workers to win a
Speaker 1: labor board election at a company as prominent as Starbucks,
Speaker 1: where there isn't a union already and there isn't some
Speaker 1: kind of deal between the union in company to play nice.
Speaker 1: And it is being done mainly through workers mentoring each other,
Speaker 1: not just workers organizing their coworkers, but workers training other
Speaker 1: workers to train other workers, to train other workers to
Speaker 1: organize their coworkers. And that is how, as one worker
Speaker 1: put at, this ultimate group project has spread so quickly
Speaker 1: and has proven so difficult for Starbucks despite all the
Speaker 1: resources at its disposal and the goodwill that it's had
Speaker 1: to stem this movement from growing and spreading further. There
Speaker 1: are a lot of directions I want to go, Josh,
Speaker 1: but one question that continues to stick out to me is,
Speaker 1: you know, Starbucks is as corporate is very pushing back,
Speaker 1: very aggressively when it comes to these unionization efforts on
Speaker 1: an individual level, even before Howard Schultz came back, remember
Speaker 1: he flew to Buffalo to meet with those unionizing employees.
Speaker 1: What is what? What does that stake here for Starbucks?
Speaker 1: If there is widespread unionization across US stores here, to
Speaker 1: what extent does that affect Starbucks business? Well, there are
Speaker 1: two big reasons that companies tend to resist unionization, and
Speaker 1: one is money and the other is power. Of course,
Speaker 1: for the union to prove its worth two workers, it
Speaker 1: is going to need to show that it can extract
Speaker 1: things from Starbucks that workers one an otherwise get, and
Speaker 1: some of those things are going to cost money. But
Speaker 1: the other reason that companies fight unions and that they
Speaker 1: often are willing to spend a whole lot of money
Speaker 1: both on anti union consultants and on making improvements to
Speaker 1: try to modify people is that they don't want to
Speaker 1: give up that control over how the business has run.
Speaker 1: And Starbucks for years has bragged, including Howard Schultz has
Speaker 1: bragged that there's an empty chair at the board meeting
Speaker 1: that represents workers voice. So now you have workers saying
Speaker 1: why is the chair empty? Put us in the chair instead.
Speaker 1: And so for Starbucks is to become substantially unionized would
Speaker 1: mean that Starbucks executives have less unilateral ability to just
Speaker 1: decide what the business model should be, what the rules
Speaker 1: should be. And that's part of why the stakes here
Speaker 1: are so high. Josh, what happened at the company? I
Speaker 1: thought this was the one where they paid their workers
Speaker 1: as well, they had nice benefits. I mean, this is
Speaker 1: something at Chultz kind of took pride in. As you
Speaker 1: as you report what happened two different ways, and one
Speaker 1: is to say it's not as dreamy as it may sound.
Speaker 1: Even the fifteen dollar minimum pay that the workers will
Speaker 1: be guaranteed by August is not a living wage for
Speaker 1: someone with a child. In a city like Seattle, the
Speaker 1: staffing issues have been egregious at times, especially during COVID
Speaker 1: and the handling of COVID disappointed some workers and left
Speaker 1: them feeling betrayed. The other answer they would give is
Speaker 1: that it's not enough to be better than other fast companies.
Speaker 1: They believe they should have more say in their working
Speaker 1: conditions and therefore in their lives, and that there is
Speaker 1: no one particular thing that Starbucks could solve that would
Speaker 1: make them go back to being okay with the company
Speaker 1: having all the control. And where does where do things
Speaker 1: stand with Schultz? Because as you write, this is not
Speaker 1: a He's not permanently CEO right now, right He's just
Speaker 1: back on an interim basis. So where where will this
Speaker 1: dispute go? That's what they've said. They're supposed to be
Speaker 1: a permanent announcement in the fall. There are some people
Speaker 1: hoping that Schultz stays on, but it is a fight
Speaker 1: that is deeply personal for Howard Schultz. Coming up, we
Speaker 1: catch up with the CEO of Brooks on the changing
Speaker 1: landscape of running shoes and be going by someone that
Speaker 1: you might know. We're talking about Britishers who weren't bout there.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio.
Speaker 1: All right, so he has headed up Brooks Running for
Speaker 1: more than twenty years, Brooks being a century old Seattle
Speaker 1: based company that makes, as you would guess, running gear. Yeah, well,
Speaker 1: if you go back some twenty years ago, this was
Speaker 1: a company that was tinkering with bankruptcy. Also one more thing, Carol,
Speaker 1: it's a subsidiary of the standalone company of Warren Buffetts
Speaker 1: and Berkshire Hathaway, along with you know, other really well
Speaker 1: known brands like Sees Candies and Dairy Queen. The journey
Speaker 1: is all in a book by Brooks Running CEO Jim Webber,
Speaker 1: his book Running with Purpose. How Brooks outpaced goliathe competitors
Speaker 1: to lead the pack. You know, I think there's there's
Speaker 1: more uncertainty in our world, maybe than ever before for
Speaker 1: business people. And you know, there's so many things you
Speaker 1: don't control. And that's such a cliche, but it's just true.
Speaker 1: So we start with the fact that we're going to
Speaker 1: have things that we have to navigate that we don't control.
Speaker 1: And so I think the key for us has been
Speaker 1: customer focused. And I'll give you one example, Carroll. You know,
Speaker 1: and and when in March the pandemic hit. All the
Speaker 1: lights went off all retail clothes. We had no radar
Speaker 1: for demand what was going to happen. And because we
Speaker 1: were customer focused on the runner, once we saw them
Speaker 1: starting to run and buy gear, we we sort of
Speaker 1: you know, hit the gas pedal again. So so I
Speaker 1: think the key for us to navigate all these crazy
Speaker 1: times is our customer focused on the runner and disadvantaged.
Speaker 1: I think we have because it's it's it's all we do.
Speaker 1: Jim back in, it feels like years ago at this point, Uh,
Speaker 1: you moved or shed much of your presence in China
Speaker 1: this according to Reuters, and instead moved a lot of
Speaker 1: the shoe production to Vietnam. I think that for a
Speaker 1: lot of people, that looks really prescient doing that before
Speaker 1: COVID even hit. But I'm wondering if that actually managed
Speaker 1: to help you over the last two years. Because it's
Speaker 1: not just China where supply chains are are SNAr This
Speaker 1: is a worldwide issue. There's no question about it. Tim
Speaker 1: And and you know the truth of the matter is
Speaker 1: that last fall, being in Vietnam, in the south of Vietnam,
Speaker 1: where where many of our key production partners were was
Speaker 1: a tough place to be because for three months, almost
Speaker 1: half of our our production capacity did not make one
Speaker 1: shoe that was in Q three last year, and so
Speaker 1: we're we're short on inventory now, we're not delivering demands.
Speaker 1: So I don't think it matters maybe where you are.
Speaker 1: Of course, the supply chain disruption and transportation and logistics
Speaker 1: has impacted impacted everyone, no matter what your product is.
Speaker 1: So yeah, I think I think it's been super challenging.
Speaker 1: But you know, given our history, we've been through challenging
Speaker 1: times before, and so you know, our team rolled up
Speaker 1: our sleeves and we just have to roll with, you know,
Speaker 1: the changes that have come forth and do our best
Speaker 1: to keep our customers informed, and we communicate with our
Speaker 1: retail partners and runners. You know, we don't have all
Speaker 1: the product that they are demanding today, but you know,
Speaker 1: we're doing our best help them understand why. I would
Speaker 1: say though in the last several months, things have stabilized
Speaker 1: for us, you know, in our industry, and that you know,
Speaker 1: we've been pretty much running at full capacity now for
Speaker 1: over four months, so we're no more normal mode. If
Speaker 1: there's such a thing as normal in this supply chain. Well,
Speaker 1: you know we're going with we're going with smaller boats
Speaker 1: to smaller courts. Um air air freight isn't even affordable anymore.
Speaker 1: So we've just tried to navigate around, you know, the
Speaker 1: constraints that that are out there in the supply chain
Speaker 1: right now that we all have to deal with and
Speaker 1: costs your up. But you know we're because you know,
Speaker 1: again we're we're focused on the customers. So we just
Speaker 1: we're trying to do our best to navigate through that
Speaker 1: and supply demand well. And in terms of pricing, what
Speaker 1: kind of pricing pressure leverage do you have with consumers
Speaker 1: right now? And just got about forty seconds and then
Speaker 1: we're gonna come back, and I promise we're gonna talk
Speaker 1: in Yeah, I would say, we don't feel like we
Speaker 1: have a lot. We've raised prices where we could modestly,
Speaker 1: I would say, And we don't raise prices every year.
Speaker 1: So this is the first pricing increases that I think
Speaker 1: we've made on our key shoes. The adrenaline goes in
Speaker 1: probably three or four years, so so we have raised
Speaker 1: selectively some prices up. But you know, we don't think
Speaker 1: the consumer can be bear everything, so we've got to
Speaker 1: navigate that. What's the first your first exposure or interaction
Speaker 1: with Warren Buffett when he became interested in the company. Well,
Speaker 1: it goes back for me. I was reading his annual
Speaker 1: letters when I started in the business world in the eighties,
Speaker 1: so I felt like I knew him. But we were
Speaker 1: owned at the time by for the Loom, which was
Speaker 1: a Virtue Hathaway subsidiary, and we began to sell shoes
Speaker 1: at the annual meeting Expo, and so I sent him
Speaker 1: a note saying how much fun we had, and we
Speaker 1: met a lot of shareholders, we sold a lot of shoes,
Speaker 1: and he said, great, if you're ever in Omahawk, come by.
Speaker 1: We'll go have a steak. And so I went to
Speaker 1: lunch with Warren. We met for three hours and and
Speaker 1: I knew he was going to like the Brooks story
Speaker 1: because it's we're building a brand very uniquely and distinctively
Speaker 1: where a challenger brand in a great category, and it's
Speaker 1: a great business and and we've been growing at double
Speaker 1: digit now for literally for twenty years. So I knew
Speaker 1: he would he would be intrigued by the story. And
Speaker 1: it was just a wonderful meeting. And he's a sponge.
Speaker 1: He's just so curious about anything in business. And and
Speaker 1: that's the conversation, the first one that we had about Brooks.
Speaker 1: What about the conversation since I mean, how would you
Speaker 1: characterize how much you're in touch with Warren Buffett? I mean,
Speaker 1: he even himself in the forward to your book, writes
Speaker 1: that Berkshire Hathaway has followed a dramatic hands off style
Speaker 1: in its operations, with only twenty five employees, well three
Speaker 1: sixty employees go about their jobs and the many dozens
Speaker 1: of individual companies like hers. Yeah, so does he often
Speaker 1: talk to him. I believe Berkshire must be one of
Speaker 1: the most unique corporate cultures in all the world. I
Speaker 1: cut my teeth at Pillsbury, and in banking and and
Speaker 1: and then in in building brands like Brooks. But Berkshire
Speaker 1: is so unique. They never call in one sense. You know,
Speaker 1: they've described they have a very distinct acquisition strategy and
Speaker 1: investment strategy looking for great businesses. But once they buy
Speaker 1: the business, they don't. They don't require us to morph
Speaker 1: our reporting around their needs. They take all of our
Speaker 1: reporting in the way we want to look at the
Speaker 1: business and we share it with them. So so they
Speaker 1: morphed to these hundreds some different businesses, We don't morph
Speaker 1: to them. And so the only require we send them
Speaker 1: are quarterly reports and any report, much like any any
Speaker 1: public company would do. And the only required conversation is
Speaker 1: annual camp frankly and uh, and they they empower us
Speaker 1: to run the business. We love that we take full
Speaker 1: responsibility for everything that happens here, good and bad. And uh,
Speaker 1: you couldn't ask for a better home if you want
Speaker 1: to build a brand in It's wonderful. It's like our
Speaker 1: lesson is we're always told like if you don't hear
Speaker 1: from your bosses, that means you're doing your job and
Speaker 1: that's good. So it's like it's when there's problems, that's
Speaker 1: when they come. They come a knock and and they
Speaker 1: expect you to manage it and solve those problems. And
Speaker 1: we know that, so it really works. Great. What did
Speaker 1: you learn in doing this book? Because it sounds like
Speaker 1: you know you obviously when you came to the company
Speaker 1: was very different. It was, as I mentioned early, are
Speaker 1: like on the brink of bankruptcy. A lot of different
Speaker 1: heads of companies. UM tell us about that journey. Yeah,
Speaker 1: I think the reason one of the reasons I wrote
Speaker 1: the book is Brooks is a is a fantastic challenger
Speaker 1: brand story, and and we're in a great category. It's
Speaker 1: global and running and every big platform brand some of
Speaker 1: the best brands in the world, from athletic footmar and apparel,
Speaker 1: from the outdoor industry, from fitness is doing running gear, shoes,
Speaker 1: head to tell, and and obviously bras and jackets and
Speaker 1: everything else. So that's where we're competing. But I think
Speaker 1: in the world there are more challenger brands and there
Speaker 1: are leading category platform players, and so I wanted to
Speaker 1: share this story because I think what we're doing is
Speaker 1: has been a lot of fun, and it's we're building
Speaker 1: a great brand and a great company and uh and
Speaker 1: hopefully there's other people that are involved in categories. Maybe
Speaker 1: there are a challenger brand that will get some value
Speaker 1: on it. That's Jim Weber, the CEO of Brooks Running.
Speaker 1: Next on our menu, Fame chef Danielle Blue on opening
Speaker 1: a new restaurant as the New York City restaurant See
Speaker 1: opens up as well. This is Bloomberg broadcasting from the
Speaker 1: financial capital of the world, Bloomberg, Eleve and Frio in
Speaker 1: New York to Washington, d C Bloomberg to Boston, Bloomberg
Speaker 1: one O six one to San Francisco, Bloomberg nine six
Speaker 1: to the country Sirius XM Channel one nine and around
Speaker 1: the globe, the Bloomberg Business and Bloomberg Radio dot Com.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stenovan on Bloomberg Radio. The next guest
Speaker 1: is definitely well known to our Bloomberg Business Week audience
Speaker 1: and community. I'm guests, and some of you have eaten
Speaker 1: at his establishments as well. We're talking about chef and
Speaker 1: restaurant toward Danielle Bloo, owner of several restaurants in New
Speaker 1: York City alone, and he's also got restaurants around the
Speaker 1: world in Singapore, Dubai also at Sea. Well, the good
Speaker 1: thing is that's the oldest spectrum of the market because
Speaker 1: I even a retail store like a Pistoi Bloom restaurant
Speaker 1: daniel La Pabion, which is a year old Dismounts and
Speaker 1: Danielle is celebrating is twenty nine years. And of course
Speaker 1: the Grata being a distiw restaurant, as well as Babu
Speaker 1: Bully Suit that are also casual, more approachable. I think
Speaker 1: we have been. We have been having a very good
Speaker 1: quarters and we are entering to a second quarter with
Speaker 1: very strong a lot of demand, a lot of private
Speaker 1: dining as well. People are going out, people are spending,
Speaker 1: but no more than before or if they do it
Speaker 1: because they really wanted to splurge on the missing things
Speaker 1: they really missed. But we see the lunch coming back.
Speaker 1: The midtown business lunch are coming strong. But there's also
Speaker 1: that blend of business people and social people. People want
Speaker 1: to gather together and celebrates, and the buildings are filling
Speaker 1: up more and more, and we see the activity inside.
Speaker 1: We see also in the amenity floors, so many people
Speaker 1: come for lunch as much as in the restaurant. What
Speaker 1: about when it comes to finding employees, because we know
Speaker 1: that's been so difficult for for many industries. How are
Speaker 1: you when it comes to staffing the restaurants? Well, that
Speaker 1: is um it is challenging. But we have a lot
Speaker 1: of young people coming to New York. A lot of
Speaker 1: people want to move back to New York, move back
Speaker 1: or move to New York because they see no opportunity
Speaker 1: to be part of this uh sort of new beginning again.
Speaker 1: In New York and we see a lot of young
Speaker 1: talents who maybe we aren't thinking of it and now
Speaker 1: engaging a coming to New York. And we have also
Speaker 1: a lot of more people I think on the job
Speaker 1: market coming. So it is perfect. No, we are trying
Speaker 1: to be very careful. It's a balance between the shift
Speaker 1: we operate and the amount of staff we have in
Speaker 1: order to guarantee the quality of service and food. So
Speaker 1: you've seen a lot of cycles. And I think even
Speaker 1: after nine eleven, right, people were really concerned about in
Speaker 1: downtown New York in parts of New York and just
Speaker 1: it came back. And we've seen so many different cycles.
Speaker 1: And this wonderful grand city that is Manhattan, um in
Speaker 1: New York City, how would you put this cycle? Uh?
Speaker 1: And and then and kind of do you expect that
Speaker 1: we get back to kind of the grand levels that
Speaker 1: we saw pre pandemic. I think the worst part of
Speaker 1: the cycle is almost there. The bad part of this
Speaker 1: cycle is when the RF came out and only distributed
Speaker 1: a third of restaurants a compensation to help them restart
Speaker 1: their business, and more than tutor that would say at
Speaker 1: one point four million restaurants never got anything and so this, uh,
Speaker 1: this was this forced a lot of closure. This forced
Speaker 1: to so many business to not be able to reopen
Speaker 1: the business they had, it was impossible. And also you know,
Speaker 1: the last three years to an apt year, the get
Speaker 1: good at the amount of lass that restaurant business had.
Speaker 1: And I hope the government will do something about this
Speaker 1: very unfair sort of distribution that happened in our business. Well,
Speaker 1: we talk a lot about people moving out of New
Speaker 1: York and we've also talked a lot about the way
Speaker 1: that jobs have changed here in terms of remote and
Speaker 1: people not having to necessarily live in New York City
Speaker 1: to work here. Do you think New York City ever
Speaker 1: comes back to levels, at least when it comes to employment,
Speaker 1: when it comes to the service industry that we saw
Speaker 1: a pre pandemic. Of course it will, because I think
Speaker 1: the transition of the home office situation will still last
Speaker 1: couple of years until there's really a settlement of balance
Speaker 1: between people's life and business necessity. But uh, and I
Speaker 1: think there's a lot of I mean, in our business,
Speaker 1: the hospitality. If someone say about to work from home,
Speaker 1: it's not gonna work. You're gonna have nobody's serving your meal.
Speaker 1: Right there are so many strains and stresses still on
Speaker 1: this industry, and I think about labor, certainly in labor
Speaker 1: costs or just finding the workers you need, but also
Speaker 1: Danielle about just higher food costs. Are you able to
Speaker 1: pass all of that along to your customers. We try
Speaker 1: to be very very cautious on raising price as much
Speaker 1: as we get hit every day with the rays of something.
Speaker 1: I mean, if he's not the land, the asparagus. If
Speaker 1: it's not the asparagus is the audi shows of course
Speaker 1: they come off the show, come from California, that to
Speaker 1: travel over the way to New York, and so we
Speaker 1: get very creative and try to really work with our
Speaker 1: local suppliers as much as possible. That's our conversation with
Speaker 1: chef Danielle Blue. Catch a full conversation. You can find
Speaker 1: that at business week dot com and Bloomberg dot com.
Speaker 1: You're listening to Bloomberg business Week. Coming up, what is
Speaker 1: widely considered the most important art show in the world
Speaker 1: and its new focus. This is the Spring Art auctions
Speaker 1: get under way and Carol, they are getting price here
Speaker 1: also getting assist from John A dive into the magazine's
Speaker 1: pursuit section. That's next This is Bloomberg. You're listening to
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stinovich from Bloomberg Radio. Every new Watch is like
Speaker 1: a new piece of arts. It has in different stories
Speaker 1: to tell the time. Wines as a whole really speak
Speaker 1: to that quintessential Need is the most powerful car made
Speaker 1: in the US period. You get the beautiful interior, the
Speaker 1: iconic design that's very cheek and posh. Even if you
Speaker 1: play for it, it's something that get. It is time
Speaker 1: for Bloomberg pursuits and joining us his arts columnist James Tarmi,
Speaker 1: who had a lot of work to do, because man,
Speaker 1: this section is all his nice job. By the way,
Speaker 1: this is really good. I want to start with your
Speaker 1: recent trip to Venice for the B and L A.
Speaker 1: That's work. That is absolutely work, and I will continue
Speaker 1: to insist that it is. To whoever questions my fourth
Speaker 1: coming expenses, What was it like being there? Because it
Speaker 1: was the first one in person since the pandemic? Right, yes,
Speaker 1: it was actually delayed a year, and I have to
Speaker 1: say that this was the most triumphantly successful being that
Speaker 1: I have been to in a decade. It was more
Speaker 1: art better art, more people than I have ever seen before.
Speaker 1: It was a real must see in a way that
Speaker 1: I can't overstate. All Right, I had never heard of it,
Speaker 1: so I'm an idiot, so tell me that. Wow. All
Speaker 1: I could say is wow, listen, thank you for admitting that.
Speaker 1: Let me let me give you a brief over you
Speaker 1: that's gonna be played over and over in a promo
Speaker 1: and over. So so the being l is, as its
Speaker 1: name implies, an event that occurs usually every two years.
Speaker 1: It was still late a year because of COVID, but
Speaker 1: this was the fifty nine edition of it. And what
Speaker 1: happens is there's this park on the southern tip of
Speaker 1: the island called the Jardini and they're around thirty national
Speaker 1: pavilions in thirty different countries UM put on their own
Speaker 1: contemporary art exhibitions. And it used to be a sort of,
Speaker 1: um it sounds like an arts World fair, but anyway
Speaker 1: it is. It is and it's a way of kind
Speaker 1: of stating kind of the your national identity. But it's
Speaker 1: also a way of kind of putting forth, um, how
Speaker 1: progressive and interesting your your country is in terms of
Speaker 1: the way it's it's a form of soft power effectively.
Speaker 1: And so then there's in conjunction with that, there is
Speaker 1: a colossal exhibition in two parts, one in this massive
Speaker 1: pavilion in the Jardini and then the other in the Arsenale,
Speaker 1: which was the place where Venice when it was a republic,
Speaker 1: UH created its ships. It's a huge ship building factory. UM.
Speaker 1: And so there's it's I mean it's it's acres of
Speaker 1: of of space where you put art in. And then
Speaker 1: there's also ancillary pavilions in the Arsenale, and then there's
Speaker 1: literally hundreds of other exhibitions spread throughout the city. So
Speaker 1: you it is amazing, and so you see it all. Well,
Speaker 1: you need at least five days, usually six, I mean,
Speaker 1: just to go through the main exhibition, which was curated
Speaker 1: by New York I mean, she's Italian, but she's the
Speaker 1: she's the curator of the high Line UM to Chili Alamani.
Speaker 1: She curated this time almost universally lauded, which never happens. UM,
Speaker 1: just a real triumph. But you you need all this
Speaker 1: time to go because you're walking through the city unless
Speaker 1: you're very, very rich. And then you have a private
Speaker 1: boat that you've hired for the week, which UH George
Speaker 1: Cluney and a Mall would definitely have their private boat.
Speaker 1: It's around two years an hour if you can get one,
Speaker 1: and they just kind of sit outside whatever exhibition space
Speaker 1: and then you get on and take a different place
Speaker 1: to place. But if you're spending tens of million dollars
Speaker 1: on art, then two hundred fifty years an hour is
Speaker 1: like whatever. Yes, unfortunately I'm not and I didn't spend
Speaker 1: that was there was there a theme or like a takeaway?
Speaker 1: And maybe how different from the past. Yeah, so this
Speaker 1: is actually what thank you for that leading, Carol, because
Speaker 1: this is exactly whatever it might be too. I'm an idiot,
Speaker 1: but I can usually get people. I mean well, so,
Speaker 1: so it's very very interesting to me, at least certain
Speaker 1: to anyone who's focused on the art market, is that
Speaker 1: there is a major preoccupation still with figured of painting,
Speaker 1: which is say, painting of people the human form um
Speaker 1: and it in the contemporary market driven contemporary art market
Speaker 1: right now, it takes the form of um, figured of
Speaker 1: painting of non white subjects. And this has been extremely
Speaker 1: popular for let's say, the last six years in the market,
Speaker 1: I mean it's been popular for longer kind of outside
Speaker 1: of that, but um, it's basically a product of people
Speaker 1: realizing that non white, non male artists had basically been
Speaker 1: left out of the art historical canon for centuries because
Speaker 1: of intrinsic biases and institutions and collecting habits and so forth.
Speaker 1: So everyone sort of rushed to correct this. And the
Speaker 1: easiest way of demonstrating that they are rushing to correct
Speaker 1: it is a literal figure of the person who you're collecting. Um,
Speaker 1: And this bionale was a major transition away from that,
Speaker 1: not and that it was a transition away from collecting
Speaker 1: or emphasizing identity and the work of non white, non
Speaker 1: male artists, but a move away from figuration. People are saying, Okay,
Speaker 1: well maybe these people have more things to say about
Speaker 1: the world than simply that they exist. And so it
Speaker 1: is um in in many respects, and more sophisticated step forward.
Speaker 1: And it could have major market implications. Um as the
Speaker 1: art world can oftentimes dictate the trajectory of the art market.
Speaker 1: How did this theme manifest in gian Maria Sosati's piece
Speaker 1: that wrote about yes, so the Italian pavilion is incredible. Uh,
Speaker 1: it's around twenty square feet and it's this artist jem
Speaker 1: Y to Saudi, as you say, who was said, by
Speaker 1: the way, yes, practice really just trips off the tongue.
Speaker 1: He uh sort of had could could do whatever he wanted,
Speaker 1: and he created the series of hunting Um industrial rooms
Speaker 1: that were empty, so it was like a sweatshot lit
Speaker 1: by fluorescent lights with sewing machines, just deserted. It looks freaky,
Speaker 1: It is really freaky. And then at the end you
Speaker 1: walk into this huge kind of warehouse and out onto
Speaker 1: this nearly pitch black concrete pier where you then dimly
Speaker 1: realized that you're surrounded by like black ice, cold water
Speaker 1: and anyway. So so so it's this, there's no figuration.
Speaker 1: It's very very weird. So how does this sort of
Speaker 1: new way I I don't necessarily want to say it's
Speaker 1: a new way of doing things, but on a scale
Speaker 1: like this, how does this translate to the market Because
Speaker 1: you can't really buy or transact in an experience like that, well,
Speaker 1: even if you are worth billions of dollars. So that's
Speaker 1: a really great question. And there are ways of manifesting
Speaker 1: u conceptual ideas in in in art artistic ways that
Speaker 1: aren't necessarily experiential. So um, there are UH artworks that
Speaker 1: I mean, in very very very simplistic terms, can be
Speaker 1: abstract but have conceptual underpinnings. There are artworks which can
Speaker 1: be figurative and UM have conceptual underpinnings. There are many
Speaker 1: different ways that you can create art that people can
Speaker 1: buy that isn't simply about the artists, and I think
Speaker 1: that is something that we are increasingly going to be
Speaker 1: seeing UM in the UH years ahead. I feel like
Speaker 1: the theme of it right will play out in works
Speaker 1: of art that ultimately people will buy right like this,
Speaker 1: This this overarching theme. But it's a little grim though,
Speaker 1: Oh it is grim. But you know, the thing is
Speaker 1: that some people are grim, some people are actually kind
Speaker 1: of optimistic, but everyone's looking to the future. And that
Speaker 1: was what was a real change from from the art
Speaker 1: market and from years past. I have no easy segue,
Speaker 1: but I gotta go there because I want to talk
Speaker 1: about the Devil Wears product, the musical, and I want
Speaker 1: to talk about Elton John because you have a story
Speaker 1: in Pursuits about this. Yes, this is wild, it is
Speaker 1: it is. It's going to be heard it here first, folks.
Speaker 1: It's going to be a major hit. So it's Elton
Speaker 1: John collaborated with Shana tab who's a lyricist and a
Speaker 1: songwriter herself and um an author and a playwright, um
Speaker 1: and she is. She created Stuffs, which is right now
Speaker 1: at the Public Theater, which is like Hamilton's level hype
Speaker 1: in terms of you just can't get a ticket tickets
Speaker 1: or selling for like six hundred dollars over the price,
Speaker 1: I mean, big, big stuff. Anyway, she collaborated with all
Speaker 1: John to do Devil Wears Products the musical and um,
Speaker 1: the title sounds like it wouldn't be good, but you
Speaker 1: know it's going to be great. Well, I certainly hope. So.
Speaker 1: She she's a really ton haunted person. And Elton John
Speaker 1: is John. He does pretty well, but he does Okay,
Speaker 1: he does Okay, Um, so it's going to be really big.
Speaker 1: And so the whole thing is them translating the movie,
Speaker 1: which everyone has very strong feelings about, onto stage and
Speaker 1: making it feel fresh. Okay, we only have a couple
Speaker 1: of They do make it fresh, but you're gonna have
Speaker 1: to read it to find out. Why. I want to
Speaker 1: talk books here because it's not too early for us
Speaker 1: to start thinking about summer reads. You've got some great fiction,
Speaker 1: some great nonfiction, in here. Um, David Sedaris is still
Speaker 1: spinning yarns. Yeah he is, and he's got a lot
Speaker 1: of houses. I had no idea he's made so much money.
Speaker 1: Is really rich and frankly, you know, like if if
Speaker 1: you are, if you follow his writing, Um, you know,
Speaker 1: he spent a lot of time at the beginning of
Speaker 1: his career talking about what it's like to be poor.
Speaker 1: Now he's just sort of kind of unabashedly uh, describing
Speaker 1: the Picasso that he bought it, so the bees which
Speaker 1: house is he going to put it in there? Well,
Speaker 1: you know that's a great question, because he did just
Speaker 1: buy a second apartment on in his Upper East Side
Speaker 1: co op. I guess, um, because he didn't want to
Speaker 1: hear it's kind of convoluted. But his long term boyfriend,
Speaker 1: he calls me his boyfriend, but they've been together for decades. Uh,
Speaker 1: Hugh Hugh is like learning the piano, really learning the piano,
Speaker 1: and one of them didn't want to be around the
Speaker 1: other when they were practicing, so we just bought another
Speaker 1: apartment above him so that he could hide. Um. It's
Speaker 1: it's stuff like this, but you know it's still hilarious. Um.
Speaker 1: And there are a lot of really good jokes that
Speaker 1: I cannot tell you on air, um, but they are phenomenal.
Speaker 1: And there's a lot of other books, uh, covering so
Speaker 1: many different topics. Thank you so much. Glad you had
Speaker 1: a great trip, and I'm glad you shared it with
Speaker 1: all of it. Thank you so much for having me.
Speaker 1: All Right, that's our our columnist James Tarmy, and that
Speaker 1: are ups up the weekend edition of Bloomberg Business Week
Speaker 1: from Bloomberg Radio. Thanks so much for joining us. I'm
Speaker 1: Carol Masser and I'm Tim Stanovk. Be sure to tune
Speaker 1: into Bloomberg Business Week Monday through Friday. It starts at
Speaker 1: two pm Wall Street Time on Bloomberg Radio. You can
Speaker 1: also watch your daily broadcast check it out on YouTube.
Speaker 1: Just searched Bloomberg Global News and got our Bloomberg Business
Speaker 1: Week podcast. You can find it at Bloomberg dot com, Apple,
Speaker 1: or wherever you get your podcast. Bloomberg Business Week is
Speaker 1: available on newsstands now at Bloomberg dot com, business Week
Speaker 1: dot com, and always on the Bloomberg terminal, And you
Speaker 1: can also see me on Bloomberg Quick Take available at
Speaker 1: Bloomberg dot com, slash qut and streaming platforms like Roku,
Speaker 1: Apple TV, Samsung TV, and more. Have a great weekend.
Speaker 1: Everyone ready to buy smart Yeah, if it's you know,
Speaker 1: you know, not too expensive budget art. Yeah, not the
Speaker 1: stuff that's Incursued's all right, this is Bloomberg.