Speaker 1: This is Bloomberg Business Week Daily, reporting from the magazine
Speaker 1: that helps global leaders stay ahead with insight on the people, companies,
Speaker 1: and trends shaping today's complex economy. Plus global business finance
Speaker 1: and tech news as it happens. Bloomberg Business Week Daily
Speaker 1: with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2: Hi, everyone, Welcome to the weekend edition of Bloomberg Business Week.
Speaker 2: Earning season is not quite done yet. A lot of
Speaker 2: consumer facing companies out with results, including Wayfair and Walmart.
Speaker 2: This past week.
Speaker 3: We catch up with Wayfair CFO Kate Gulliver on the
Speaker 3: supply chain and how consumers are spending.
Speaker 2: The world's largest physical retailer reported to This week, Walmart
Speaker 2: issued a forecast for full year earnings that missed higher expectations,
Speaker 2: flagging the unpredictable state of trade and labor market conditions.
Speaker 3: We go around the retail space with a great analyst
Speaker 3: and look at how retailers are keeping customers interested and
Speaker 3: how they're using technology to keep up with demand and
Speaker 3: compete with Amazon.
Speaker 2: Plus, President Trump has called bluff on the era of
Speaker 2: the good corporate citizen. Leaders of businesses from Hilton to
Speaker 2: home Depot and more have been largely silent, demuring or
Speaker 2: hedging when prompted to criticize the President Trump, we talk
Speaker 2: corporate complicity, and in.
Speaker 3: Our second hour pop music sensation Bad Bunny driving people
Speaker 3: to learn Spanish, we catch up with the CEO of Babbel.
Speaker 2: We begin with earnings and a read on the consumer
Speaker 2: thanks to Wayfair CFO Kate Gulliver, who shared what her
Speaker 2: company's earnings can tell us about the health of the
Speaker 2: shopping public.
Speaker 4: Maybe let's step back and sort of speak to the
Speaker 4: quarter we just reported, and I'm happy to shift a guidance.
Speaker 4: You know, we feel really great about the quarter we
Speaker 4: just reported. I think it highlighted and capped off a
Speaker 4: year of incredible momentum for us. We opened up the
Speaker 4: year flat, we you know, exit of the year at
Speaker 4: seven percent, revenue growth eight percent, you know, managing for
Speaker 4: the exit of Germany, and we flowed through to improved
Speaker 4: EBITDA grew year over year about sixty percent. Right, So
Speaker 4: we're seeing both ongoing market share gains and improved profitability.
Speaker 4: And that story continues with our guide into Q one.
Speaker 4: We feel really good about the guide. The you know,
Speaker 4: mid single digits revenue growth and improved to justin Ebata
Speaker 4: throughout the quarter. So you know, when we look at it,
Speaker 4: we feel that we produced pretty strong results.
Speaker 2: Yeah, I mean you look at the quarter, I mean
Speaker 2: just at EPs, better than what the street was expecting,
Speaker 2: just at Ebada, as you said, coming in stronger, net
Speaker 2: revenue up about seven percent year over year, gross margin,
Speaker 2: coming in better than the street estimate. There were a
Speaker 2: lot to do. So maybe we talk a little bit
Speaker 2: about you know, I am curious. You know, you guys
Speaker 2: have dealt with the call and so on and so forth.
Speaker 2: What are you hearing from the investment community that they're
Speaker 2: not just so comfortable with Kate.
Speaker 4: Yeah, you know, actually, you know, as we talked to investors,
Speaker 4: I think again they're they're pleased with the momentum that
Speaker 4: we see here. You know, obviously we're in a category
Speaker 4: that has been under pressure, right, so the category itself,
Speaker 4: we think was downlows digits in the fourth quarter, you know,
Speaker 4: to your earlier questions sort of around whether in the
Speaker 4: first quarter, we do think the category has been impacted
Speaker 4: in the first quarter of this year, you know, likely
Speaker 4: you know, download single digits again, maybe slightly worse even
Speaker 4: than Q four. So there's certainly some complexity in the
Speaker 4: overall category here. You know, what can we focus on?
Speaker 4: We can focus on what we can control, and our
Speaker 4: share gain continues to be a real source of strength.
Speaker 4: You see us outstripping a category by several points, right,
Speaker 4: and that's continued, you know, Q three, Q four and
Speaker 4: then again into the guide in Q one.
Speaker 2: And we should point out that investors have been really
Speaker 2: keen on your stock, I mean, nearly doubling over the
Speaker 2: past year. Kate, let me just go to what you said.
Speaker 2: I mean, maybe it is those concerns about some softer
Speaker 2: active customer trends kind of early on in the first quarter.
Speaker 2: Do you give us an idea of what you're seeing
Speaker 2: in any idea or can you tell us if it continues?
Speaker 4: It's a great question. So active customers is one of
Speaker 4: our reported KPIs. It's actually a lagging indicator. Okay, that
Speaker 4: metric is l active customers. So anyone who'd sort of
Speaker 4: placed an order within the last twelve months, and as
Speaker 4: orders grow, and you do see that order volume grew
Speaker 4: in Q three and in Q four, that sort of
Speaker 4: precedes active customer growth. The other thing I do just
Speaker 4: want to point out there is we did exit in
Speaker 4: January of last year or German Business, So that took
Speaker 4: a large chunk of customers or not a large chunk,
Speaker 4: but a chunk of customers out of that number. And
Speaker 4: so as you're looking at that active customer number, you know,
Speaker 4: obviously that came out, so we'll clear that comp you know,
Speaker 4: we exited that in January of this past year.
Speaker 3: You did say the sector has been under pressure, and
Speaker 3: Carol mentioned some of the peers, but what about the
Speaker 3: Wayfair consumer. When they're buying something on the platform right now,
Speaker 3: are they buying it because they need to replace something
Speaker 3: in their home. Are they buying it because they have
Speaker 3: extra money to upgrade something. What's the profile of the
Speaker 3: consumer and in other words, how is the consumer doing.
Speaker 4: It's a great question. We're seeing a few trends. So
Speaker 4: you mentioned some of the sort of luxury peers. Obviously,
Speaker 4: we have high end brands that do compete with those players,
Speaker 4: like a paragold or specialty retail brand. The Wayfair brand itself,
Speaker 4: you know, plays all the way from opening price point
Speaker 4: to you know, upper end mass, so really spans the
Speaker 4: full range, and we have seen, you know, a divergence
Speaker 4: some of that ke shaped economy. I'm sure we've all
Speaker 4: been talking about now for a bit. Certainly our paragold
Speaker 4: brand or specialty retail brands are growing, you know, really
Speaker 4: north of twenty percent we said in twenty twenty five,
Speaker 4: so you can see that accelerating beyond you know, the
Speaker 4: overall core business. And I think that speaks to the
Speaker 4: strength and that you know, higher net worth consumer. We
Speaker 4: also do see a bit of a divergence in the
Speaker 4: types of things that people are buying. When I talk
Speaker 4: about the category being down low single digits, that's a
Speaker 4: category overall. We actually think furniture or bigger ticket items
Speaker 4: are down more. That tends to actually be where we
Speaker 4: you know, are more focused and have a bigger part
Speaker 4: of the business. But you know, we also of course
Speaker 4: sell decorative accent, seasonal decor. That part of the business
Speaker 4: seems to have done a bit better from a category
Speaker 4: perspective overall, So those would be lower ticket items you know,
Speaker 4: that may feel more comfortable for folks to purchase right now.
Speaker 2: Well, and one the other thing I want to ask
Speaker 2: you and listen, Kate, we're obsessed with this the buy now,
Speaker 2: pay later, and you can do that on Wayfair too.
Speaker 2: Are you seeing an uptick in that.
Speaker 4: You know, we have a number of options, you know,
Speaker 4: for various financings and buy now pay laters. We work
Speaker 4: with a wide range of partners. I do think it's
Speaker 4: an important offering for the consumer, so you know, to
Speaker 4: you know, sort of sort of ensure good underwriting for
Speaker 4: folks and provide them with a lot of optionality. I
Speaker 4: would say our penetration there has been lower than other
Speaker 4: more traditional brick and brick and mortar furniture retailers, So
Speaker 4: you know, as we grow, we're really trying to get
Speaker 4: to you know, sort of a more natural place there
Speaker 4: for the furniture industry overall.
Speaker 3: We're speaking with Kate Goliver, CFO of Wayfair, joining us
Speaker 3: from Boston.
Speaker 2: You know, Kate, one of the other things that we've
Speaker 2: talked with you about is the physical stores, and you
Speaker 2: have noticed some encouraging early performance from the physical stores
Speaker 2: when it comes to brand engagement and cross channel lift.
Speaker 2: As you think about or as you kind of move
Speaker 2: from proof of concept to a potential expansion, what specific
Speaker 2: performance thresholds are you kind of focusing on and would
Speaker 2: justify accelerating the physical store growth.
Speaker 4: Yeah, it's a great question. So we look at the
Speaker 4: economics of the store itself, so purchases that are directly
Speaker 4: attributable to the store, and the economics of you know,
Speaker 4: operating that store. So as you think about the overall store,
Speaker 4: four wall, P and L. But one of the unique
Speaker 4: things about you know, building stores who already have a
Speaker 4: well established e commerce brand is you do get to
Speaker 4: see a benefit in the area for the brand overall.
Speaker 4: So the other thing that we look at is, you
Speaker 4: know what in sort of industry partlance you might call
Speaker 4: the halo effect, but really sales that are attributable to
Speaker 4: folks that maybe came into the store and then you know,
Speaker 4: left and went and bought something, or you know, had
Speaker 4: an idea about the store being in the area because
Speaker 4: they've heard more about it and therefore then shopped and
Speaker 4: or rep platform. And we've seen that continue to hold
Speaker 4: in really nicely. We gave a stat in our updated
Speaker 4: investor presentation today that the first store, which is in Chicago,
Speaker 4: if you look at the entire state of Illinois versus
Speaker 4: the rest of the country since the store opened, it's
Speaker 4: had a ten percent cag or higher than the rest
Speaker 4: of the country. Wow, And that gives you a sense
Speaker 4: of you know, the momentum that you can get from
Speaker 4: the store. It's obviously very crude metric, but it's an
Speaker 4: easy way to sort of explain it. So we really
Speaker 4: look at the combination of the store, P and L
Speaker 4: and then the other benefits that come along with having
Speaker 4: the store.
Speaker 2: Well, that makes me want to follow, Like what metrics
Speaker 2: would cause you to maybe remain a little bit more cautious,
Speaker 2: So like if you open another store and the metrics
Speaker 2: aren't so you're not seeing that kind of momentum that
Speaker 2: you're getting in the Chicago store, Wed just just say, Okay,
Speaker 2: maybe it just depends on the city of the environment,
Speaker 2: Like there's a lot of specifics that can go into it.
Speaker 4: Yeah, you know, I think our focus right now is
Speaker 4: on learning more about what makes a great store.
Speaker 5: Right So, we.
Speaker 4: Have one store open. We're planning to open three more
Speaker 4: in twenty six. We have one opening soon in the
Speaker 4: Atlanta air another one this summer in Columbus, and then
Speaker 4: in the fall and Denver. These will be, you know,
Speaker 4: the Columbus store, for example, seventy thousand square feet versus
Speaker 4: the you know, other stores are roughly around one hundred
Speaker 4: and fifty thousand square feets. So we're testing out a
Speaker 4: slightly smaller format. We're testing out different types of shopping
Speaker 4: areas where we put the store, and so we intend
Speaker 4: to learn and then continue to refine the store model
Speaker 4: based on those learnings. So let me do you know,
Speaker 4: we are quite excited about it as a channel.
Speaker 3: Hey, let's go from sort of like the old school
Speaker 3: store retail model to than what you're doing with AI and.
Speaker 2: Layers stores old school, So.
Speaker 6: They are I mean cutting back with channel.
Speaker 4: We like the overall omni channel experience, but how.
Speaker 3: Do you layer in personalization with AI? And I'm curious
Speaker 3: how you do that in a way that actually makes
Speaker 3: you more competitive in this area.
Speaker 4: Yeah, we're we're really excited about what we can do
Speaker 4: with AI from the customer experience perspective, and we've already
Speaker 4: started some of that and pilot with that on the
Speaker 4: site and there's certainly more to come there.
Speaker 7: You know.
Speaker 4: I think this category is a bit unique in that
Speaker 4: respect because it's a category that is a highly emotive category. Right,
Speaker 4: it feels very personal to folks. It's not a commodity
Speaker 4: category where you're doing sort of standard replenishment. You want
Speaker 4: to get a better sense and see the actual options
Speaker 4: out there. The brand is important, you know, our brand
Speaker 4: is important because you want to ensure the delivery experience
Speaker 4: is high quality. So we think that the category itself
Speaker 4: lends itself to bringing people to our site and engaging
Speaker 4: them in a unique way. One thing that we can
Speaker 4: do with AI is help get more personalized for your
Speaker 4: style preferences. You know, I'm sure if the three of
Speaker 4: us were to pick an end table, we'd all pick
Speaker 4: different end tables. What we'd love to do is make
Speaker 4: sure that when we land on the site, we're serving
Speaker 4: up to each of us exactly that end table that
Speaker 4: we want. Generative AI allows us to do that in
Speaker 4: a faster, more nimble way. It also allows you to
Speaker 4: pay around a discovery So if you were to go
Speaker 4: on the app today into the discovered tab, you'd see
Speaker 4: a whole images and you can create more yourself if
Speaker 4: you want that. Are you know Jenny I created that?
Speaker 4: Then allow you to shop the catalog based on the
Speaker 4: type of room that you're designing or the aesthetic look
Speaker 4: that you're looking for. And I think that kind of
Speaker 4: engagement and interaction is really compelling in this category.
Speaker 2: So I know, Kate, if we had asked Tim, like,
Speaker 2: if we were going you, me and him shopping for pillows,
Speaker 2: you know he would say, no more pillows. I don't
Speaker 2: know about your household, but that's what happens in my
Speaker 2: house anyway.
Speaker 4: What originally people have an insatiable demand for pillows, so
Speaker 4: we will keep telling.
Speaker 2: Them, Thank God, thank God.
Speaker 6: That's wayfair.
Speaker 2: CFO Kate go over coming up around the world of
Speaker 2: retail with someone who knows it like no other.
Speaker 6: You're listening to Bloomberg Business Week. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week Daily with Carol Masser and
Speaker 1: Tim Steneveek on Bloomberg Radio.
Speaker 2: We've been focusing a lot on the k shaped economy
Speaker 2: on Bloomberg BusinessWeek Daily. Retail always gives a great look
Speaker 2: on this. Delinquency rates, for example, on loans ranging from
Speaker 2: mortgages to credit cards, rose to four point eight percent
Speaker 2: of all outstanding US household debt in the fourth quarter.
Speaker 2: That is the highest level since twenty seventeen, driven by
Speaker 2: higher defaults among low income and young borrowers.
Speaker 3: These data com as US retail sales unexpectedly stalled in December,
Speaker 3: suggesting consumers provided less firepower for the economy as the
Speaker 3: year drew to a close. Dana Telsea is founder, CEO,
Speaker 3: and chief Research officer of Telsey Advisory Group. She joined
Speaker 3: us to discuss all things retail one caveat. We caught
Speaker 3: up with her before Walmart reported results more broadly.
Speaker 2: Like Tim said, we did kind of want to start
Speaker 2: a little bit broad with you. I mean, we got
Speaker 2: US retail sales unexpectedly stalling in December, suggesting consumers provided
Speaker 2: less firepower for the economy as the year drew to
Speaker 2: a close. On that print, did your own analysis, Dana,
Speaker 2: you know you do great channel checks and you have
Speaker 2: all your own research.
Speaker 5: Did it match up with what we saw? We saw
Speaker 5: a solid holiday season, we've seen four It was weaker
Speaker 5: after Black Friday to Christmas. It only picked up like
Speaker 5: the week before Christmas. The lull in the middle was
Speaker 5: deeper than expected coming out of January to Now. Keep
Speaker 5: in mind we've had terrible weather, you know, a better
Speaker 5: from the Northeast than the Midwest. People getting out pretty tough,
Speaker 5: and it was all about colder weather goods. So it's
Speaker 5: up and down. But I don't think anything is taking
Speaker 5: away from what we call the measured optimism in the
Speaker 5: consumer space. Whereas when you think about the events this
Speaker 5: year Winter Olympics, America, two fifty World Cup, all coming up,
Speaker 5: in tax refunds which are just starting now. Consumer has
Speaker 5: a lot of firepower to spend, and we're watching carefully
Speaker 5: the lower end. We just came out with our credit
Speaker 5: monitor this week, the credit monitor, which shows delinquencies are
Speaker 5: still on the rise, bad debt being impacted. You have
Speaker 5: student loans out there, so it's still upticking, but not
Speaker 5: at a real accelerated pace. It's something to be mindful of.
Speaker 3: What when would you go from being mindful of it
Speaker 3: to being concerned about it?
Speaker 5: If I heard about a slowdown in sales from all
Speaker 5: the different types of retailers. I mean, I think this year,
Speaker 5: could it be a discretionary year. We've had legacy companies
Speaker 5: like Victoria's Secret, like urban outfitters like The Gap do better.
Speaker 5: Why Because there's newness and product newness and store designs
Speaker 5: making it very compelling. So I'm watching some of these
Speaker 5: sales figures to see that are they able to maintain
Speaker 5: the expectations. What's gone more into the back burner. The
Speaker 5: waning impact of tariffs. Tariffs will be an impact for
Speaker 5: the first quarter but they won't be as big an
Speaker 5: impact through the year, and the continued focus on newness
Speaker 5: means companies are putting out newer products you don't have
Speaker 5: a comparison, so the price is maybe higher than they
Speaker 5: originally would have been.
Speaker 2: I want to go back to the consumer credit picture
Speaker 2: and delinquencies, because on the same day we got that
Speaker 2: retail sales report, we got delinquency rates on loans rising
Speaker 2: to four point eight percent of them all that standing
Speaker 2: US household debt in the fourth Court, that was the
Speaker 2: highest level since twenty seventeen. I hear something like that,
Speaker 2: and that's almost ten years. It makes me be like,
Speaker 2: whoa wait, is that impressive? I mean, is it impressive?
Speaker 2: Like you, how do you make sense that? I think
Speaker 2: they talked a lot about delinquencies and mortgage payments, particularly
Speaker 2: the lower income zip codes. Student loan delinquencies, like that's
Speaker 2: a real factor.
Speaker 5: They are real factors. It's very important to watch. That's
Speaker 5: why let's see what these tax refunds come in, because
Speaker 5: what will be used for some of the debt paydown
Speaker 5: that's out there.
Speaker 2: But to be fair, like student loans, if you've got
Speaker 2: student debt, how much of you're going to get in
Speaker 2: attack refunds is really going to make a debt.
Speaker 5: It doesn't make as much a debt. Okay, but a
Speaker 5: lot of times parents will pay off some of those
Speaker 5: student loans. So it depends who's doing those payments of
Speaker 5: the loans.
Speaker 6: Okay, what I was thinking about the cost of education.
Speaker 5: Yeah, by the time you go to be a million
Speaker 5: dollars a year, I just have the bots.
Speaker 8: Do you a.
Speaker 5: Plumber, be a electrician?
Speaker 9: I'm just saying, ok.
Speaker 3: Hey, I want to talk a little bit about the
Speaker 3: Olympics that are going on right now and sort of
Speaker 3: what it means in a world where media is so
Speaker 3: fraction and you don't have the same appointment viewing that
Speaker 3: we had the same idea of, you know, the big
Speaker 3: companies getting in front of everyone. We had Nike CEO
Speaker 3: on last week talking about a return to ACG and
Speaker 3: making a big push at the Olympics. How do you
Speaker 3: watch an event like the Olympics when it comes to retail.
Speaker 5: I think when you think about retail and who what
Speaker 5: brands are involved in the Olympics, I mean Ralph Lauren
Speaker 5: big time.
Speaker 2: You love it. You talk about Ralph Lauren a lot.
Speaker 5: Yeah, Well, you know why full price. If you look
Speaker 5: at the average unit retail selling prices, it's going up.
Speaker 2: You have a.
Speaker 5: Smaller brand who is doing good things with Olympics. This
Speaker 5: is their second Olympics they've been involved with. Figgs is
Speaker 5: outfitting the USA team, USA Medical Team, and that's something
Speaker 5: that they're becoming known for. I think there is awareness
Speaker 5: that comes from being part of the Olympics. I think
Speaker 5: people are watching the Olympics, even though some of the
Speaker 5: different time zones Winter Olympics. Whether it's figure skating, whether
Speaker 5: it's the loge, you name it there and there's a
Speaker 5: lot of good USA athletes that have done a really
Speaker 5: good job.
Speaker 6: Does it still move product, Yes.
Speaker 5: It moves and people want to be a part of it.
Speaker 5: Even just walk by store windows and you'll see product
Speaker 5: out there for the Olympics.
Speaker 2: So against all of this, you know, the Sachs bankruptcy,
Speaker 2: I know it was expected. Eddie Bauer been around for
Speaker 2: a long time. I feel like it's been twisting in
Speaker 2: the winds for a while. Store closing is of all Birds.
Speaker 2: I mean I found my pair of All Birds. I
Speaker 2: haven't been wearing them much, but I.
Speaker 5: Mean Francesca is another one.
Speaker 2: Significant or it's just the cyclical nature.
Speaker 5: Cickleical wave. When you think about what others are doing
Speaker 5: out there, more stores are opening their own brands. You
Speaker 5: have companies like Aritzia, who's gaining share only seventy two
Speaker 5: stores in the United States. So if old doesn't reinvent, yeah,
Speaker 5: they're going away. And that's why I mentioned before, look
Speaker 5: at Legacy that's reinventing urban outfit is Victoria's secret in
Speaker 5: the gap?
Speaker 2: What No, it's like it's fascinating to see because I
Speaker 2: agree with you that things are just going to change, right,
Speaker 2: it doesn't mean when we see it closing, it's going
Speaker 2: to be the end of a reg Well.
Speaker 5: The other thing talking about the retail real estate landlords,
Speaker 5: Simon Property, largest small developer in the country, just put
Speaker 5: out their results last week and you can hear from
Speaker 5: all the other landlords out there. There is more demand
Speaker 5: for space than supply. So even with the fifty seven
Speaker 5: or so sacks off fifth closings, the eight or nine
Speaker 5: full line closings, there's demand for this space.
Speaker 2: Is it high end though, that's always demand when it
Speaker 2: comes to malls or not.
Speaker 5: Necessarily because you take a look at things like look
Speaker 5: at the off pricers the TJ Max Ross stores Burlington.
Speaker 5: They're each opening one hundred stores a year. Restaurants are
Speaker 5: opening new stores. Look at the dollar stores, the Dollar Generals,
Speaker 5: Dollar Trees, they're.
Speaker 2: Also We just did a story about how they're opening
Speaker 2: increasingly in wealthier areas and because the wealthier or higher
Speaker 2: income individuals are shopping at these stores.
Speaker 5: People like treasure hunts and that's what this gives them.
Speaker 6: Okay, we're going all over. I thought you.
Speaker 2: I think you're going to go to the Ultimate treasure Hunt, No,
Speaker 2: which you know I love, But no, we're.
Speaker 6: Not doing that yet.
Speaker 3: You mentioned Gap, so I want to get back to GAP,
Speaker 3: and I'm now hearing from like truly from influencers that
Speaker 3: got you. I think you came in and told us.
Speaker 6: The Gap is back.
Speaker 5: It's cool.
Speaker 3: What has Gap done and been able to do in
Speaker 3: recent years to sort of like you know, it'll never
Speaker 3: I don't never say never, but the nineties for Gap
Speaker 3: were unbelievable.
Speaker 5: So now it's the parents and the kids they attracted
Speaker 5: and the reason why how brands are getting recognized today.
Speaker 5: Look at how viral things can go with influencers, brand ambassadors.
Speaker 5: You look at Instagram, the regular person is now your
Speaker 5: new celebrity who you want to look like them? What
Speaker 5: GAP's done. They're creative director of Zach Posen, partnered with
Speaker 5: Richard Dixon, the CFO. They blended product and marketing and
Speaker 5: wanted to give them awareness. They did that with whether
Speaker 5: it's K pop music stars. All of a sudden, you're
Speaker 5: doing that with different brands out there that they're making
Speaker 5: special collections for Gap, and they're also updating the stores.
Speaker 5: Check out the store on twenty first and fifth Avenue
Speaker 5: which has the new look Gap. It doesn't look like
Speaker 5: the old look Gap.
Speaker 2: So where's retail going? Like you know, I always think
Speaker 2: it's kind of wild you go into a Zara and
Speaker 2: you can check out yourself and like, you know, and
Speaker 2: part of me kind of likes that. You know, I
Speaker 2: can just do it. But where is retail going? In
Speaker 2: terms of trends, in terms of technology, in terms of
Speaker 2: the experience.
Speaker 5: I think, overall, where retail is going, it's where you
Speaker 5: want it to go. I think the personalized nature of
Speaker 5: retail because of the data that companies have about your preferences.
Speaker 5: I think the AI learnings that are being put in
Speaker 5: place as to when you shop, what price, you shop,
Speaker 5: what style you shop, and I think the marketing appeal
Speaker 5: of what's on Instagram, what's your favorites and what is
Speaker 5: celebrity's favorites or who the new celebrities are they become
Speaker 5: your favorites. I think it's moving faster than ever. It's
Speaker 5: made the supply chain of retailers become more embedded in
Speaker 5: being able to chase and I think overall you look
Speaker 5: at old brands becoming new again. Walk across the street
Speaker 5: to Bloomingdale's. There's more new brands and they've had in years.
Speaker 2: I was just talking about there ago with a friend
Speaker 2: of mine who's just like we talked about the transformation
Speaker 2: of Woomingdale's and against Sacks, which is obviously struggling. One
Speaker 2: thing I want to ask you Amazon, like I have
Speaker 2: noticed in stories and different things how aggressive they are
Speaker 2: in terms of fashion. Is that becoming a big deal
Speaker 2: for them?
Speaker 5: Not as big a deal yet there's still essentials, But
Speaker 5: what you are seeing is brands want their own Amazon
Speaker 5: shops on Amazon. Basically, what brands want today is they
Speaker 5: want where is the customer so they can interact.
Speaker 2: Even though Amazon might copy like what's popular. I mean,
Speaker 2: they have so much data on what's where people are buying.
Speaker 5: Why do people buy Levi's jeans or buy Calvin Klein
Speaker 5: jeans or wherever people want the brand and the fit, so
Speaker 5: they'll always be private label brands provide the halo.
Speaker 3: Can we talk big picture a little bit with like
Speaker 3: a company like Lulu Lemon, for example, going through CEO transition.
Speaker 3: You have Chip Wilson out there saying, you know you
Speaker 3: need to I have good ideas for this company.
Speaker 6: You have some product failure.
Speaker 3: Is that our Bloomberg News team has reported on with
Speaker 3: this idea of some of the leggings being see through.
Speaker 6: Is that brand on the outs?
Speaker 5: The brand? Obviously, if you're not gonna have a product
Speaker 5: that people want, that's a problem. But overall, you can't
Speaker 5: say it's on the outs because look at the amount
Speaker 5: of volume that it does with over ten billion dollars
Speaker 5: in sales. You look at the other act of where
Speaker 5: brands and they're not doing nearly that volume. And there's
Speaker 5: work that needs to be done to reinvent. I always
Speaker 5: call it to be at the top of a retail
Speaker 5: roller coaster. You need to reinvent, re merchandise from new
Speaker 5: juvenate time for Lulu to do that and I was
Speaker 5: just out there recently. New product is coming for this spring.
Speaker 5: Let's see how it does.
Speaker 2: So what about Okay? So Walmart's the big focus this
Speaker 2: week in terms of earnings. Next week we get Home
Speaker 2: Depot TJX. Week after we get Target Costco, Macy's, and
Speaker 2: a whole host of others. Throughout the next couple of weeks.
Speaker 2: Here TJX again, like I know this time, here we go.
Speaker 5: They should be they like the treasure, Hu, what did
Speaker 5: I do? They should be a barn burner. The other
Speaker 5: thing that's new for them, they're increasing their spend on
Speaker 5: market and as they've been recasing their marketing spend, they're
Speaker 5: seeing more traffic in the stores. So look what we
Speaker 5: talked about with gap marketing and product. Look what you
Speaker 5: got with TJ going on. No one would have ever
Speaker 5: thought that marketing would be as big a deal for them.
Speaker 5: It's turning into revenues. And let's not forget the other
Speaker 5: thing TJ has. They have home goods. Home goods is
Speaker 5: doing amazing. They have the most diversification of product assortment.
Speaker 5: I think twenty twenty six looks to be a very
Speaker 5: good year for TJ.
Speaker 2: It's so interesting though they don't really have an online presence. No,
Speaker 2: it's like just fascinating that they really don't because they've got.
Speaker 5: To go to the store.
Speaker 2: You have to go to this store.
Speaker 3: That's that part of because you can't really like find
Speaker 3: out what right, you know, you can't do.
Speaker 2: The treasure hunt.
Speaker 5: They love it. Yeah, and your very loyal customers will
Speaker 5: be there on Tuesdays and Fridays. They know when the
Speaker 5: new merchandise comes in. And frankly, having off price only
Speaker 5: gives iconic heritage to the full price merchandise because you
Speaker 5: know you're getting a deal on some of these brands.
Speaker 5: And look at the brands TJ has, they're better late.
Speaker 3: That was Dana Telsey, under CEO and chief Research Officer
Speaker 3: of Telsey Advisory Group for the full conversation, because we
Speaker 3: did talk everything from Amazon and Bloomingdale's to Nike, TJX,
Speaker 3: Carrol's favorite Walmart, and more. Check out our podcast feed.
Speaker 2: What's not the love?
Speaker 6: He love it?
Speaker 9: I do.
Speaker 2: It's all about the hunt.
Speaker 6: It's old school now, you know, you don't really find
Speaker 6: those deals online.
Speaker 9: I know, it's just kind of fun so way.
Speaker 2: It's kind of a they talk about retail therapy.
Speaker 6: I'm just gonna say.
Speaker 2: All right, still add on Bloomberg Business Week, how executives
Speaker 2: have worked to stay out of the fray a public
Speaker 2: political commentary.
Speaker 6: This is Bloomberg.
Speaker 1: This is Bloomberg Business Week Daily with Carol Masser and
Speaker 1: Tim Stenovek on Bloomberg Radio.
Speaker 2: Once President Trump was inaugurated in twenty twenty five, it
Speaker 2: became clear of that corporations would have to please not
Speaker 2: just their shareholders but also his administration lest they be
Speaker 2: targeted for lawsuits or regulatory reprisals, or by the rage
Speaker 2: of the maga movement at large.
Speaker 3: Just think back to that inauguration and who was there
Speaker 3: from the business world. As Bloomberg Businessweeks of Animal writes, quote,
Speaker 3: the Trump administration's actions on a whole host of issues,
Speaker 3: but especially it's brutal treatment of suspected immigrants have the
Speaker 3: general public looking for prominent people and institutions to use
Speaker 3: their power or influence like they did just a few
Speaker 3: years ago.
Speaker 2: She adds, this time, though, the country has been met
Speaker 2: with near total silence and has been left to speculate
Speaker 2: about why we got more from Amanda and the era
Speaker 2: of the good corporate citizen.
Speaker 3: If we think back to just a few years ago,
Speaker 3: the Pride Floweds, diversity and training initiatives, the ESG stuff, investing, hiring.
Speaker 3: That was kind of a blip. I learned from your
Speaker 3: story in the history of the role of a corporation
Speaker 3: in life, that's not really what corporations have done in American.
Speaker 1: History, Right.
Speaker 10: It's easy to have like a bit of recency bias
Speaker 10: about how corporations act relative to society. But when you
Speaker 10: look at sort of like the long sweep of corporate history,
Speaker 10: and I talked to an economic historian about this for
Speaker 10: for the column. You know, companies generally try to advance
Speaker 10: their own interests, which, like you know, it sounds obvious
Speaker 10: to say, but it can be hard to remember that
Speaker 10: because companies have gotten have have worked to have a louder,
Speaker 10: louder and louder voice in culture, in politics, in like
Speaker 10: all these areas of our lives that are not like
Speaker 10: so centrally focused on their own businesses, whatever that business
Speaker 10: might be, depending on the company. So, you know, before
Speaker 10: relatively recently, companies just sort of uh sought to stay
Speaker 10: out of politics in general because it was bad for business,
Speaker 10: but to quietly, privately sort of advance their own interests
Speaker 10: politically in in you know, through lobbying and all the
Speaker 10: ways that we're used to.
Speaker 2: So it's kind of like, you know, it's funny, I
Speaker 2: think your executives when you think about the guilded age, right,
Speaker 2: and the robber Barons and so on and so forth,
Speaker 2: and I think we have this romantic notion of the
Speaker 2: company town and the executives taking care of everybody. And
Speaker 2: I'm sure there was the case in some places, but
Speaker 2: I think maybe we are being a little bit naive
Speaker 2: about how it used.
Speaker 9: To be or no.
Speaker 10: Well, the robber Barons are actually an interesting case because
Speaker 10: this is where a lot of these sort of battles
Speaker 10: were worked out. Because during the time of the robber
Speaker 10: Barons you also had the rise of the labor movement.
Speaker 10: You had really active, really powerful, really militant unions in
Speaker 10: the United States. So the robber barons not only you know,
Speaker 10: adopted the forty hour work week and things like that
Speaker 10: in order to in response to fight from labor, but
Speaker 10: they also did things like established libraries and museums and
Speaker 10: do all of these, you know, get into the creation
Speaker 10: of the public good in order to sort of burnish
Speaker 10: their reputations because there was like an active organized counterpart
Speaker 10: that was trying to reveal them to be something other than,
Speaker 10: you know, entirely pro social. So they did this thing
Speaker 10: because all of those things because of public outcry.
Speaker 2: Well, it's interesting because I think, you know, some folks
Speaker 2: would say some of these billionaires and successful you know executives,
Speaker 2: they certainly donate, they do philanthrop you know philanthropy, and
Speaker 2: they're doing good things for society. I think though, and
Speaker 2: I want to get into your story, and we started
Speaker 2: talking before we even went on air. It's just this
Speaker 2: idea of go to Minneapolis and what is it that
Speaker 2: finally gets executives to kind of band together. Is it
Speaker 2: the first death or shooting by ice agents? Is it
Speaker 2: the second one? Is it the third one. It's just like,
Speaker 2: what's the bar for making people react? And even when
Speaker 2: the reactions happen, it's maybe not as as strong as
Speaker 2: we think.
Speaker 6: It should be.
Speaker 10: Right, Historically, we see a pretty high bar for companies
Speaker 10: to weigh in on politics. Like one of the classic
Speaker 10: examples is that during World War Two, American companies were
Speaker 10: pretty happy to do business with both sides of the
Speaker 10: war until Pearl Harbor, and then it was our interests
Speaker 10: or with the allies, and then it was you know,
Speaker 10: all hands on deck for the American side of the war,
Speaker 10: because there was an American side of the war at
Speaker 10: that point. And you also saw this during the Civil
Speaker 10: Rights movement that companies sort of stayed quiet on this
Speaker 10: until TV coverage of police brutality in the South was
Speaker 10: so horrific and the country was so horrified that they
Speaker 10: couldn't sit on the sidelines anymore. So you have that
Speaker 10: sort of happening again now. But people in corporate roles
Speaker 10: of corporate influence are even more shy than they were
Speaker 10: I think in those eras to weigh in on either side,
Speaker 10: because we had two videotaped killings that you know, everybody
Speaker 10: in the country probably saw part of at least and
Speaker 10: only then did we get like a very tepid statement
Speaker 10: from the Minnesota Chamber of Commerce with sixty local companies
Speaker 10: signing on to it. We didn't have, like we haven't
Speaker 10: had much national conversation from people of enormous influence in
Speaker 10: the business about any of those Like you.
Speaker 2: Think about Davos, right, everybody was gathered there like there's
Speaker 2: a place, but I don't know that there was like
Speaker 2: things that.
Speaker 3: Came out not about this, No, not at all. You know,
Speaker 3: you mentioned you talk about World War Two, the civil
Speaker 3: rights movement. You also write about apartheid and what happened
Speaker 3: with the jailing of Nelson Mandela in South Africa. After
Speaker 3: all of those historical events, you have something in the
Speaker 3: US in twenty ten happened Citizens United versus the.
Speaker 6: Federal Election Commission.
Speaker 3: Talk about what that does in that Supreme Court case
Speaker 3: does to change the role of a corporation as a citizen.
Speaker 10: Right, So what we see both historically and right now
Speaker 10: is corporation sort of trying to, you know, wiggle out
Speaker 10: of this mess by saying, we're not political, we don't
Speaker 10: have a role in politics. We are here to serve,
Speaker 10: you know, our customers, to run our business profitably for
Speaker 10: our shareholders, and that is that is it. But in
Speaker 10: twenty ten you have the Citizens United decision, and this
Speaker 10: is this was like the sort of culmination of a
Speaker 10: genuine forty year process in which, you know, corporate America
Speaker 10: decided they wanted a more active role in democracy, they
Speaker 10: wanted a more active role in politics. This started in
Speaker 10: nineteen seventy one with the Powell Memo, and the author
Speaker 10: of that memo became a Supreme Court justice just a
Speaker 10: few years later. So you have this process of the
Speaker 10: sort of like pro business you know, arguments being put
Speaker 10: into academia, into the intelligentsia, and pro business judges being
Speaker 10: put on courts. And that leads to this decision where
Speaker 10: it is now pretty easy for corporations to fund in
Speaker 10: a pretty limitless way political candidates. So corporations have a
Speaker 10: really loud voice in our politics, whether or not we
Speaker 10: always realize it, and so, which I think makes it
Speaker 10: extra notable that they're being quiet right now.
Speaker 2: So I love the title. So President Trump is called
Speaker 2: bluff on the era of good corporate citizen. The President
Speaker 2: has exposed an ugly truth about corporations. They're no longer
Speaker 2: even pretending to be good citizens. So it's an important point,
Speaker 2: Like it's like peelback or you know, pull back the
Speaker 2: curtain right and right of not being political. Yet there
Speaker 2: is so much money in politics, and we often talk
Speaker 2: about this that who's really represented when you go to
Speaker 2: Washington Is it the corporations who have very very deep
Speaker 2: pockets and have this ability to certainly get the attention
Speaker 2: of lawmakers. One of the other things I want to
Speaker 2: bring up, though, is something I think about a lot.
Speaker 2: Is the fiduciary responsibility though of a leader to not
Speaker 2: get in the crosshairs.
Speaker 3: I was thinking of your comments about this as soon
Speaker 3: as you know, when Amanda was talking earlier, because you said,
Speaker 3: as Carol often alludes to, is there is there any
Speaker 3: upside to actually weighing in here as a CEO?
Speaker 9: Right?
Speaker 2: Right, You've got this to protect your company and do
Speaker 2: every take actions that are in the best interests in protecting.
Speaker 3: Yourself and like doing what somebody thinks is quote the
Speaker 3: right thing. Right is not a metric that Wall Street
Speaker 3: judges the performance of a company on.
Speaker 6: Right.
Speaker 10: Yeah, I think that right now you have a lot
Speaker 10: of executives looking at the situation both political and sort
Speaker 10: of social in the country and going do we have
Speaker 10: more of a Do I, as a person even have
Speaker 10: more of a responsibility to my company's shareholders? Or do
Speaker 10: I have more of a responsibility to society as someone
Speaker 10: with influence?
Speaker 2: Right?
Speaker 10: And you know, I think one thing that is different
Speaker 10: about now than about twenty twenty is that the Trump
Speaker 10: administration is willing to use the levers of power in
Speaker 10: order to cajole or punish businesses that do or do
Speaker 10: not do things that the administration prefers. I think some
Speaker 10: you know, some executives are probably just straightforward Trump supporters,
Speaker 10: and they don't speak out because they like the administration's policies.
Speaker 10: Some probably don't like the administration's policies and don't speak
Speaker 10: out because they're afraid of reprisal. And if you know,
Speaker 10: the government acts in such a way that it harms
Speaker 10: their company, then like they probably haven't done their job
Speaker 10: as they understand it, according to their content, because they're
Speaker 10: you know, ultimate responsibility in their role is to their shareholders.
Speaker 10: So if they're doing things that they know could get
Speaker 10: them punished, then I think that that is the uh
Speaker 10: is the particular calculus that a lot of executives are.
Speaker 9: Doing right now.
Speaker 2: You know, I'm just thinking of someone's listening. We're running
Speaker 2: out of time, but it's like, oh, you know, I
Speaker 2: can just see the emails or whether we're being so
Speaker 2: and so forth. But it's why is this before we
Speaker 2: wrap up forty seconds important to point out? And is
Speaker 2: it that companies spend a lot of money in lobbying?
Speaker 2: Like what is what is your big takeaway? You think?
Speaker 10: You well, I think that it's important to understand companies
Speaker 10: as institutions of power and influence in American society. Business
Speaker 10: journalism is interesting and is worthwhile because these companies are
Speaker 10: important in the country, and discussing them like they're important
Speaker 10: means being serious about, like the types of influence they wield,
Speaker 10: even if it's political influence.
Speaker 3: That's Amanda Ball, senior reporter for Bloomberg business Week.
Speaker 2: I have to say, Tim, you know, and we talked
Speaker 2: about this with Amanda. I think because we've we've had
Speaker 2: guests on, we've had leaders on, we've had consulting firms
Speaker 2: that advise, you know, C suite leadership about why everybody's
Speaker 2: so quiet, And I think it largely has to do
Speaker 2: with nobody wants to be on the president's radar, right
Speaker 2: and all of a sudden come up in a social
Speaker 2: media post or a comment out of the Oval office.
Speaker 2: And I kind of get it. If you're a publicly
Speaker 2: held company, you do have a fiduciary responsibility to think
Speaker 2: about what's best for your company, what's best for investors.
Speaker 2: But it still feels a little uncomfortable.
Speaker 3: You know, I'm going to out myself as you know,
Speaker 3: watching some other shows on the on the television, but
Speaker 3: it reminds me of an interview that I saw Chris
Speaker 3: Christie give last week maybe or the week before. He
Speaker 3: was on the Bill Maher show on each and he
Speaker 3: talked about other Republican politicians because Chris Christie has been
Speaker 3: outspoken about President Trump, and Chris Christy's not in office
Speaker 3: right now, former governor of New Jersey.
Speaker 6: You're a former governor.
Speaker 3: But he said that privately he hears from Republicans in
Speaker 3: the green room when he goes on TV, and he
Speaker 3: says they say stuff to him that is very different
Speaker 3: than what they go and say publicly.
Speaker 2: All right, folks, That wraps up the first hour of
Speaker 2: the weekend edition of Bloomberg Business Week from Bloomberg Radio.
Speaker 2: Coming up in our next hour, Bad Bunnies halftime show
Speaker 2: at the Super Bowl translating into business for one company
Speaker 2: that might actually surprise you.
Speaker 3: Also, from a Ritz Carlton Reserve in Saudi Arabia to
Speaker 3: the world's first and only five star crews, We've got
Speaker 3: the Forbes Travel Guide twenty twenty six star Award.
Speaker 2: Also Monster jam Disney on ice Hands, so much more,
Speaker 2: and so we get a good read into how families
Speaker 2: are actually spending their free time.
Speaker 6: And maybe their discretionary income.
Speaker 2: Yes, that's a good point.
Speaker 3: It's Bloomberg BusinessWeek. That's Carol Masser. I'm Tim Stanevex.
Speaker 6: Stay with us.
Speaker 3: Today's top stories and global business headlines are coming up
Speaker 3: right now.
Speaker 1: This is Bloomberg Business Week Daily, reporting from the magazine
Speaker 1: that helps global leaders stay ahead with insight on the people, companies,
Speaker 1: and trends shaping today's complex economy. Plus global business, finance
Speaker 1: and tech news as it happens. Bloomberg Business Week Daily
Speaker 1: with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2: Plenty ahead our second hour of the weekend edition of
Speaker 2: Bloomberg Business Week, including a look at online education, how
Speaker 2: Coursera and Babel are making the grade when it comes
Speaker 2: to customers and expansion.
Speaker 3: Plus the family owned company behind the Ringling Brothers and
Speaker 3: Barnum and Bailey, Monster jam, Disney on ice, and how
Speaker 3: families are spending and using discretionary funds and discretionary time.
Speaker 2: I gotta tell you, I got a little nephew. It's
Speaker 2: actually my niece's son, so I don't know what you
Speaker 2: call grand nephew, but really into those monster jams, the
Speaker 2: monster trucks and stuff, and has gone with my brother grandfather.
Speaker 6: How do they get you what earplugs? I know, selling
Speaker 6: the ear plugs at the because it's so loud.
Speaker 2: It sounds like someone who's been there.
Speaker 3: Yeah, didn't bring air plugs, but we bought some. Also
Speaker 3: some of the world's finest hotels and the only five
Speaker 3: star crews. We talked to the woman behind standards and
Speaker 3: ratings for the Forbes Travel Guide first up.
Speaker 2: This hour.
Speaker 3: Bad Bunny super Bowl halftime performance not only turned heads
Speaker 3: for the music, dancing in costumes, but also for pushing
Speaker 3: people to learn Spanish. We got up with Julie Hansen,
Speaker 3: chief revenue Officer in US CEO of Babbel, on the
Speaker 3: surge her company saw after the halftime show.
Speaker 8: Normally we have about sixty two percent of our daily
Speaker 8: sign ups are people learning Spanish. During the Super Bowl
Speaker 8: almost eighty five percent during that halftime show. Overall sign
Speaker 8: ups were up just about four x, downloads up three x.
Speaker 8: Gotch and you know it actually is state sustaining. Excuse me,
Speaker 8: so like Spanish remains by far, the is over it,
Speaker 8: like seventy eight percent sign ups still, so it's really
Speaker 8: having a phenomenal effect.
Speaker 9: Maybe online we knew it would be big. We had
Speaker 9: no idea it'd be like this.
Speaker 3: In the past, have have big cultural events sparked sign
Speaker 3: ups such as this or is this unprecedented in the
Speaker 3: history of.
Speaker 8: Babel, Yes, but nothing quite like this, especially in the US,
Speaker 8: you know, just so instantaneous and so significant.
Speaker 6: What's the staying power though?
Speaker 3: I mean, we all know what it's like to have
Speaker 3: New Year's resolutions and say I'm going to do this,
Speaker 3: I'm going to learn this new language, and then you
Speaker 3: kind of fall off a cliff after a few weeks.
Speaker 9: For sure we will see the thing.
Speaker 8: I like our odds though, because two factors together here.
Speaker 9: One, just the growth of Spanish language.
Speaker 8: In music and culture is really sustained and also again significant,
Speaker 8: so that's kind of creating this ongoing interest in the topic.
Speaker 9: And Two the early year.
Speaker 8: Cohort I mean January in particular, but we're almost in January.
Speaker 9: That is by far the strongest cohort.
Speaker 8: There is something about that beginning of the year New
Speaker 8: Year's resolution knew you this is the best most engaged
Speaker 8: group of users that we sign up all year, like
Speaker 8: twenty percent more.
Speaker 9: Engagement than in other months. So if they can.
Speaker 8: Keep that February intensity, the January intensity and the February
Speaker 8: you know interest from bad Bunny.
Speaker 9: It's a pretty good combination.
Speaker 2: Yeah, how do you engauge? Like, is there a way
Speaker 2: when somebody signs up how or is it just we'll
Speaker 2: see how long they stick with it?
Speaker 9: We I mean, the proof is in that pudding for sure.
Speaker 8: But we do see when they sign up, I mean
Speaker 8: when people tell us what their motivation is, and that
Speaker 8: also they'll tell us how much they think they're willing
Speaker 8: to how much time they're willing to invest. And that's
Speaker 8: an important topic to us because we're, you know, the
Speaker 8: point of Babel is we want to actually teach the language,
Speaker 8: so we really try to respect people's time and we
Speaker 8: want the time with Babbel to be time well spent,
Speaker 8: so we pay attention to that particular metric. But interestingly,
Speaker 8: in January we saw that travel as was the number
Speaker 8: one motivation by far. Forty three percent of our January
Speaker 8: sign up cited travel Is there a reason?
Speaker 9: And that's up like seventeen percent year over year.
Speaker 2: Oh, what language is in particular.
Speaker 8: Spanish and English and you know following that is French, Italian, German.
Speaker 9: We teach fourteen languages, but those are your top five,
Speaker 9: top four?
Speaker 2: You know, it's yeah, it's kind of fascinating. Does it
Speaker 2: also just say to you that more consumers are travel
Speaker 2: like I'm just crying. You know, we're always trying to
Speaker 2: figure out what cannsumers are up to in an economy
Speaker 2: where not everybody benefits equally. Is there a read for
Speaker 2: you on the US consumer based on you know that
Speaker 2: they want to learn more languages because they're traveling more
Speaker 2: or I'm just curious, what are you seeing?
Speaker 9: Are we just cold and we want to go somewhere war? Okay,
Speaker 9: give it this winter.
Speaker 8: On the US side, we still see the travel is
Speaker 8: a strong motivator, but actually for the US side it
Speaker 8: can be even the stronger motivator to connect with friends
Speaker 8: and family. And again, as Spanish grows in the country,
Speaker 8: that becomes even a more important impact. But it is
Speaker 8: interesting to see the worldwide surge and travel interest that
Speaker 8: we're seeing in our data. I'm not sure I knew
Speaker 8: that was coming, because travel has been on the upswing
Speaker 8: for several years now.
Speaker 3: Yeah, well you said you didn't necessarily know if that
Speaker 3: was coming. A lot of investors seemed like they didn't
Speaker 3: know that the Ai Revolution was coming as quickly as
Speaker 3: it has. T Mobile launched real time AI services on
Speaker 3: its wireless nowork, including live translation during phone calls for
Speaker 3: over fifty languages. Are we entering a world where technology
Speaker 3: will allow us to just speak our own languages and
Speaker 3: we will not need to learn other languages? I know
Speaker 3: that's a crazy thing for me to ask, but like,
Speaker 3: this is the world we live in.
Speaker 9: Well, we agree that, I mean, AI translation is real.
Speaker 8: It's powerful, it's very useful, but it only solves kind
Speaker 8: of immediate communication needs. And by the way, it does
Speaker 8: so with a lag, which is not the most fluid
Speaker 8: way to connect to someone or converse. So we think
Speaker 8: that an LM can translate any conversation, but it can't
Speaker 8: give you the joy of understanding a joke in another
Speaker 8: language or the feeling of truly belonging in another culture.
Speaker 8: Translation solves the moment learning transforms the person. So we
Speaker 8: think that, you know, learning a language is here to
Speaker 8: stay as long as people have languages.
Speaker 3: That was Julie Hansen, revenue officer and us CEO of Babbel.
Speaker 3: Languages are just one aspect of the online learning ecosystem.
Speaker 3: There's also the software used by colleges and hubs for
Speaker 3: testing practical and professional educational preparedness.
Speaker 2: Two of those platforms, Coursera and You to Me, announced
Speaker 2: plans for an all stock merger at the end of
Speaker 2: twenty twenty five. Now they're working on integrating the two
Speaker 2: companies together. We got up with Greg Hart, president and
Speaker 2: CEO of Coursera in San Francisco.
Speaker 3: Greg, I want to start with the merger. Carol mentioned
Speaker 3: it in December, an all stock merger between Coursera and
Speaker 3: you to Me. What is the status of that right now?
Speaker 3: We understand it's going to close in the second part
Speaker 3: of the year. The integration, how does it go, What
Speaker 3: does it mean in terms of the customer and user experience?
Speaker 3: And who's the boss?
Speaker 6: Thank you Tim for the question.
Speaker 11: So we are going through the regulatory approval process right now.
Speaker 11: Nothing to share on that front, but we're moving through
Speaker 11: the paces and then we'll hope to move through that
Speaker 11: and then go through shareholder approval. In terms of who's
Speaker 11: the boss, first of all, the customer is always the boss.
Speaker 11: In terms of the actual governance of the company, I
Speaker 11: will be the CEO of the combined company, and we
Speaker 11: are excited about that combination because of the opportunity to
Speaker 11: bring together two businesses that are really quite complementary. You
Speaker 11: to me, the companies are roughly the same size in revenue,
Speaker 11: So the combined revenue of the companies would be about
Speaker 11: one point five billion dollars for twenty twenty five with
Speaker 11: about ten percent adjusted ebitdam margin's free synergies. We also
Speaker 11: announced at signing that we would deliver one hundred and
Speaker 11: fifteen million dollars of Synergy's post clothes within the first
Speaker 11: two years, and so a nice improvement in the operating
Speaker 11: margin that we have as a combined company. We are
Speaker 11: focused as we go through the planning process on exactly
Speaker 11: what that integrated company and platform will look like. So
Speaker 11: how do we think about pricing and packaging and promotions,
Speaker 11: of course, how do we think about the leadership team,
Speaker 11: and then how do we bring the companies together to
Speaker 11: really drive not only you know, better margins through the synergies,
Speaker 11: but also really over time, drive much higher revenue growth
Speaker 11: and do a better job of addressing the massive market
Speaker 11: opportunity in front of the companies.
Speaker 3: Greg there there have been many examples of mergers that
Speaker 3: have been announced that haven't actually gone through. For a
Speaker 3: whole multitude of reasons, some of them a regulatory some
Speaker 3: of them have involved other factors. What happens if this
Speaker 3: doesn't go through.
Speaker 11: Well, I'm very confident that it will. I mean, we
Speaker 11: operate in the education space, which is a massive space,
Speaker 11: you know, two trillion plus dollars that encompasses physical education
Speaker 11: so day through twelve universities, vocational schools. It encompasses the
Speaker 11: online sector that we happen to be a part of,
Speaker 11: and you to me also is a part of. And
Speaker 11: then of course it encompasses all the other ways that
Speaker 11: people learn today and increasingly that is through things like
Speaker 11: LLLM or YouTube or TikTok. We believe we have a
Speaker 11: very differentiated offering, but we are a very very small
Speaker 11: player within that massive space, and we believe that the
Speaker 11: combination actually delivers more value to every one of our constituents,
Speaker 11: to our learners. They'll get access to more content, not
Speaker 11: only the three hundred and seventy five different university and
Speaker 11: industry partners that CORSA has, but the eighty five thousand
Speaker 11: plus subject matter experts that you to Mese content creator
Speaker 11: community has, and so it'll bring more choice, more learning opportunity,
Speaker 11: it'll be better for our content creators because they'll have
Speaker 11: access to a worldwide learner audience that's approaching three hundred
Speaker 11: million registered learners across the two companies. And it's better
Speaker 11: for our enterprise customers because we're able to deliver them
Speaker 11: the breadth of that content coming from that content creator
Speaker 11: network across you to me and Coursera.
Speaker 2: Hey, listen. One of the things, Well, first of all,
Speaker 2: I have to just follow up on the all the
Speaker 2: combination with you and you to me. Is it still
Speaker 2: though you said you're pretty confident about regulatory greg so
Speaker 2: maybe still on track to close this deal in the
Speaker 2: second part of twenty twenty six.
Speaker 11: Yes, we've heard nothing that would you change our belief
Speaker 11: that it will close, you know, by the second half
Speaker 11: of twenty twenty six, and then remain confident in getting
Speaker 11: all the regulatory approvals we need to do.
Speaker 2: So. One of the things I thought, that's interesting. I
Speaker 2: always think about your business. You mentioned university industry partners
Speaker 2: You've got these subject experts. How are people most using it?
Speaker 2: Is it your corporate partnerships where people want retraining for
Speaker 2: their employees. Is it people on their own? Is it
Speaker 2: people who are just interested in about different topics like
Speaker 2: tell us where the growth is Is it all of
Speaker 2: it or certain parts of it?
Speaker 11: Fantastic question, Kurl. So our business is, of course, Sarah,
Speaker 11: an independent company. We are two thirds consumer, one third
Speaker 11: enterprise from a revenue perspective. You to me is the inverse,
Speaker 11: they are two thirds enterprise one third consumer. For both companies,
Speaker 11: there is a huge focus on and growth in technology
Speaker 11: and specifically AI right now, and so for Coursera, last
Speaker 11: year we saw enrollments in gen AI related content at
Speaker 11: a rate of fifteen enrollments per minute. In twenty twenty
Speaker 11: four that was only eight enrollments per minute, and so
Speaker 11: a real burgeoning interest that I believe will continue in
Speaker 11: twenty twenty six as well. And we are really focused
Speaker 11: on delivering not just learning, but delivering skills so that
Speaker 11: people can't advance their careers. Eighty six percent of the
Speaker 11: learners who come to Coursera come here to advance their careers,
Speaker 11: and so we're very focused on delivering them skills that
Speaker 11: they can use to advance their careers and that they
Speaker 11: can demonstrate real mastery of as they are in the workforce.
Speaker 2: Hey, Greg, really quickly thirty seconds.
Speaker 3: That was Greg Hart, President and CEO.
Speaker 2: Of course, Sarah, you're listening to Bloomberg Business Week. Coming up,
Speaker 2: we hear from the CEO of the company behind some
Speaker 2: of the biggest live events in the world, in fact,
Speaker 2: behind the greatest show honor.
Speaker 3: I think Ringling Brothers and Barnum and Bailey, Monster Jam
Speaker 3: and Disney on Ice.
Speaker 1: This is Bluebird. This is Bloomberg Business Week Daily with
Speaker 1: Carol Masser and Tim Stenovek on Bloomberg Radio.
Speaker 2: A new year and we continue to track how consumers
Speaker 2: are doing amid economic data that points to some stress
Speaker 2: for individuals when it comes to buying things or spending
Speaker 2: on experiences.
Speaker 3: That's where one guest from this past week comes in.
Speaker 3: Live events is her company's focus. It's behind Ringling Brothers
Speaker 3: and Barnum and Bailey, Monster Jam, Disney on Ice, Monster Energy,
Speaker 3: AMA Supercross, and the Super Motocross World Championship.
Speaker 2: Sounds like a lot of fun. Hey, we're talking about
Speaker 2: all the stuff that Feld Entertainment does. It is family
Speaker 2: owned and operated, and we got up with Juliette Feld Grossman.
Speaker 2: She is CEO.
Speaker 6: Let's talk experiences. Carol. You know, I think that I
Speaker 6: think that we're the greatest show on.
Speaker 2: Well we are, but there's another one.
Speaker 3: There's another one we could share this space. Live Events
Speaker 3: is our next guest's focus. Her company is behind Ringling
Speaker 3: Brothers and Varnum and Bailey, Monster, Jam, Disney on Ice,
Speaker 3: Monster Energy, Ama Supercross, and so much more. We're talking
Speaker 3: about Feld Entertainment. It's family owned and operated, and Juliette
Speaker 3: Feldg Grossman is with us. She's CEO of Feld Entertainment.
Speaker 3: She joins us here in the Bloomberg Interactive Brokers studio.
Speaker 6: Welcome, how are you great?
Speaker 2: Thanks for having me on today.
Speaker 3: So you're actually in New York for a reason because
Speaker 3: of a big opening at the Barclays Center. The scale
Speaker 3: of what goes into your productions is just mind blowing,
Speaker 3: I think for a lot of people. We're going to
Speaker 3: talk about some of those, but first we want to
Speaker 3: talk to you about the economy and what you see
Speaker 3: because a lot of the experiences are discretionary spending, and
Speaker 3: you know, this is what we talked to you about
Speaker 3: last time, and the way that consumers are being more
Speaker 3: choosy with what they're spending money on. What are you
Speaker 3: seeing across your portfolio right now?
Speaker 7: It's very interesting. We tend to be a bellweather on
Speaker 7: the economy, as you said, because consumer spending on entertainment
Speaker 7: is completely discretionary, and as we looked at the end
Speaker 7: of last year, there was a lot there was reduced
Speaker 7: spending on entertainment across the economy. We could see it
Speaker 7: in other you know, credit card data that we review,
Speaker 7: and we saw it as well reflect in our business.
Speaker 7: And what we do is, you know, we try to
Speaker 7: drive that urgency is we're in a different market every
Speaker 7: single week. We also introduced a number of seasonal offerings,
Speaker 7: so we have a holiday pre show with Disney on
Speaker 7: ice that adds that value for the consumer. But then
Speaker 7: as we came into this year and we came out
Speaker 7: of the you know, holiday spending period where people are
Speaker 7: buying gifts and they have other travel going on and
Speaker 7: things that they've got to spend on. We're seeing, you know,
Speaker 7: as it's cold in a lot of markets across the US,
Speaker 7: that people want to get out, they want to do
Speaker 7: stuff with their families, and they're coming to see us.
Speaker 7: And so business has been very strong this year and
Speaker 7: we're excited to be in that place, so up.
Speaker 2: Over last year. Yes, Wow, that's interesting. Okay, so tells
Speaker 2: you like, what's the average spend give us an idea
Speaker 2: of when you know, we often talk about going to
Speaker 2: a baseball game or a football game or a concert,
Speaker 2: like it's so expensive, but just give us an idea
Speaker 2: family of four they go out.
Speaker 7: So for our events across the board, and there's a
Speaker 7: wide spectrum of what you can spend on one of
Speaker 7: our experiences with vip up sales and with merchandise, so
Speaker 7: there's all together things. But on average, our experiences are
Speaker 7: about forty dollars per person and for a family forcoming
Speaker 7: you know, you can you can calculate what that is.
Speaker 7: One of the big changes that we've seen in the
Speaker 7: past years. There was regulation that went into place last
Speaker 7: summer around all in pricing, and that didn't only affect ticketing,
Speaker 7: it also affected rental cars and hotels as well. And
Speaker 7: so for the consumer it's it's a very good thing.
Speaker 7: It's a positive thing that they're seeing the whole price
Speaker 7: up front, but they're not used to that, and so
Speaker 7: they are adapting to understanding that what they're seeing on
Speaker 7: the first page of their ticket purchase process is actually
Speaker 7: the price that they'll be seeing at the end with taxes.
Speaker 3: So what about when once they get to that event,
Speaker 3: and the money that they spend at these events. I
Speaker 3: was looking at Carol shared with me a picture of
Speaker 3: her daughter at the circus many years ago and she
Speaker 3: was holding this stuffed animal and I was like, I
Speaker 3: bet you bought that stuffed animal at the circus.
Speaker 12: We did.
Speaker 2: They hare.
Speaker 3: So the spending that happens at these events, that can
Speaker 3: sometimes you know, when you add in food, when you
Speaker 3: add in souvenirs, that can sometimes exceed the ticket price.
Speaker 2: Well, we have a.
Speaker 7: Wide range of offerings and products, and one thing you
Speaker 7: should also know is that all of our consumer products
Speaker 7: that we sell, whether it's a Disney Nice Monster jam
Speaker 7: or wringling, are actually custom design and exclusive to our experience,
Speaker 7: and we oversee the manufacturing of those and we also
Speaker 7: have a product guarantee on them, which many people don't
Speaker 7: know in a twenty four to seven customer service hotline,
Speaker 7: So we really stand behind the products that we put
Speaker 7: out there and we feel their you know, high value,
Speaker 7: even though you know the expectation often coming to event
Speaker 7: is different.
Speaker 6: Where those products made.
Speaker 7: Many of them are made in China. We also have
Speaker 7: some products made in India, Vietnam and in the.
Speaker 6: Us, So you must have been hit pretty hard with tariffs.
Speaker 7: Yes, it has been significant to us in our direct
Speaker 7: purchasing on consumer products and also in show equipment. And
Speaker 7: then we see it through the consumer spending where they're
Speaker 7: getting hit in their own you know, overall spending.
Speaker 3: So on this on the part that you sell to consumers,
Speaker 3: how much of the tariffs did you absorb versus raising prices.
Speaker 7: We One of the things that we really looked at
Speaker 7: was our product assortment. So the tariffs were not applied
Speaker 7: like uniformly across all products coming in, so there were
Speaker 7: certain categories that already had a base tariff that was
Speaker 7: higher or lower. So we looked at the mix of
Speaker 7: our assortment to try to optimize for items that had
Speaker 7: a lower overall tariff impact. Because we couldn't pass the
Speaker 7: whole impact onto the consumer, it just didn't make sense
Speaker 7: in terms of their you know, price sensitivity.
Speaker 2: Tell us about like your world and putting together these shows,
Speaker 2: whether it's the Circus, whether it's Monster Jam. You guys
Speaker 2: were talking. I think about the trucks before we got in.
Speaker 2: I've got a little grand nephew who is totally into them.
Speaker 2: But what like the logistics of putting this stuff on.
Speaker 2: But there's labor, there's lots of people involved. There's just
Speaker 2: a lot of things. So just give us an idea.
Speaker 2: I mean these like these monsters trucks, Like what is
Speaker 2: even Like I'm always curious, like what it takes to
Speaker 2: build one of these? How long? What it costs?
Speaker 6: Like I don't know, Ken Carrol drive.
Speaker 2: One can I But just tell us little bit more
Speaker 2: like about your world and what goes on?
Speaker 7: Sure will Monster Chain. There are three things that really
Speaker 7: make a great Monster Jam experience and event, and that's
Speaker 7: the trucks, the tracks, and the drivers. So it's all
Speaker 7: three elements that have to work together to make it
Speaker 7: exciting for the for the guests, and so we look
Speaker 7: at innovating and developing each of those all together. So
Speaker 7: we've developed a training program for drivers called Monster Jam University,
Speaker 7: and that's allowed us to bring in more women into
Speaker 7: it because we have women and men competing against each
Speaker 7: other in the same vehicle, same competition, with an equal
Speaker 7: shot to win. And then we also build all of
Speaker 7: our own trucks, so we have the world's largest race
Speaker 7: shop at our studios in Florida, and so we manage
Speaker 7: nearly one hundred trucks there, and we're building the chassis ourselves,
Speaker 7: welding them together, we're building engines, we're building all of
Speaker 7: you know, most of the other components. I think they're
Speaker 7: only about thirty five percent of the components and the
Speaker 7: trucks that you could buy off the shelf because there's
Speaker 7: on such a massive scale and what we're doing is acrobatics,
Speaker 7: and so we're also always refining the track design to
Speaker 7: create great exciting obstacles to keep pushing the limits.
Speaker 3: Twelve thousand pound trucks, yeah, well some of the I mean, look,
Speaker 3: it's Gravedigger is one of the trucks, Black Pearl acts
Speaker 3: Avenger backwards.
Speaker 6: Bob, how much does a truck costs?
Speaker 7: To be honest, I couldn't tell you.
Speaker 6: I mean that's what we don't It's thousand dollars truck.
Speaker 7: Oh yes, yeah, and you don't want to own one
Speaker 7: because wait till you see what the damage costs.
Speaker 12: Aver.
Speaker 7: We have audacious damage because some one of the things
Speaker 7: that our fans love about Monster Jam is that we'll
Speaker 7: go out there and destroy it. And just to give
Speaker 7: you an example, it has to be spectacular destruction.
Speaker 2: But a grave digger side a.
Speaker 7: Grave Digger is still hand painted. It takes forty hours
Speaker 7: to paint Gravedigger Wow. And so we have a painter
Speaker 7: dedicated to painting bodies for Grave Digger. And then every
Speaker 7: weekend we go out and we shred it and you
Speaker 7: do it all again, and we do it all again.
Speaker 3: Do those does the maintenance team travel with the whole crew,
Speaker 3: And because you have to kind of have a mobile
Speaker 3: shop too, because you're going from city to.
Speaker 7: City exactly, So we have in our haulers that are
Speaker 7: specially designed and we build those out at our facility
Speaker 7: as well. We have a mobile repair shop, so we
Speaker 7: have two trucks traveling in a hauler on transport tires,
Speaker 7: and then we have extra equipment and parts along there.
Speaker 7: And then we also have some depots around the US
Speaker 7: in different areas where we travel, so during the week
Speaker 7: between events, we can go there and we can do
Speaker 7: more heavy repairs. But you know our team, and we
Speaker 7: call it the Thrash because let's say one of our trucks,
Speaker 7: Sparkle Smash, goes out during racing and blows the transmission.
Speaker 7: We'll take Sparkle Smash into the back during the event
Speaker 7: and we will repair that and we will replace that
Speaker 7: to the best of our ability and change the order
Speaker 7: then for the second part of the event so we
Speaker 7: can get out there again and deliver for fans.
Speaker 2: Oh my god, is it that event the most difficult
Speaker 2: to keep? Like I'm just I don't know. I mean,
Speaker 2: there's the supermotocross, Like, there's just all these different things
Speaker 2: are they all have individual challenges.
Speaker 7: Everything we do is complicated, but that's what makes it
Speaker 7: exciting and unique, and that's where the value is for
Speaker 7: our consumer that we do something you can't get anywhere else.
Speaker 3: The revenue, if you look at top line revenue, you
Speaker 3: of course have ticket sales, you also have what you
Speaker 3: sell there, but sponsorships too a big part of revenue.
Speaker 7: We have sponsorships.
Speaker 2: We also have activation.
Speaker 7: Program where we bring we support certain of our partners
Speaker 7: with retail programs that go to Walmarts and Target stores.
Speaker 7: And then we also have we also have a very
Speaker 7: big licensing business and we have media rights business across
Speaker 7: our sports properties.
Speaker 6: What are you looking at it?
Speaker 2: You can audition to perform in the circus.
Speaker 3: Let me tell you something. Are you talking about circuits
Speaker 3: or Monster Jam? Because I think the ship sailed for
Speaker 3: me for both of those.
Speaker 5: I think, but are you good at ice skating?
Speaker 6: I don't know.
Speaker 3: Actually we just had that conversation rollerblading, you know, Okay,
Speaker 3: that could have been something.
Speaker 2: But labor is that a tough one too, though, like
Speaker 2: finding all the people to either fix the monster jam,
Speaker 2: you know, cars, or finding people? Is that easy or
Speaker 2: is that crazy? And we just got about thirty seconds.
Speaker 7: It's never easy to find great people. But it's something
Speaker 7: that is important to us. And because of that, we
Speaker 7: have a long chevity, a lot of longevity across people
Speaker 7: who stay with you for a long company, and we're
Speaker 7: really proud of that.
Speaker 2: Don't you think he could be like D like, I'm interested.
Speaker 2: I know I need to.
Speaker 6: Start with a ride in one of the trucks that yeah,
Speaker 6: I don't know. Have you driven one?
Speaker 9: No?
Speaker 7: I leave it to the pros. Okay, you don't want
Speaker 7: to see me try.
Speaker 6: You're the boss. You could do that, you're the boss.
Speaker 7: Not well, not well, I know what I can do.
Speaker 6: Well, that's Juliette Feldt Grossman, CEO of feld Entertainment.
Speaker 9: Still to come.
Speaker 2: I'm on Bloomberg Business Week. I look inside the world's
Speaker 2: first and only five star cruise.
Speaker 3: We've got more on the camp Miss vacations featured in
Speaker 3: this year's edition at the Forbes Travel Guide twenty twenty
Speaker 3: six Star Awards.
Speaker 2: This is Bloombrock.
Speaker 5: This is Bloomberg Business Week Daily with Carol Masser and
Speaker 5: Tim Stenovek on Bloomberg Radio.
Speaker 3: Carol, if you missed out on the McDonald's chicken nuggets
Speaker 3: with caviar, there's always next year's US Open.
Speaker 6: You weren't there this year?
Speaker 2: No, what did they do?
Speaker 6: One hundred dollar cocaduc cocaduck.
Speaker 3: Chicken caviar nugget on coca Yeah, caviar twenty four carrot
Speaker 3: Gold edition nuggets. You could have gotten too.
Speaker 6: Jesus, Yeah, it's the US Open.
Speaker 2: It is the US Open.
Speaker 3: Just saying, hey, speaking of luxury, Yes, that's exactly where
Speaker 3: we're going right now. The Amandarin Oriental Lago Di Como
Speaker 3: nu Juma, a Ritz Carlton Reserve in Saudi Arabia. Alas
Speaker 3: Bucket a restaurant in Atlanta, the world's first and only
Speaker 3: five star Crews. Just a handful of some of the hotels, restaurants,
Speaker 3: spas and experiences that are featured in this year's edition
Speaker 3: of the Forbes Travel Guide twenty twenty six Star Awards.
Speaker 2: Sign me Up, Sign me Up. Amanda Fraser is President
Speaker 2: of Standards and Ratings at the Forbes Travel Guide. She
Speaker 2: joins us from Atlanta on this Wednesday. Great to have
Speaker 2: you here with us. Tell us little bit more about
Speaker 2: the Forbes Travel Guide. I think there's a lot of
Speaker 2: guides out there, and I think we're all like, well, wait,
Speaker 2: how do we distinguish? So tell us about who you
Speaker 2: guys are and how you rate various areas of the
Speaker 2: hospitality industry.
Speaker 12: We're in our sixty eighth year of doing this, and
Speaker 12: you know, I think the question I get the most
Speaker 12: is why do racings master? And you know, who are
Speaker 12: you going to trust? Is what we say at the
Speaker 12: end of the day. I think there's a continued online
Speaker 12: peripheric proliferation of a confusing travel advice out there, So
Speaker 12: our guide aims to cut through that clutter, and with
Speaker 12: our sixty eighth list launch today, there are more choices
Speaker 12: than ever before, just over twenty four hundred actually, So.
Speaker 3: We were looking into how you become one of the
Speaker 3: inspectors to travel around the world.
Speaker 2: Because it's just what we want to do our next career.
Speaker 3: It doesn't sound like a bad gig like traveling to
Speaker 3: remote places and staying at luxury resorts and being undercover.
Speaker 3: People often have questions about lists like this and how
Speaker 3: they come about. Are the hotels and resorts paying to
Speaker 3: be in them? But no, you guys are paying to
Speaker 3: actually rate them. How does that work?
Speaker 12: You know, thank you for asking that question. And it
Speaker 12: is an oral cavir and you know, lying on fluffy
Speaker 12: beds all the time. For sure. We pride ourselves in
Speaker 12: the integrity that we put into our system. So no,
Speaker 12: it is you cannot pay to get your rating. We
Speaker 12: visit every property that's on the list, and at the
Speaker 12: end of the day, it's about integrity, an ethical way
Speaker 12: of making sure that we're surfacing the best place is
Speaker 12: to stay because you know, we're talking about prices these
Speaker 12: days in hotels. You're looking at things on our list
Speaker 12: one thousand dollars and upwards to night. So the experience
Speaker 12: has got to be exceptional and that's what we're there
Speaker 12: to find out.
Speaker 2: I am also curious, Amanda. I mean, when you hit luxury,
Speaker 2: there's like just certain standards that are given right, So
Speaker 2: how do you you know when you're dealing with properties
Speaker 2: that are kind of the cream of the crop. What
Speaker 2: is it that then you're ranking them on arm because
Speaker 2: at that point they're at a certain level to begin.
Speaker 12: With, exactly. And you know, I think at the end
Speaker 12: of the day, you can build a beautiful hotel. There's
Speaker 12: a lot of investment out there right now and some
Speaker 12: fabulous product, But what we are known for and what
Speaker 12: we stand by is the service. So seventy percent of
Speaker 12: our algorithm that makes up these awards is based on service.
Speaker 12: And when we dive even deeper into that, the big
Speaker 12: thing that everyone's talking about right now is authenticity, and
Speaker 12: we know that that's important because people want to feel
Speaker 12: closer to brand, They want to understand the brand and
Speaker 12: identify with it. So the hotels that do that particularly well,
Speaker 12: that define their brand standards and that deliver that authenticity,
Speaker 12: they rise to the top in our system.
Speaker 3: Should we talk Yeah, I want to talk about about
Speaker 3: five star crews because that I think is one of
Speaker 3: the interesting takeaways for this year because it's the world's
Speaker 3: first and only five star crews. What can you tell
Speaker 3: us about what to expect on a ship such as this,
Speaker 3: an experience such as this.
Speaker 12: I mean, my goodness, it is historical, not only for us,
Speaker 12: but for the cruising industry to have Ilma, the Ritz
Speaker 12: Carton York Collections first five star crews. It's the first
Speaker 12: hotel brand to take cruising into you know, mainstream on
Speaker 12: our list, and you know, it really is fantastic because
Speaker 12: they can deliver at such a high level and because
Speaker 12: of their ability to have a good, strong staff to
Speaker 12: passenger ratio and really they're delivering on that that we're seeing,
Speaker 12: which is about flow travel and multi generational travel, which
Speaker 12: just makes it so much easier for people to have
Speaker 12: a vacation where they really don't have to think. And
Speaker 12: we talk about frictionless travel all the time, and that's
Speaker 12: what we mean because.
Speaker 3: But it's such a big it looks like a big ship,
Speaker 3: and you know, typically you would associate an experience with
Speaker 3: a smaller ship that seems more personal, you know, a
Speaker 3: smaller experience.
Speaker 6: How do they pull that off?
Speaker 9: I mean, the Young.
Speaker 12: Collection is a smaller ship, and you know there's other
Speaker 12: brands like Comman and orient Express coming out with smaller
Speaker 12: product this year. At the end of the day, it's
Speaker 12: really about the service and that's what matters, and that's
Speaker 12: what counts. And you know, this is a brand that's
Speaker 12: delivering at time and time again. Same with La Voyage,
Speaker 12: the restaurant, the Daniel Blue Restaurant on the celebrity ships,
Speaker 12: you know, being the first five star restaurant at see.
Speaker 12: These are incredible brands and incredible individuals delivering.
Speaker 2: I love Danielle Allude the person and his restaurants to
Speaker 2: be to be quite fair, Where do you want to
Speaker 2: go now?
Speaker 12: No, I think where we want to go next is
Speaker 12: there's a lot of unspoken destinations that don't necessarily get
Speaker 12: the coverage sometimes that New York, Chicago, La London, Paris gets.
Speaker 12: So you know, we're looking at River Parrison because that
Speaker 12: is a really hot trend right now. And then also
Speaker 12: destinations like Charleston, South Carolina are making it big on
Speaker 12: our list this year as well.
Speaker 2: Yeah, it's not just the reality show. I have a
Speaker 2: bunch of family that I've moved down there to do
Speaker 2: like semi retirement, and it's just everybody's moving down there.
Speaker 2: It's kind of a charming Port City weather, it's nice,
Speaker 2: uh and all that good stuff. I want to go
Speaker 2: back to the list here because I like there's a
Speaker 2: section smaller delivers big and I have to say when
Speaker 2: I go on vacation. I love people, but I like
Speaker 2: to get away from them. So I like to go
Speaker 2: where it's why.
Speaker 6: Do you spend your working day with me?
Speaker 11: Ok? Travel with you?
Speaker 2: But I mean it's just like I I like where
Speaker 2: it isn't overcrowded. I like some space. I like to breathe.
Speaker 2: I like to be near an ocean. And that is
Speaker 2: something you know. I even used to go and stay
Speaker 2: in hotels and I wanted like these smaller luxury hotels.
Speaker 2: That was kind of a fun place to be. But
Speaker 2: that is certainly something that pops up among your highly
Speaker 2: rated list.
Speaker 12: You know, You're absolutely right, there is definitely a shift
Speaker 12: towards that more intimate build and with doing that actually
Speaker 12: quite heavily in Macau even this year. So just for example,
Speaker 12: there's a lot of hotels within hotels, the Pies a Ground,
Speaker 12: the Capella, which are within these big integrated resorts, and
Speaker 12: I think that's really a reflection of the desire to
Speaker 12: get closer to a brand.
Speaker 3: Yeah, so I want to go back to the business
Speaker 3: model here, because if you're paying to actually go to
Speaker 3: all of these resorts, have these experiences, you have a
Speaker 3: staff that does that. You then put this together that
Speaker 3: takes a lot of resources and the ratings are available
Speaker 3: for free to us. How do you make money? What's
Speaker 3: the business model?
Speaker 12: Yeah, that's a great question, thank you. So while we
Speaker 12: do pay for our own rating evaluation system, I think
Speaker 12: the one thing that's really important that the consumer looks
Speaker 12: for as well is transparency. So we do while we aren't.
Speaker 12: You know, we are a consumer advocacy group at the
Speaker 12: end of the day, but we're also advocate for the industry,
Speaker 12: and you know, when we are working with the industry,
Speaker 12: we're offering them transparency if they would like it, into
Speaker 12: the results and for them to understand how they can
Speaker 12: get better. You know. So when they're getting their rating
Speaker 12: every year, I mean ultimately they need to know are
Speaker 12: they achieving it at the very highest level are they
Speaker 12: perhaps in danger of losing because we go every year
Speaker 12: and it's about re earning and re establishing your brand
Speaker 12: every year.
Speaker 3: So essentially, what you're saying is you have this consumer
Speaker 3: facing business which which offers their results for free to
Speaker 3: us as consumers, but you have this enterprise side of
Speaker 3: the business where you give a more granular, detailed breakdown
Speaker 3: for each individual property and that's kind of pay to play.
Speaker 12: It is not pay to play, No, it is pay
Speaker 12: for transparency. So the racing is the racing is all
Speaker 12: and independently, and hotels still need to do that work.
Speaker 12: But at the end of the day, if they want
Speaker 12: to understand our system, our standards, how they did in
Speaker 12: our system, that's what the that's what the business model.
Speaker 2: Is, all right. Tell us about Newgima a Ritz Carlton Reserve.
Speaker 2: I mean, oh mg.
Speaker 6: Girl, if you have to ask, you can't afford.
Speaker 2: It, no, But just I mean we talk about getting
Speaker 2: away from people. That is certainly a place. The picture
Speaker 2: alone is just kind of off the charts.
Speaker 12: I mean, that's fabulous. The Red Sea, which I know
Speaker 12: has more fabulous news coming out, is one of those
Speaker 12: Giga projects that built from the ground up, and that
Speaker 12: team had a fabulous celebration this morning. They had a
Speaker 12: Forbes Travel Guide five star t shirts made up, and
Speaker 12: it's really just one of those futuristic results that we're
Speaker 12: just so excited to be able to feature out.
Speaker 3: Where do you want to go personally after being at
Speaker 3: the helm of this, what's the place like in terms
Speaker 3: of trends where we should really have.
Speaker 12: An eye on, you know, a place that we're looking
Speaker 12: at very closely. Is close to my heart where I'm from.
Speaker 12: The Cotswolds.
Speaker 6: Yeah, everybody's talking about the Cotswolds, talking.
Speaker 12: About the crops Falls. It's big in the news. We
Speaker 12: will be making our way there this year. Actually, I
Speaker 12: think we might have boots on the ground already, so
Speaker 12: look out for that on our twenty twenty seven.
Speaker 6: How do people become inspectors?
Speaker 12: Oh well, if you have to ask nice, nice.
Speaker 3: You get tapped for it. Right, it's like a secret society.
Speaker 12: It will a little bit. Yeah, they're definitely under cover.
Speaker 12: You can't find them online. That's that's the plan.
Speaker 2: Yeah, there's a cute little reality Oh shuting a little
Speaker 2: evasive with this part. I get to say, the Cotswold,
Speaker 2: you really, you really.
Speaker 6: Do keep that close close to the vest, right.
Speaker 12: Very close to the best, because you know what to
Speaker 12: be truthful. If an evaluator is found out, and it's
Speaker 12: always a great game, then we have to kind of
Speaker 12: pull them out and start again, because, as I said,
Speaker 12: it's integrity bass. We take that very very seriously.
Speaker 3: Yeah, I mean they're great stories of restaurant reviewers having
Speaker 3: elaborate disguises and you know, you always hear those stories
Speaker 3: historically about kitchens having pictures of these reviewers in them.
Speaker 3: But if somebody's found out at one place, they can't
Speaker 3: think you just end up going to another place and
Speaker 3: they're fine.
Speaker 12: You might be able to, but you know, the game
Speaker 12: is very, very real, and we have to take that
Speaker 12: very seriously and make sure that that profile isn't shut
Speaker 12: out or amongst you know, a chatter behind the scenes.
Speaker 2: One last question. It seems like we talk about it
Speaker 2: a lot, the ke shaped economy, a lot more wealth creation.
Speaker 2: It seems like there's more and more entries on the
Speaker 2: higher end hospitality space. Is that fair? Do you see
Speaker 2: more and more properties coming online to certainly feed into
Speaker 2: a wealthier public if you will that can really go
Speaker 2: out there and spend, because it just seems like a
Speaker 2: lot of wealth creation and then there's services and things
Speaker 2: to service them. So I'm just curious, are you seeing
Speaker 2: more properties come online?
Speaker 12: Yeah, I mean the pipeline is so strong, and I
Speaker 12: think you know, the great wealth transfer is feeding into that,
Speaker 12: and we also know that, you know, the younger generation
Speaker 12: are spending on travel like never before. So I think
Speaker 12: this is the beginning of a very strong decade for
Speaker 12: Travel and Luxury Travel.
Speaker 3: That was Amanda Frasier, President of Standards and Ratings at
Speaker 3: Forbes Travel Guide.
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