Speaker 1: This is Bloomberg Surveillance. If anybody needs capable management teams
Speaker 1: for the future, it's the commercial banks, right, They're not
Speaker 1: going to go away. The business isn't going to go away.
Speaker 1: It's not as sign that the economy if not prosper
Speaker 1: if the fact that in places only one passet, I
Speaker 1: don't get it. The fourth Courter was bad in terms
Speaker 1: of g d P, it was a bad in terms
Speaker 1: of jobs. In fact, it was fantastic in terms of
Speaker 1: jock growth. And that's what's the most important. Bloomberg Surveillance
Speaker 1: your link to the world of economics, finance, and investment.
Speaker 1: On Bloomberg Radio, Good morning everyone, Bloomberg Surveillance. Scarlet Foo
Speaker 1: in for Michael mckeh on this Friday morning. I'm Tom Keene.
Speaker 1: We welcome all of you. Bloomberg twelve Boston, Bloomberg FM, Washington,
Speaker 1: Bloomberg eleven three on New York. Good early morning out
Speaker 1: in San Francisco, the Bay Area, Bloomberg nine sixty. We
Speaker 1: say good morning as well. A retail focus in this
Speaker 1: our honor to bring you Howard di Vin Evans, who
Speaker 1: has really been really, really, really quite good on the
Speaker 1: challenges of retail. Boy did he get out front of
Speaker 1: the challenges of Macy's and Coles and others, and we'll
Speaker 1: talk to him. Get an update on the pulse of
Speaker 1: retail America first, so we look quickly at foreign exchange. UH.
Speaker 1: The four X Briefest morning brought you my Interactive Brokers
Speaker 1: winner of f FX Weeks two thousand and fifteen award
Speaker 1: for the best Retail for X trading platform visit ib
Speaker 1: at ib kr dot com slash four x yen one
Speaker 1: thirteen thirty nine week er yen three days in a row,
Speaker 1: Euro under one one nine seventy four euro a weakness,
Speaker 1: dollar strength off g DP movement, a little better GDP
Speaker 1: number than expected. I think we'll leave it there this morning.
Speaker 1: I mean, the Sterling doing better and as well, David.
Speaker 1: I don't want to rip up your script, but um
Speaker 1: Gap needs a miracle, right I mean? I mean, I mean,
Speaker 1: if we're gonna have a Howard on on retail, can
Speaker 1: you start with Gaffer? Is there something more important than
Speaker 1: we can start there? Why not? They mean they need something,
Speaker 1: no question. GAP shares down about two percent in early trading.
Speaker 1: The largest US focused the pail retailer that's Gaps claimed
Speaker 1: the fame they expect earnings for the current fiscal year
Speaker 1: to be two dollars twenty five cents to share. It
Speaker 1: best the high end of gaps forecast range, trailed analyst
Speaker 1: averagessetment in the Bloomberg survey by nineteen cents. And then
Speaker 1: you have J. C. Penny, which is up more than
Speaker 1: fourteen percent in early trading. The department store chains fourth
Speaker 1: quarter profit and sales topped analysts estimates, at least the
Speaker 1: ones we surveyed here at Bloomberg UH, and the results
Speaker 1: showed Penny chief executive Marvin Allison is making progress and
Speaker 1: turning around the company looking beyond retail. You've got Kraft
Speaker 1: Hinds up five and a half percent. The food makers
Speaker 1: fourth quarter earnings and sales beat estimates. Craft Huns, of
Speaker 1: course formed last year in a deal orchestrated by private
Speaker 1: equity firm three G Capital and Warren Buffettsbergshire Hathaway, so
Speaker 1: they're among the winners. In response to those results, Monster
Speaker 1: evers O down five percent. The energy drake maker's profit
Speaker 1: and revenue trail the average estates for the third time
Speaker 1: in the past four quarters. UH some more well received
Speaker 1: earnings reports. You've got the networking software maker Palo Alto
Speaker 1: Networks up seven and a half percent. The data analysis
Speaker 1: software makers Splunk of six months Splunk splk is the
Speaker 1: ticker of sixty and a half percent, and Stamps dot
Speaker 1: Com of twenty four and a half percent, all in
Speaker 1: response to well receive so in South Andwestern Energy though
Speaker 1: down eleven and a half percent, the shale producer with
Speaker 1: a fourth quarter loss as revenue trail estimates, and then
Speaker 1: you have son Edison a lot of pieces to this story.
Speaker 1: Stocks up thirty percent in early trading. Hatchman manager David
Speaker 1: Temper's attempt to block the company's proposed purchase of Vivian
Speaker 1: Solar was turned away by a Delaware judge who well
Speaker 1: the tempers Apolution management couldn't prove the deal hurts investors,
Speaker 1: and son Edison's Terraform power unit now Vivin Solar, up
Speaker 1: thirty seven and a half percent in early rating. Apple
Speaker 1: Loosa has a nine and a half percent stake in
Speaker 1: terror Form, and that stock is down eight and a
Speaker 1: half percent. Weight Watchers International down twenty percent. The weight
Speaker 1: loss company that partnered with Oprah Winfrey Land reported an
Speaker 1: unexpected fourth quarter of loss. The number of act of
Speaker 1: subscribers dropped four point eight percent, and finally, Republic Airways
Speaker 1: Holdings not stock down eighty two percent, sixty two cents
Speaker 1: to share the regional jet owner file for bankruptcy Republic
Speaker 1: Side and effect of a lack of pilots during a
Speaker 1: contract dispute last year. David Wilson, thank you so much.
Speaker 1: Appreciate that. And now we're bring in a hard did
Speaker 1: its associates who has given us just terrific perspective and
Speaker 1: way out front Gap stores. Just as one example, folks,
Speaker 1: I'll put the chart out on Bloomberg Radio Plus. Basically
Speaker 1: it's made up eighty percent of the success coming out
Speaker 1: of four five years ago. How how bad is it
Speaker 1: out there? I want you to give me a reasoned
Speaker 1: analysis of the state of retail getting out of the
Speaker 1: ugly spring. They get to summer and they've got a
Speaker 1: regroup for back to school. What's the strategy. Well, for Gap,
Speaker 1: they're in a segment that is almost all bad American
Speaker 1: eagloued Fit is gas. Yeah, I mean every in the
Speaker 1: apparel chain business at Apochromie, you're gonna find very few
Speaker 1: arrow posts that you're gonna find very few winners and
Speaker 1: almost all loses Jay Crew a disaster, So they're in
Speaker 1: a business where everybody is in collapse, including them. The
Speaker 1: good news about the Gap is they're richer than everyone else.
Speaker 1: They're balance sheet is a monster, sitting with a billion
Speaker 1: in cash, no debt. So this is a powerhouse company
Speaker 1: that is not going away. They're still making money, they
Speaker 1: have positive cash flow, they got lots of money. They
Speaker 1: just keep closing stores and the future is uncertain. That's
Speaker 1: the problem with the Gap. A little headline coming out
Speaker 1: love more on this Honeywell offers a hundred eight dollars
Speaker 1: per share to quote re engage with U t X.
Speaker 1: That's away from how our divid of its expertise, but
Speaker 1: certainly important. U t X uh surging from eight seven
Speaker 1: up to nine and the new wagers up another ten dollars.
Speaker 1: Scarlett quickly, No. I wanted to get to Howard in
Speaker 1: terms of what we see across the retailers. Is this
Speaker 1: idea that these companies are big on promotions. When do
Speaker 1: we or do we ever start to see margin expansion? Well,
Speaker 1: we would never as long as you've got poverty doubling
Speaker 1: in the last seven years, which of course has been
Speaker 1: what we had one out of twelve in poverty. We
Speaker 1: now have worn out of six and poverty seven years later.
Speaker 1: As long as you've got that scarlet across America, as
Speaker 1: long as Macy's is now building discount stores, as long
Speaker 1: as North from fastest growth A discount stores, as long
Speaker 1: as Sacks fastest growth a discount stores, as long as
Speaker 1: d J d J Max is the most power full
Speaker 1: of parel retailer in the United States by far, and
Speaker 1: as long as traditional walls are closing, then as long
Speaker 1: as the middle class is decimated, Uh, you've got a
Speaker 1: smaller and smaller piece of America with money and the
Speaker 1: aspirational middle class is killed forever because of on that
Speaker 1: and everything else, it's not going to change. So retailing
Speaker 1: has changed forever, and price it will be more important forever.
Speaker 1: Bed Bathroom Beyond. Can you imagine a thinking of giving
Speaker 1: up coupons because this sacrilege sound It is unbelievable sacrilege. Well,
Speaker 1: speaking of bed bathroom Beyond, one of its rivals, certainly
Speaker 1: on a higher end, would be restoration hardware. One thing
Speaker 1: I found very interesting is the commentary from the CEO
Speaker 1: Gary Freeman. He talked about how a bear market wouldn't
Speaker 1: be all bad news for the company because it could
Speaker 1: bring lower real estate prices, which would help the change.
Speaker 1: Is that the I think that's one of the craziest comments.
Speaker 1: I but look, Gary Friedman is a brilliant, brilliant guy.
Speaker 1: He is a groundbreaking guy. He's done the most exciting
Speaker 1: thing in furniture in fifty years. There is no there's
Speaker 1: no one like them right now. If you take that
Speaker 1: explanation and the real estate, that's a little looney, uh
Speaker 1: what they don't think he is to change the real estate,
Speaker 1: but he gave fifty reasons. He is the real One
Speaker 1: of the key reasons that happened to him. He's in
Speaker 1: a business that's out on the fashion edge. That's what
Speaker 1: made him so great. Now, when you go out on
Speaker 1: the fashion edge and the slightest ripple happens, you're screwed.
Speaker 1: And that he he's in that kind of a business.
Speaker 1: Did he expand too quickly? You've seen this a million times.
Speaker 1: This is Gary Friedman. This guy is going wild. He's
Speaker 1: opening up giant he's doing Okay, are there elements here
Speaker 1: of an abercarbiean Fitch were a dominant met Neddick CEO
Speaker 1: gets out in front of trends or his p and l. Yes. Possibly,
Speaker 1: but but this guy has done so much good stuff,
Speaker 1: all right, I'm hesitant to say that yet because he's
Speaker 1: created America. I mean, he's chased his entire into Since
Speaker 1: home Depot, we've never had anything like this the invention
Speaker 1: of home depot actual depot fifteen years ago. Try and
Speaker 1: threw away five million dollars in liquid. How how we're
Speaker 1: gonna go to break in and and move forward very quickly? Howard,
Speaker 1: we saw home Depot and lows with solid things store sales.
Speaker 1: Can your world of retail pull over the home Depot excellence? Yeah?
Speaker 1: I look the home sector. They're the kings of the
Speaker 1: home sector. Now if you look at some other people
Speaker 1: in the home sector, they're not so fantastic. But clearly
Speaker 1: Home Depot and Lowe's have a formula. And here is
Speaker 1: the difference between restorational lordwearing, Home Depot Home deep cells
Speaker 1: what you have to have as hard whistling great, they
Speaker 1: sell what you have. Now low cells what you have
Speaker 1: to have you don't have to have anything in restoration hardware,
Speaker 1: you don't have to have it. So he's when the
Speaker 1: market gets volable, anything Restoration Hardware. Okay, Howard, this is phenomenal.
Speaker 1: Stay with us. Hard to us with this. You heard
Speaker 1: his support Mr Freeman over Restoration Hardware, which has been
Speaker 1: a modest implosion, to say the least, futures the last restoration.
Speaker 1: I've not been in the store, but I do do
Speaker 1: things off their website. I think they're They're just I
Speaker 1: don't know what they do. The furniture is too big.
Speaker 1: I know I've seen the ceiling fan picture on your website.
Speaker 1: On your all right, let's check in with John Tucker
Speaker 1: for the news headlines. John find Scarlett. Donald Trump spent
Speaker 1: eight months launching at parative insults over any on all.
Speaker 1: Detractors of Marco Rubio's survived by staying mostly in the sidelines.
Speaker 1: Rubio suddenly and urgently emerged from the shadows last night
Speaker 1: to hammer the front runner. The House considering a bill
Speaker 1: that would reverse the man on the sail or import
Speaker 1: of ivory products on doing US fish and Wildlife rules
Speaker 1: that were intended to halt the decline in wild elephant populations,
Speaker 1: and the conventional wisdom was that California, especially the southern
Speaker 1: part of the state, would be awash this winter with
Speaker 1: rain and the valleys and deep snow in the mountains.
Speaker 1: Almina was on the way to save the day. Well,
Speaker 1: a California hydrologist now says the water supply forecast for
Speaker 1: the spring period is falling like a stone. Global News
Speaker 1: twenty four hours a day, powered by our twenty journalists
Speaker 1: in more than one hundred fifty news videos around the world.
Speaker 1: I'm John Tuckers Scarlet and to John, thank you so much.
Speaker 1: Future futures up one oh for Tom Keene and Scarlet
Speaker 1: Foo on your Friday edition. Bloomberg Surveillance Worldwide Market Driver
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