WEBVTT - Disney, Tapestry, Monterey, and University Endowments (Podcast) 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:05.240 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moving news. 0:00:14.160 --> 0:00:17.279 Find the Bloomberg Markets Podcast on Apple Podcasts or wherever 0:00:17.400 --> 0:00:20.520 you listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:21.040 --> 0:00:23.439 This is another name that kind of was on the 0:00:23.520 --> 0:00:25.720 radar screen for a lot of investors. They reported numbers 0:00:25.760 --> 0:00:28.240 last night a little bit better and expected people looking 0:00:28.240 --> 0:00:30.400 at the streaming business the losses there, we're a little 0:00:30.440 --> 0:00:32.839 bit lower. That's good. It's all part of Bob Byerker's 0:00:32.840 --> 0:00:36.400 CEO's plan to cut costs here. But there's as many 0:00:36.520 --> 0:00:38.839 questions around that company as I've ever seen in my 0:00:38.880 --> 0:00:41.800 thirty years of covering it. Most you know, when you 0:00:41.840 --> 0:00:43.760 see a business like ESPN, which is just the rock 0:00:43.800 --> 0:00:46.360 solid core of this company for twenty twenty five years now, 0:00:46.360 --> 0:00:48.760 you're wondering whether you even want to own it. Mark 0:00:48.800 --> 0:00:52.040 Douglas joins, he's the CEO of Mountain. He knows a 0:00:52.080 --> 0:00:54.800 thing or two about this business, about the media business, 0:00:54.800 --> 0:00:58.120 about the digital advertising business. Hey, Mark, you take a 0:00:58.160 --> 0:01:01.680 look at what is a stal war media company like Disney, 0:01:01.680 --> 0:01:03.279 and boy, there are a lot of question marks there. 0:01:03.280 --> 0:01:05.400 What did you what are some of the key issues 0:01:05.400 --> 0:01:06.680 for you when you look at Disney? 0:01:07.760 --> 0:01:11.320 Well, I think the fundamental issue is Disney. You know, 0:01:11.640 --> 0:01:15.640 sell has magical prices for everything they do, meaning the 0:01:15.680 --> 0:01:19.640 prices are generally pretty high, and I think they're not 0:01:19.920 --> 0:01:24.720 really delivering magical you know, experiences and or magical content 0:01:24.880 --> 0:01:28.280 right now, and they keep looking externally for whether the 0:01:28.360 --> 0:01:32.520 factors that are affecting their business rather than just looking internally. 0:01:33.200 --> 0:01:36.240 And so even if consumers are spending less money, then 0:01:36.360 --> 0:01:38.640 deliver the magic and take a bigger share of wallet. 0:01:39.360 --> 0:01:42.160 But you know, I think they're full of excuses right now, 0:01:42.200 --> 0:01:45.320 and until they look at themselves, I think this kind 0:01:45.360 --> 0:01:47.600 of like we're not doing as well as we used 0:01:47.640 --> 0:01:49.720 to is going to continue. 0:01:49.880 --> 0:01:53.720 So, uh, what's the answer on the whole streaming thing? 0:01:53.840 --> 0:01:55.280 The streamers really make money? 0:01:55.320 --> 0:01:55.520 Mark? 0:01:55.600 --> 0:01:58.960 Because I was listening to Paul interview the head. 0:01:58.760 --> 0:02:03.120 Of I think Sagraw and she was saying the streamers 0:02:03.160 --> 0:02:05.280 make thirty billion a year in profits and they want 0:02:05.280 --> 0:02:05.880 a piece of it. 0:02:07.280 --> 0:02:11.520 Well, I mean, obviously Netflix is definitely making money, and 0:02:11.639 --> 0:02:14.959 I think you're gonna say it because Netflix, their ad 0:02:15.000 --> 0:02:18.240 supported tier is you know, off to somewhat of a 0:02:18.360 --> 0:02:21.840 slow start, but it's just hugely profitable for them. The 0:02:22.800 --> 0:02:25.760 what they're doing in password sharing again is just hugely 0:02:25.800 --> 0:02:28.960 profitable for them. And my opinion is Netflix is going 0:02:29.040 --> 0:02:31.360 to kind of enter a new era of just increased 0:02:31.400 --> 0:02:34.320 learnings and I think anyone else can get there, but 0:02:34.440 --> 0:02:37.320 it starts with you know, people want to be in 0:02:37.360 --> 0:02:40.680 the parks, people want to watch Star Wars, they want 0:02:40.720 --> 0:02:43.360 to watch new Disney movies, and they want to do 0:02:43.400 --> 0:02:45.519 them at the same rates that they have in the past. 0:02:45.560 --> 0:02:47.639 So I think Disney can absolutely get there. I'm a 0:02:47.680 --> 0:02:51.000 little concern that, you know, they're talking about reducing their 0:02:51.000 --> 0:02:55.160 investment in streaming or moving away from ESPN as if 0:02:55.160 --> 0:02:59.640 people don't want to watch sports anymore. And so it's 0:02:59.440 --> 0:03:02.160 as you open, it's a little bit of just like 0:03:02.320 --> 0:03:06.560 everything seems to be in turmoil, where you know, I 0:03:06.560 --> 0:03:08.960 don't think the consumer has actually changed that much. It's 0:03:09.280 --> 0:03:12.440 Disney's the one that seems to not know exactly the 0:03:12.440 --> 0:03:13.520 direction they want to go. 0:03:13.840 --> 0:03:16.920 Yeah, and that even applies to the film business, which 0:03:16.919 --> 0:03:19.200 had been you know, ever since they started buying all 0:03:19.240 --> 0:03:22.519 these great brands like Pixar, like Marvel, like the Star 0:03:22.560 --> 0:03:26.600 Wars franchises. It was literally guaranteeing them two to three 0:03:26.639 --> 0:03:30.160 to four movies per year with a global gross in 0:03:30.200 --> 0:03:34.119 excess of one billion dollars. Now, even that business seems 0:03:34.360 --> 0:03:36.640 like it might be in a rut. They've delayed and 0:03:36.720 --> 0:03:39.080 pushed out a lot of release dates. Maybe some people 0:03:39.080 --> 0:03:42.240 are saying, maybe we're oversaturated with some of these franchises. 0:03:42.280 --> 0:03:44.440 And then we just look at Barbie kind of a 0:03:44.480 --> 0:03:47.680 new original movie that's over a billion dollars in box office. 0:03:47.680 --> 0:03:50.320 So do you think Walt Disney's lost some of their 0:03:50.880 --> 0:03:52.360 magic when it comes to the film business? 0:03:52.360 --> 0:03:52.560 Mark? 0:03:53.280 --> 0:03:54.240 Yeah, I think you know. 0:03:54.360 --> 0:03:56.720 So this is we've talked about the sports on the show. 0:03:56.840 --> 0:03:59.040 I mean, when your team's not doing well, everyone needs 0:03:59.080 --> 0:04:02.840 to remember how they catch the ball and hit right 0:04:02.960 --> 0:04:05.640 like it's baseball season right now, and the best managers 0:04:05.720 --> 0:04:09.280 just go back to basics. And I think Disney's problems 0:04:09.280 --> 0:04:14.360 are not huge if they just go back to basics. 0:04:14.640 --> 0:04:17.800 And if they go back to basics, they kind of 0:04:17.880 --> 0:04:24.440 own the segment. There's these huge segments of the market, parents, children, sports, 0:04:25.040 --> 0:04:28.240 and you know when you see a company that owns 0:04:28.320 --> 0:04:31.800 segments of the market, I mean, just like dominate segments 0:04:31.800 --> 0:04:34.280 of the market like that, and they're a little confused 0:04:34.320 --> 0:04:37.520 as to what they should do, like just go back 0:04:37.600 --> 0:04:41.080 to basics, get a little less focus on near turn 0:04:41.200 --> 0:04:44.640 results in Wall Street, and just essentially kind of grow 0:04:44.720 --> 0:04:47.520 yourself out of that. And and you know, especially when 0:04:47.560 --> 0:04:49.599 you have the kind of capital that Disney has to 0:04:49.640 --> 0:04:52.159 do it also, So I mean, they're not at risk 0:04:52.200 --> 0:04:54.719 of running out of money unless they look their losses 0:04:54.760 --> 0:04:57.600 continue for a very long time. So I mean that's 0:04:57.640 --> 0:05:00.520 my advice as a CEO by by gerbviously is a 0:05:00.600 --> 0:05:03.880 very smart guy, and he and and he's gonna, you know, 0:05:03.960 --> 0:05:06.599 follow what he thinks his best and so we'll see 0:05:06.600 --> 0:05:07.400 how this plays out. 0:05:07.560 --> 0:05:13.000 You have any succession advice for Bob, Well, the last 0:05:13.000 --> 0:05:15.159 one didn't go well, didn't go any better than the 0:05:15.200 --> 0:05:17.279 show Succession, So. 0:05:20.240 --> 0:05:22.719 I think he's gonna have to really fix this before 0:05:22.760 --> 0:05:25.760 he brings in someone else to grow it. Yeah, so 0:05:25.839 --> 0:05:27.680 that's it. I don't think he's there for one year. 0:05:27.720 --> 0:05:29.360 I think this is going to take a few years. 0:05:29.360 --> 0:05:32.160 I haven't seen the end of Succession, So we won't 0:05:32.160 --> 0:05:34.440 will spoiler, won't we won't spoiler for you, Hey, Mark, 0:05:34.760 --> 0:05:38.720 you know, it's just when you think about Disney, there, 0:05:38.960 --> 0:05:42.000 like all the media companies really exposed to these strikes 0:05:42.000 --> 0:05:44.520 that we're seeing with the writers and the actors. 0:05:44.520 --> 0:05:47.599 You're so involved with the you know, the advertising side 0:05:47.600 --> 0:05:50.520 of the business, the digital side of the business. What's 0:05:50.560 --> 0:05:53.880 your take on the strikes? Share, because boy, both sides 0:05:53.920 --> 0:05:55.880 seem really really entrenched. 0:05:56.560 --> 0:06:00.719 Yeah. Well, I think, first from what I understand, the 0:06:01.680 --> 0:06:04.880 anything that was already in motion on the movie on 0:06:04.920 --> 0:06:09.120 the film side is is allowed. That project is allowed 0:06:09.160 --> 0:06:12.159 to get completed. So it's actually going to take a 0:06:12.200 --> 0:06:17.520 few more months before like literally everything is truly shut down. 0:06:18.200 --> 0:06:22.039 And then I think you know, the streamers and you 0:06:22.080 --> 0:06:24.559 know the studios and things like that. I mean, cash 0:06:24.680 --> 0:06:26.320 is king. They have a lot of cash to wake 0:06:26.360 --> 0:06:30.400 this out. So this is it's hard to predict how 0:06:30.440 --> 0:06:32.760 this is going to go. But if it's a war 0:06:32.800 --> 0:06:35.400 of attrition on money, you know that's going to favor 0:06:35.440 --> 0:06:37.960 these big studios just kind of waiting it out to 0:06:38.000 --> 0:06:40.160 get a deal that they think is reasoned well. 0:06:40.160 --> 0:06:44.080 And Disney has an added bonus that Netflix doesn't in 0:06:44.160 --> 0:06:45.280 the parks business, right. 0:06:45.360 --> 0:06:48.360 I mean I heard yesterday they get seventy percent. 0:06:48.560 --> 0:06:52.200 Of their operating income operating income from the parks. 0:06:52.000 --> 0:06:54.000 That's the good news. The bad news is it's because 0:06:54.040 --> 0:06:56.200 the other businesses have gone down so much, you. 0:06:56.120 --> 0:06:59.000 Know exactly the the movies in particular, I think have 0:06:59.080 --> 0:06:59.880 really been hurting them. 0:07:00.040 --> 0:07:02.480 You're right, then, the parks businesses of rock Solid has 0:07:02.520 --> 0:07:06.080 always been the big franchises like I don't follow all 0:07:06.080 --> 0:07:11.960 the superhero movies, but that and Star Wars, uh and 0:07:12.040 --> 0:07:12.720 even Pixar. 0:07:12.800 --> 0:07:15.120 They just haven't been as successful as they as they 0:07:15.120 --> 0:07:16.040 once were, have they? 0:07:16.800 --> 0:07:19.960 Yeah, and and so I mean that again. You know, 0:07:20.080 --> 0:07:23.760 the content is a part of the experiences that Disney sells, 0:07:24.200 --> 0:07:27.160 and so you know they have to look inward and say, 0:07:27.280 --> 0:07:29.480 you know, is this because consumers don't want to watch 0:07:29.520 --> 0:07:32.360 Star Wars anymore? Or is it because maybe we're not 0:07:32.400 --> 0:07:34.680 doing the greatest job and giving them what they want? 0:07:34.720 --> 0:07:36.520 Because if you give them what they want, they're going 0:07:36.600 --> 0:07:39.960 to watch. And so you know, it's it's it's I'm 0:07:40.000 --> 0:07:42.240 going to keep eating that drum. It's back to basics 0:07:42.240 --> 0:07:43.360 to grow this business. 0:07:43.520 --> 0:07:44.880 Hey, Mark, give us a sense of kind of the 0:07:44.880 --> 0:07:47.440 advertising market out there. You're so involved on a day 0:07:47.440 --> 0:07:50.320 to day basis, I can't imagine it's it's very good 0:07:50.360 --> 0:07:52.560 because I mean, I'm just thinking the economics, the economic 0:07:52.640 --> 0:07:55.840 environment is kind of uncertain here. What are you seeing 0:07:55.840 --> 0:07:57.720 out there just in terms of overall advertising. 0:07:58.400 --> 0:08:02.400 Yeah, so if you're if your performance advertiser, your Google, 0:08:02.760 --> 0:08:08.160 your meta you know metas up your over year even TikTok, Amazon, 0:08:08.560 --> 0:08:11.360 you know, companies in the performance space, you continue to 0:08:11.400 --> 0:08:15.640 do quite well. If you're in the brand advertising space, 0:08:15.720 --> 0:08:19.000 more of the big TV networks, they it's a bit 0:08:19.160 --> 0:08:21.640 up and down. It's just literally I think month to month, 0:08:22.280 --> 0:08:25.440 the budgets are going up, they're going down. So it's 0:08:25.520 --> 0:08:28.240 not like this huge era growth right now. But it's 0:08:28.280 --> 0:08:30.680 also not like a blood bath. I think that the 0:08:31.480 --> 0:08:34.520 you know kind of retraction and spending on brand advertising 0:08:34.520 --> 0:08:38.559 has already occurred and it's just a little less predictable. 0:08:38.640 --> 0:08:41.079 But overall, I think, you know, from everyone I talk 0:08:41.160 --> 0:08:44.720 in the industry, my own experience at Mountain, it's, you know, 0:08:44.760 --> 0:08:49.160 it's pretty it's relatively solid. Given the you know kind 0:08:49.200 --> 0:08:52.280 of how much the economy and the and economic news 0:08:52.280 --> 0:08:55.720 are just constantly up and down. It's pretty consistent right now, all. 0:08:55.679 --> 0:08:57.720 Right, Mark great stuff is always Mark Doug As President 0:08:57.760 --> 0:09:00.280 and CEO of Mountain, giving kind of hists on what 0:09:00.360 --> 0:09:01.960 we saw from Disney and some of the streamers. 0:09:03.600 --> 0:09:06.960 You're listening to the team Ken's are live program Bloomberg 0:09:07.080 --> 0:09:09.359 Markets weekdays at ten am Eastern. 0:09:09.120 --> 0:09:12.120 On Bloomberg dot Com, the iHeartRadio. 0:09:11.440 --> 0:09:14.240 App and the Bloomberg Business app, or listen on demand 0:09:14.240 --> 0:09:15.960 wherever you get your podcasts. 0:09:17.800 --> 0:09:20.280 Makes a little m and a trade Today in the 0:09:20.320 --> 0:09:23.840 luxury space. Tapestry again one of the worst names in 0:09:23.960 --> 0:09:26.679 the business. They own the brands, including Coach and Kate Spade. 0:09:26.679 --> 0:09:29.680 They agreed to require Michael Core's parent Capri Holdings and 0:09:29.760 --> 0:09:32.360 an eight point five billion dollar deal to bring it 0:09:32.400 --> 0:09:35.720 down for us. Kritti Gupta, host of Bloomberg Surveillance Early Edition, 0:09:35.840 --> 0:09:39.640 joins us here in our Bloomberg Interactive Brokers studio. Pretty 0:09:39.640 --> 0:09:41.400 big names here, Uh critie, what do you make of it? 0:09:41.480 --> 0:09:41.680 Yeah? 0:09:41.679 --> 0:09:44.199 I don't think Tapestry and Capri necessarily resonates with everyone. 0:09:44.200 --> 0:09:45.640 But when you hear the names Jimmy. 0:09:45.440 --> 0:09:49.840 Choo Versachi, Kate Spade, Coach, perhaps some bells will ring 0:09:50.120 --> 0:09:52.400 and look, these are the two parent companies that, frankly 0:09:52.440 --> 0:09:55.400 have both been struggling. We know luxury. When you think luxury, 0:09:55.440 --> 0:09:58.320 you don't think the US necessarily. You think you're PM luxury, 0:09:58.360 --> 0:10:01.559 You think Rimez, you think Louis, et cetera. But it's 0:10:01.559 --> 0:10:04.640 the same model that these folks are trying to basically 0:10:04.720 --> 0:10:06.880 make in the US sphere. The problem is that the 0:10:06.880 --> 0:10:09.080 appetite for luxury in the US is not the same 0:10:09.360 --> 0:10:11.679 as it is in Europe or the Middle East or China. 0:10:12.120 --> 0:10:12.720 For example. 0:10:12.880 --> 0:10:15.120 Why I go down Fifth Avenue, go down Madison Avenue 0:10:15.120 --> 0:10:17.040 and it seems like all the brands are there. 0:10:17.040 --> 0:10:19.840 Sure that's not a representation of America, I gotta say. 0:10:19.880 --> 0:10:22.760 And that's I think where the value get at him. 0:10:23.320 --> 0:10:24.800 You got to go to Dallas, Texas. 0:10:24.800 --> 0:10:26.400 I'm going to give you a tour, and I'm going 0:10:26.480 --> 0:10:29.160 to show you what it's like to live in Middle America. 0:10:29.320 --> 0:10:32.280 Forwarth America. Forwarth, Texas is great and one of the 0:10:32.320 --> 0:10:34.800 fastest growing cities in the country, I should say, But. 0:10:34.920 --> 0:10:35.600 Here's the point. 0:10:35.760 --> 0:10:38.640 As you have this kind of wealth developing around the country, 0:10:38.880 --> 0:10:40.880 you need more access to some of these brands. And 0:10:40.880 --> 0:10:44.200 that's where Michael Cores the basically the founder of Capri Holdings, 0:10:44.200 --> 0:10:46.360 and Michael Cours the brand comes in handy because one 0:10:46.360 --> 0:10:50.320 of his major value ads is taking these really well 0:10:50.360 --> 0:10:53.720 known names Jimmy chou versace, et cetera, and making them 0:10:53.920 --> 0:10:57.360 more accessible to mainstream Americans by lowering down the price point, 0:10:57.480 --> 0:11:00.719 increasing the manufacturing. It's no longer an elite exclusive thing 0:11:00.960 --> 0:11:03.560 to get a pair of Jimmy Chow's shoes. Sure, it's inventive, 0:11:03.920 --> 0:11:06.439 it is. It's expensive, how much as expensive as they were? 0:11:06.559 --> 0:11:08.960 I think a pair goes around for like seven hundred dollars. 0:11:09.000 --> 0:11:11.480 Okay, that's luxury, hold on, that's exclusive. 0:11:11.520 --> 0:11:13.880 It is one hundred percent, but it's not as expensive 0:11:13.880 --> 0:11:15.880 as like, say the two thousand they used to go for. 0:11:16.120 --> 0:11:18.560 That's the point before the acquisition. So the price point 0:11:18.600 --> 0:11:21.200 has actually come down and become more attainable. And if 0:11:21.240 --> 0:11:23.280 you go to any mall in America, there is a 0:11:23.320 --> 0:11:24.440 Michael Core store there. 0:11:24.520 --> 0:11:27.080 Yes, that's not normal for a luxury Michael Cores. But 0:11:27.120 --> 0:11:29.280 can you buy Jimmy Chew's shoes also at any mall 0:11:29.320 --> 0:11:29.840 in America? 0:11:30.080 --> 0:11:30.320 No? 0:11:30.440 --> 0:11:34.559 But okay, they're heading in that direction. We are, we were. 0:11:34.640 --> 0:11:36.160 And we have your no idea. 0:11:36.200 --> 0:11:40.720 Ohio, I am, but I'm not shopping for Michael Cores 0:11:40.800 --> 0:11:41.439 or Jimmy Chew. 0:11:41.520 --> 0:11:43.840 In fact, you will soon now that your girl dad. 0:11:44.000 --> 0:11:48.600 Well, we were trying to make the distinction between you know, 0:11:48.720 --> 0:11:51.360 something like Coach, which I don't think they would define 0:11:51.360 --> 0:11:55.520 themselves as a luxury uh product maker, and something like 0:11:55.640 --> 0:11:58.560 Versace and they definitely would describe themselves as luxury. 0:11:58.679 --> 0:12:02.080 Yeah, well used to be and they used to This 0:12:02.160 --> 0:12:03.880 is I think the point they used to be they 0:12:03.920 --> 0:12:06.640 thought of as a luxury brand. I'll give you another example 0:12:06.800 --> 0:12:09.400 with Coach, although they make seventy percent of tapestries revenue. 0:12:09.480 --> 0:12:11.199 You have Stuart Whitzman and Kate Spade. When do you 0:12:11.200 --> 0:12:12.920 think Stuart Whitesman do you think luxury? 0:12:13.120 --> 0:12:14.240 I don't know who's Stuart Whitesman. 0:12:14.280 --> 0:12:17.000 Oh my god, you're killing me. I'm in a studio 0:12:17.040 --> 0:12:18.280 full of guys. This isn't fair. 0:12:18.480 --> 0:12:19.920 I can't make my point. 0:12:19.920 --> 0:12:22.760 But Kate Spade, Come on, okay, Kate's Spade is luxury. 0:12:23.080 --> 0:12:23.320 Yet. 0:12:23.520 --> 0:12:25.360 Now, if you go to any mall in America, you 0:12:25.400 --> 0:12:28.680 can find Kate's Bade. If you go to a thirty 0:12:28.720 --> 0:12:30.880 Rock or Rockefeller Plaza, there's Kate's bad. 0:12:30.960 --> 0:12:31.880 Same thing with Sarrovski. 0:12:31.960 --> 0:12:33.840 There are these names that used to be very elite 0:12:33.960 --> 0:12:36.920 very expensive that are now far more accessible, far more 0:12:37.520 --> 0:12:41.280 household names. And that's because of this kind of move that. 0:12:41.280 --> 0:12:44.120 Tapestry and Kate's bade. I know, Caprie Holdings well done. 0:12:44.200 --> 0:12:45.840 The thing is what you're right, You're right about that, right, 0:12:45.840 --> 0:12:49.760 because Kate Spade coach Michael Core's, these are things that 0:12:49.800 --> 0:12:51.840 are all in the mall, and not just the mall 0:12:51.960 --> 0:12:55.040 in the middle of Manhattan, one of the most expensive 0:12:55.040 --> 0:12:56.760 cities in the world. But I'm all in the middle 0:12:56.760 --> 0:12:59.200 of Columbus, Ohio, which is where I tend to go 0:12:59.240 --> 0:13:03.320 to mall's exactly. So, but those things they go down 0:13:03.360 --> 0:13:05.960 market in order to get mass market, right, right. 0:13:06.240 --> 0:13:08.280 But that's the value add That's what Michael Core's has 0:13:08.320 --> 0:13:09.640 done with a lot of these brands. And that's one 0:13:09.679 --> 0:13:11.520 of his criticisms as well. For the folks who are 0:13:11.600 --> 0:13:14.280 very high fashion. They're saying, look, you're cheapening the brand 0:13:14.320 --> 0:13:16.520 by making it so accessible mainstream. But then if you 0:13:16.520 --> 0:13:19.240 look at the profit and the turnover, well, the top 0:13:19.280 --> 0:13:21.360 line growth for some of these companies that they're acquiring 0:13:21.760 --> 0:13:24.079 is immense because all of a sudden you're accessing people 0:13:24.120 --> 0:13:28.520 in I don't know, Wyoming, Ohio, Illinois, Texas that you 0:13:28.559 --> 0:13:30.680 wouldn't have ordinarily, and that's a really big deal. 0:13:30.840 --> 0:13:33.920 Is there a consolidation wave going on in the luxury 0:13:33.920 --> 0:13:36.040 space and if so, why There. 0:13:35.920 --> 0:13:39.559 Definitely is, and it's simply because one in the US specifically, 0:13:39.559 --> 0:13:41.000 I think it's going a bit faster than it is 0:13:41.200 --> 0:13:44.160 in the likes of Europe, for example. But the wave 0:13:44.200 --> 0:13:46.760 of consolidation in the US is largely driven by trying 0:13:46.760 --> 0:13:49.400 to apply the European model to the US and it 0:13:49.480 --> 0:13:52.520 not really working. So you have seen Tapestry and capre 0:13:52.600 --> 0:13:55.800 Holdings separately, their stock has been tanking. These are companies 0:13:55.800 --> 0:13:59.320 that have been struggling relative to some of their international peers. 0:13:59.320 --> 0:14:02.040 But you're also that wave of consolidation in Europe. 0:14:02.080 --> 0:14:03.800 You're seeing in some of the Middle Eastern brands as well, 0:14:03.840 --> 0:14:07.400 because the Chinese consumer, which has been driving a lot 0:14:07.400 --> 0:14:09.640 of the luxury buying, has been slowing do well. 0:14:09.679 --> 0:14:12.160 That's why the news coming out of China, which is 0:14:12.360 --> 0:14:15.560 they're basically going to let the people move about go 0:14:15.600 --> 0:14:19.280 anywhere they want, So that's going to presumably help Chinese 0:14:19.320 --> 0:14:22.880 outgoing tourism outside of China, outside of Macau, where they've 0:14:23.080 --> 0:14:25.960 generally been going to Europe to the US, and I 0:14:26.000 --> 0:14:29.240 hope to see our Chinese shoppers on Fifth Avenue on 0:14:29.240 --> 0:14:32.840 Madison Avenue like we used to pre pandemic. Those folks 0:14:32.880 --> 0:14:35.520 have money and they like to spend on the luxury brands. 0:14:35.800 --> 0:14:38.200 And I know the stores that are again on Fifth Avenue, 0:14:38.240 --> 0:14:40.520 Madison Avenue. They depend on those and. 0:14:40.440 --> 0:14:43.280 I hope they're not buying as much or with as 0:14:43.320 --> 0:14:44.920 much money as they had been in the past, because 0:14:44.920 --> 0:14:46.680 they drove the price of some of the products that 0:14:46.720 --> 0:14:50.160 I like way up. For example, Rolex watches on the 0:14:50.200 --> 0:14:54.880 secondhand market, those prices were far higher. I'm talking two x, 0:14:54.880 --> 0:14:59.320 three x four x of manufacturing suggested retail price, and 0:14:59.360 --> 0:15:01.960 they finally, I have been coming back down high end 0:15:01.960 --> 0:15:04.320 watch prices. And when I saw that story this morning, 0:15:04.400 --> 0:15:06.080 the first thing I thought is, oh no. 0:15:06.400 --> 0:15:06.520 Well. 0:15:06.560 --> 0:15:09.560 The first thing I thought was Sam Fizzelli, my wine 0:15:09.680 --> 0:15:12.880 expert and it also covers pharmaceuticals for Bloomberg Intelligence. He's 0:15:12.920 --> 0:15:14.880 a big wine guy. He lives in London and lives 0:15:14.880 --> 0:15:17.760 in France. Big wine guy. He was just explaining to 0:15:17.800 --> 0:15:19.960 me over the last you know, ten years, how the 0:15:20.040 --> 0:15:23.400 Chinese have just really rocked the wine market and pushed prices, 0:15:23.480 --> 0:15:26.960 particularly for fine, French wines way higher, but they've been 0:15:26.960 --> 0:15:27.520 out of the market. 0:15:27.600 --> 0:15:29.560 Yeah, it's funny how we talk about the Chinese consumer 0:15:29.600 --> 0:15:31.600 almost like we talked about the American consumer. I mean, 0:15:31.640 --> 0:15:34.200 of course, the US spending power is still significantly higher, 0:15:34.400 --> 0:15:36.000 but now we actually have to worry about not just 0:15:36.080 --> 0:15:39.680 Chinese exports but Chinese imports as well, which I think 0:15:39.720 --> 0:15:42.160 really really speaks to the strength of the country as well. 0:15:42.480 --> 0:15:44.400 And to your point on that headline, you saw the 0:15:44.400 --> 0:15:48.120 European brand specifically, like the Richemont for example, all rally 0:15:48.320 --> 0:15:49.760 this morning in the European session, so. 0:15:50.040 --> 0:15:51.000 A massive move there. 0:15:51.000 --> 0:15:52.880 And I also add, I mean we're talking about China 0:15:52.880 --> 0:15:54.800 in the US, but I really think the Middle East 0:15:54.880 --> 0:15:56.720 is worth thinking about as well, because if you go 0:15:56.760 --> 0:16:00.320 to London, you go to what's the high Street London. 0:16:01.040 --> 0:16:01.720 I should know this. 0:16:01.880 --> 0:16:03.800 I mean, I like the King's Road Kensington. 0:16:03.840 --> 0:16:05.560 If you go to like anywhere in Kensington or Chelsea 0:16:05.640 --> 0:16:08.160 or whatever, there's so many Middle Eastern people from the 0:16:08.200 --> 0:16:09.760 Middle Eastern shoppers. 0:16:09.320 --> 0:16:11.200 And the cars they have, yeah, are pretty cool. So 0:16:11.400 --> 0:16:13.200 I'm looking at Tapes Street. The stocks down eleven and 0:16:13.240 --> 0:16:14.760 a half percent, so I guess the market doesn't like 0:16:14.760 --> 0:16:16.200 I say, paid a big premium here. 0:16:16.320 --> 0:16:18.920 Yeah, it's like a sixty five percent premium, and. 0:16:19.280 --> 0:16:21.800 Not that the market's not in it for Tap Street, 0:16:21.840 --> 0:16:25.440 so maybe a dilution concern there for those Oxford streets. 0:16:25.480 --> 0:16:26.800 Oxford Street is another one. 0:16:26.960 --> 0:16:28.560 There are a number of high streets in London. 0:16:28.600 --> 0:16:30.640 And it's funny to hear that question from you because 0:16:31.400 --> 0:16:34.080 the term high street, I think, is a British term, right, 0:16:35.000 --> 0:16:37.360 And you're going to be moving to London soon, I am, 0:16:37.760 --> 0:16:40.640 So you'll be walking up and down Oxford Street. 0:16:40.680 --> 0:16:42.120 Youre going to acquire a little bit of an accent, 0:16:42.120 --> 0:16:42.480 do you think. 0:16:43.080 --> 0:16:45.640 No, I'm gonna go over. I'm gonna start saying y'all. 0:16:45.680 --> 0:16:48.040 And I was gonna say, she's from Dallas and she 0:16:48.080 --> 0:16:49.680 doesn't have an accent from there. 0:16:49.840 --> 0:16:52.160 So well, that took work, you know, I had to. 0:16:52.200 --> 0:16:54.000 I went to UVA and the first thing they asked 0:16:54.040 --> 0:16:56.920 me was did you drive horses to school and Dallas? 0:16:56.920 --> 0:16:59.080 And I said no, But why would you think? Then 0:16:59.120 --> 0:17:00.920 they said, because you say you'll every second word. 0:17:01.240 --> 0:17:02.120 That was the end of it. 0:17:02.800 --> 0:17:05.439 Sometimes, you know, even in Virginia, go to southern Virginia, it's. 0:17:05.680 --> 0:17:07.560 To embrace y'all, To be honest, have you. 0:17:07.600 --> 0:17:10.040 It's a very useful word as opposed to. 0:17:11.880 --> 0:17:15.520 Oh well, don't ruin it. Oh oh it's a secret. 0:17:15.600 --> 0:17:18.000 Oh never mind, where Matt plans all my spares? He 0:17:18.040 --> 0:17:19.320 throw me a little birthday spare. 0:17:19.520 --> 0:17:21.440 When are you going through? That was the end of 0:17:21.440 --> 0:17:24.040 the end of August of August. 0:17:24.160 --> 0:17:26.640 Oh, anyone want to come over and pack because. 0:17:26.440 --> 0:17:29.200 It's fun, That's right? Okay, all right, So pritty Gupta 0:17:29.280 --> 0:17:31.760 with the reporting here today, A little M and a 0:17:31.920 --> 0:17:36.439 trade in the luxury tapestry buying capri. 0:17:36.800 --> 0:17:39.919 You're listening to the tape catch are Live program Bloomberg 0:17:40.000 --> 0:17:43.600 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:17:43.640 --> 0:17:45.720 tune in app, Bloomberg dot Com. 0:17:45.440 --> 0:17:46.840 And the Bloomberg Business app. 0:17:46.920 --> 0:17:49.719 You can also listen live on Amazon Alexa from our 0:17:49.760 --> 0:17:54.840 flagship New York station. Just say Alexa play Bloomberg eleven thirty. 0:17:55.560 --> 0:17:58.119 Let's put this in the context. Lydia Bosor can do that. 0:17:58.160 --> 0:18:02.000 She's a senior economist at e Why Parthenon and she 0:18:02.200 --> 0:18:05.439 joins us here, Lydia, what's your take here as you 0:18:05.480 --> 0:18:07.639 dig into some of the inflation data we got today? 0:18:09.119 --> 0:18:13.640 Sure, I mean the report was encouraging. We saw that 0:18:14.359 --> 0:18:16.920 back to back, the smallest back to back increasing in 0:18:17.160 --> 0:18:20.360 core inflation. As you mentioned, since early twenty twenty one. 0:18:21.000 --> 0:18:23.920 We also look at those three months annual life train 0:18:24.040 --> 0:18:27.159 for both headline and core inflation, and here as well, 0:18:27.560 --> 0:18:30.320 we saw a significant slowdown. If we dig a little 0:18:30.320 --> 0:18:33.720 deeper in the component, we are seeing that these inflation 0:18:33.880 --> 0:18:37.159 in use car prices which declined in July, and we 0:18:37.240 --> 0:18:39.879