Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is Bloomberg Business Week Daily reporting from the magazine
Speaker 2: that helps global leaders stay ahead with insight on the people, companies,
Speaker 2: and trends shaping today's complex economy. Plus global business finance
Speaker 2: and tech news as it happens. The Bloomberg Business Weekdaily
Speaker 2: Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 1: Harveryone, Welcome to the Bloomberg Business Week Weekend Podcast. Earning
Speaker 1: season is underway, and the US that kicked off with
Speaker 1: the big banks this past week, also fedcher J. Powell
Speaker 1: signaled the US Central Bank is on track to deliver
Speaker 1: another quarter point interest rate cut later on this month.
Speaker 1: And then there's the US government shutdown now in its
Speaker 1: third week. You could read all about it at Bloomberg
Speaker 1: dot com and on the Bloomberg and you know about
Speaker 1: that government shutdown that meant another week without US economic
Speaker 1: days from the US government. And so we lean big
Speaker 1: time on voices from the c suite for clues on
Speaker 1: the macro environment. This hour, we'll hear from the CFO
Speaker 1: of Levi Strauss and the CEO of the industrial supplies
Speaker 1: company Fasten. All they've got great reads on the US
Speaker 1: economy and the c suite is really where we start
Speaker 1: this hour, with one CEO in particular, and one voice
Speaker 1: on Wall Street that we all pay attention to, JP
Speaker 1: Morgan Chase CEO Jamie Diamond. JP Morgan and the other
Speaker 1: big banks, as we mentioned, reported earnings this week and
Speaker 1: generally speaking, all appear to be in good health. Deal
Speaker 1: making is back, and trading profits are booming. And yet
Speaker 1: there were warnings from executives that have tempered the mood
Speaker 1: on consumers and some signs of sectors that are cooling.
Speaker 1: A warning too from Jamie Diamond, who used his bank's
Speaker 1: losses from auto lender Tricolor Holdings to say there's never
Speaker 1: just one problem or one cockroach. In his own words,
Speaker 1: equip some of his non bank rive have taken as
Speaker 1: a shot at them, you know, we.
Speaker 3: Think we're okay, and other stuff which my antenna goes
Speaker 3: up with leeds like that happened in I spy shouldn't
Speaker 3: say this, but when you see one cockroach, they're probably more,
Speaker 3: you know, and so we we should everyone should be
Speaker 3: four more than this one.
Speaker 1: That's JP Morgan's Jamie Diamond now Blue Owl Capital boss
Speaker 1: Mark Lipschaltz fired back. He came on Bloomberg. He said
Speaker 1: the issue was in loans that banks led, So Jamie
Speaker 1: Diamond should be scaring his own books if he wants
Speaker 1: to squash more bugs. Read more about the back and forth.
Speaker 1: It's on the Bloomberg and at Bloomberg dot com. Other
Speaker 1: companies kicking off earnings too this week, and it's kind
Speaker 1: of no surprise. AI artificial intelligence talk about that has
Speaker 1: been dominating earning's conversations for the past year, and that
Speaker 1: includes AI. In the real estate market. Prologists develops and
Speaker 1: manages logistical warehouses for the biggest companies out there, with
Speaker 1: more than one point three billion square feet in twenty countries.
Speaker 1: Prologists reported better than expected quarter earnings this past week,
Speaker 1: boosted its forecast, and discussed data center opportunities. Dan Letter
Speaker 1: is president and incoming CEO of Prologist. He takes over
Speaker 1: a CEO in January. He joined Bloomberg's David Gora.
Speaker 4: And me coming off this earnings call. This was certainly
Speaker 4: a topic for us. We had a tremendous quarter. As
Speaker 4: a matter of fact, we broke a record this quarter
Speaker 4: for leasing. We leased sixty two million square feet of
Speaker 4: space throughout our one point three billion square foot portfolio.
Speaker 4: And you think about that in context, sixty two million
Speaker 4: square feet is the equivalent of leasing Central Park in
Speaker 4: Manhattan twice over again in one quarter. So our team
Speaker 4: working tirelessly around the world least one million square feet
Speaker 4: a business day during the third quarter. And certainly these
Speaker 4: macro business trends are telling by our customers, who are
Speaker 4: the frontline of the economy.
Speaker 5: You look at the softer data and there is still
Speaker 5: some anxiety among a lot of business leaders about where
Speaker 5: things are headed. Maybe that's restricting them from making some
Speaker 5: of the capex expenditures that they would have otherwise. You're
Speaker 5: detailing for us very strong numbers, and I wonder what
Speaker 5: that says to you just about the capacity of these
Speaker 5: business leaders to look through or pass the uncertainty surrounding policy,
Speaker 5: including trade policy. Just give us a sense of the
Speaker 5: moment that we're in right now. Is as you understand
Speaker 5: it from talking to your customers about how they're feeling
Speaker 5: about the business climate going forward.
Speaker 4: Sure, it's a great question. One of the things we're
Speaker 4: most proud of at Prologists is our customer franchise. We
Speaker 4: have unique proprietary data, and we have unique relationships just
Speaker 4: given the size and scale these relationships, and after what
Speaker 4: has really been two to three years of uncertainty, going
Speaker 4: back to rate hikes two and a half years ago,
Speaker 4: we see our customers actually getting off their back foot.
Speaker 4: What we've seen over this last quarter is actually customers
Speaker 4: moving from caution to optimism.
Speaker 1: Huh wow. Why because things are getting settled in terms
Speaker 1: of trade tariff? Like, what is it that has calmed
Speaker 1: some of your customers.
Speaker 4: I think our customers realized, after a couple of sluggish
Speaker 4: years of not making many decisions, that they have to
Speaker 4: make long term decisions. And that's what they do when
Speaker 4: they do business with Prologis, and they have to look
Speaker 4: through the short term noise in order to ensure that
Speaker 4: they're positioned for growth going forward.
Speaker 1: So you're talking about Amazon Home Depot, FedEx Ups, Giga
Speaker 1: cloud Technology. I mean, these are some of your big customers.
Speaker 1: So you're talking about these guys are feeling more sure
Speaker 1: about the outlook than maybe they did over the last
Speaker 1: couple of years.
Speaker 4: Yeah, precisely. As a matter of fact, coming out of
Speaker 4: a cycle, we're really in just a classic real estate
Speaker 4: cycle right now, and what you're seeing typically at this
Speaker 4: point in the cycle is it's the big, well capitalized
Speaker 4: customers that lead the way out of this part of
Speaker 4: the cycle.
Speaker 5: This is a basic question you forgive me for. But
Speaker 5: when we talk about warehouses, what are we talking about.
Speaker 5: Are these just simply places to store stuff or are
Speaker 5: they places where there's a lot of movement, a lot
Speaker 5: of products coming in and out. When we talk about
Speaker 5: sort of the bread and butter of your business, what
Speaker 5: are you building? What are you leasing out?
Speaker 4: Yeah, thanks for that question. We own nearly six thousand buildings.
Speaker 4: These buildings are located in twenty countries in markets that
Speaker 4: represent about seventy eight percent of the world GDP. As
Speaker 4: a matter of fact, in twenty twenty four, we had
Speaker 4: the equivalent of nearly three percent of the world GDP
Speaker 4: go through these buildings. Our focus in building this portfolio,
Speaker 4: curating this portfolio over the last forty two years is
Speaker 4: having the highest quality, best located logistics, real estate close
Speaker 4: to consumers.
Speaker 1: So where are you geographically building out the most and
Speaker 1: you know, where are you looking to kind of increase
Speaker 1: your square footage or buy properties or by land.
Speaker 4: Well, the way we've set this organization up is our
Speaker 4: teams are calibrated to look for good deals around the world,
Speaker 4: and we're heavily focused, certainly this year on build the
Speaker 4: suits with our customers. We're actually going to we're on
Speaker 4: track for maybe our highest build to suit volume ever
Speaker 4: And what does that mean. That means we have a
Speaker 4: contract in place with these customers before we start building
Speaker 4: for them, and we're seeing that broad based across most
Speaker 4: of the sectors as well as geography spread throughout the world.
Speaker 5: I bet you can't do an interview without being asked
Speaker 5: about AI, So forgive me, We're going to do it,
Speaker 5: and I want to ask about it in two ways.
Speaker 5: The first is sort of how it's changing the way
Speaker 5: that you conduct your business, and then the second question
Speaker 5: is picking up on what Carol said, you looking at
Speaker 5: the demand for data centers maybe changing your business tach
Speaker 5: as well. Where do you see opportunity as this revolutionist
Speaker 5: it's called continues and there's the need for more space
Speaker 5: for processing all of this data.
Speaker 4: Yeah, it's AI is here, and it's big, and it's
Speaker 4: big at Prologious, certainly, we have all sorts of different
Speaker 4: operational and tools that we're building to make our teams
Speaker 4: more efficient and to be able to help them move faster.
Speaker 4: But when you think of AI and prologis, we announced
Speaker 4: today we now have five point two gigawatts of power
Speaker 4: either secured or in the advanced stages of being secured
Speaker 4: in sites mostly Tier one tier two sites in the
Speaker 4: United States, and then the tier one market's called flap
Speaker 4: D or the double M in.
Speaker 6: Europe.
Speaker 4: So Prologius is now We've long been in the higher
Speaker 4: and better use business, but again given that footprint we
Speaker 4: have close to these consumers. Well, the next wave in
Speaker 4: the modern economy is the digital economy, and AI and
Speaker 4: data centers are the logistics of that digital economy.
Speaker 1: We're talking with Dan Letter. He's president of Prologists. He
Speaker 1: is incoming president, incoming CEO excuse me, takes over that
Speaker 1: spot come January. Wait, Dan, so give you an idea
Speaker 1: just to have explain your business. How much is logistical
Speaker 1: warehousing right now? How much is data center? And where
Speaker 1: do you see the most growth going forward, especially on
Speaker 1: a day where Meta, Microsoft, black Rock, there's more all
Speaker 1: doing data center deals and it feels like a lot's
Speaker 1: happening in Texas to point that out as well. So
Speaker 1: give us an idea of your mix today and where
Speaker 1: the growth is happening.
Speaker 4: Well, I look at our growth in our base portfolio.
Speaker 4: We own our control fourteen thousand acres of land close
Speaker 4: to these consumption centers that I mentioned. We can build
Speaker 4: out another two hundred and forty million square feet out
Speaker 4: of that land bank. That's a tremendous amount of space.
Speaker 4: And when it comes to data centers, this power that
Speaker 4: we've secured, We've long been in the higher and better
Speaker 4: use business. Think about the fact that logistics and warehouses
Speaker 4: is typically the cheapest house on the block. We've always
Speaker 4: been in the business of optimizing that real estate value
Speaker 4: for our investors, and data centers are certainly a trend
Speaker 4: right now that we're able to capitalize on given the
Speaker 4: footprint and the raw material that we own and control.
Speaker 5: I sort of note a headline here acrossing the Bloomberg
Speaker 5: terminal to judge is blocked federal firings during the government
Speaker 5: shutdown for now. We're talking about that. A few moments ago,
Speaker 5: as we were talking about the Beige book from the
Speaker 5: Federal Reserve DAN and what that was telling us about
Speaker 5: the state of this economy. And one thing they're in
Speaker 5: is how difficult it is to find workers, particularly workers
Speaker 5: to do construction. And I think a theme to the
Speaker 5: AI story is amid all of this demand, it's hard
Speaker 5: to get folks to build the data centers that we
Speaker 5: need to buffet all of it. And I wonder if
Speaker 5: your company is dealing with that as well, just the
Speaker 5: difficulty of kind of keeping pace with how fast all
Speaker 5: this is moving.
Speaker 4: Yeah, thanks for that question. I think about that as
Speaker 4: we look at what is the replacement cost rent to
Speaker 4: build the next marginal building, whether it's logistics or data centers.
Speaker 4: And we look at that right now, and the cost
Speaker 4: the rent to build that next building is actually twenty
Speaker 4: five percent higher than market rents today. And then I
Speaker 4: look at that relative to our in place rents today,
Speaker 4: it's actually nearly forty five percent. And one of the
Speaker 4: key issues is the cost to build are getting that
Speaker 4: much more expensive and labor is certainly a factor there.
Speaker 1: Interesting. Hey, one thing just to follow on, going back
Speaker 1: to data center and your build out. You talked about
Speaker 1: also the acquisition of five point two gigawatts of power.
Speaker 1: It's a lot. How much though is in terms of
Speaker 1: the build out for data centers. You've got to track
Speaker 1: it with having access to power and does that slow
Speaker 1: some of the buildout just got about thirty seconds.
Speaker 4: You know, this five point two gigawatts that we're quoting
Speaker 4: is just a portion of the universe of opportunities we
Speaker 4: actually have given our size and scale with our six
Speaker 4: thousand buildings as fourteen thousand acres of land. We already
Speaker 4: own this land in these buildings at logistics bases, and
Speaker 4: so we brought an in house expertise. We have a
Speaker 4: very large energy business. We've got one gigawatt of power
Speaker 4: that will be generating off our rooftops by the end
Speaker 4: of twenty twenty five. So we've been building that energy
Speaker 4: capability that gives us just a better relationship with the
Speaker 4: power companies. Yeah, and so we're in great shape there.
Speaker 1: That was Dan Letter, president and incoming CEO of Prologists,
Speaker 1: along with Bloomberg's David Gore, who will join us a
Speaker 1: little bit later on as well. Still ahead on Bloomberg
Speaker 1: Business Week is the head to toe Denim lifestyle paying
Speaker 1: off in the age of tariffs. We hear from the
Speaker 1: CFO of the company that started it all, Levi Strauss.
Speaker 7: Consumer strength really strong. That's where we were able to
Speaker 7: raise the fully guidance and our product pipeline hasn't been
Speaker 7: stronger now if you go outside the US and international
Speaker 7: business was up in the high signal digit and so
Speaker 7: Asia had a strong quarder consumer strong. Europe had a
Speaker 7: decent quarda consumer in a better place than so is
Speaker 7: Latin America.
Speaker 1: You're listening to Bloomberg Business Week. This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Weekdaily podcast. Catch US
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch US live on YouTube well.
Speaker 1: Earlier this month, Levi Strauss raised its full year outlook,
Speaker 1: warned that tariffs are starting to bite as well. The
Speaker 1: company's gross margin improved due to higher prices and a
Speaker 1: larger volume of sales through more profitable channels. So is
Speaker 1: the head to toe denim lifestyle paying off. Levi Strauss,
Speaker 1: chief financial and Chief Growth Officer Harmit Singh expects accelerated growth,
Speaker 1: expanding margins, and consumer resilience to overcome tariff uncertainty. He
Speaker 1: joined me alongside Bloomberg senior equities reporter Bailly Lipshaltz.
Speaker 7: We had a real strong QUARTERA for consecutive quarters of
Speaker 7: high single digit growth and record gross margins, as well
Speaker 7: as the fact that we were able to raise up
Speaker 7: fully of guidance as well as gross margin and EPs expectations.
Speaker 8: Overall, as a.
Speaker 7: Company, we're a stronger and a higher performing company defined
Speaker 7: by accelerated growth, expanding margins, and higher return on invested capital.
Speaker 7: To your question about the consumer, the consumer is largely
Speaker 7: being resilient. You know, our products have really well segmented.
Speaker 7: You know, we have Blue Tap, which is our premium
Speaker 7: high pinnacle product and.
Speaker 8: That's doing well. We've introduced that in the US, so far,
Speaker 8: so good.
Speaker 7: We have a Redtap product that is basically marketed to
Speaker 7: consumers who earn between one hundred thousand and over and that's,
Speaker 7: you know, based on our results, really done well. And
Speaker 7: then we have you know, a signature product sold through
Speaker 7: Walmart that again had a banner coda and that's for
Speaker 7: you know, lower income consumers. So consumer strength really strong.
Speaker 7: That's where we're able to raise the fullier guidance, and
Speaker 7: our product pipeline hasn't been stronger. Now if you go
Speaker 7: outside the US and international business was up in the
Speaker 7: high signal digit and so Asia had a strong order
Speaker 7: consumer strong Europe had a decent quarder consumer in a
Speaker 7: better place than so is Latin America.
Speaker 1: Well, I'm just going to lay it out for you.
Speaker 1: I think I bought my first pair of Levi's in
Speaker 1: a long time, just a couple of months ago. My daughter,
Speaker 1: who's twenty two, so much younger than me, has been
Speaker 1: buying Levi's for a while. So, Bailey, I mean they're back.
Speaker 1: I go into the store in downtown in the village
Speaker 1: and yeah, it's packed.
Speaker 9: Well, you get a partnership with Beyonce, all the marketing
Speaker 9: you guys are spending in terms of targeting both young
Speaker 9: and older generations. But Harmeet, I want to ask about tariffs.
Speaker 9: So Levi expects tariffs from China about thirty percent, but
Speaker 9: increase expectations of twenty percent from the rest of the world.
Speaker 9: Where are you sourcing your genes materials? Is it more
Speaker 9: are you more exposed to that doubling in terms of
Speaker 9: are you getting materials from Vietnam in place of China?
Speaker 8: Yeah?
Speaker 7: So, or we're taking a holistic approach as we are
Speaker 7: able to offset the tariff impact. You know, as you
Speaker 7: think about this year, we raise guidance in the top
Speaker 7: line and bottom line and gross margin. So you know
Speaker 7: we've been able to withstand that your specific question, Bailey,
Speaker 7: we source about one percent we import into the US
Speaker 7: from China, a little over a percent from India most
Speaker 7: of and Vietnam is in the mid to high single digits.
Speaker 7: So most of our imports are from the Southeast Asian
Speaker 7: countries think Bangladesh, think Pakistan.
Speaker 8: And the rest of Asia.
Speaker 7: The way we think about our supply chain is fairly
Speaker 7: well diversified. We import from about twenty countries into the US.
Speaker 7: Sixty percent of our businesses outside the US, and so
Speaker 7: we're well positioned to mitigate and offset tariffs. And the
Speaker 7: way we are thinking about the holistic approach given that
Speaker 7: volume is driving a big piece of our you know,
Speaker 7: revenue momentum, and we have tenured vendor relationships, we're working
Speaker 7: with the vendors. We're looking at different cost efficiencies across
Speaker 7: our organization as well as you know, being very thoughtful
Speaker 7: about pricing.
Speaker 1: So let me just ask you though you guys, did
Speaker 1: you know you mentioned you raised your full yer outlook,
Speaker 1: you did warrant that tariffs are starting to bite profit
Speaker 1: profitability to measure by gross margins improves, so these are
Speaker 1: the good stuff. But again that tariffs are starting to bite, Harmie,
Speaker 1: can you tell us what that means? What the bite
Speaker 1: of tariffs? When? When? How much you know any color
Speaker 1: around that?
Speaker 8: Sure?
Speaker 7: So you know, overall, you know, we were able to
Speaker 7: raise top line and bottom line guidance despite absorbing tariffs,
Speaker 7: and so we are able to mitigate it. To the
Speaker 7: question about tariffs, Uh, you know, tariffs were introduced on
Speaker 7: Liberation Day. We normally buy our products, you know, six
Speaker 7: months in advance, and so you know, we're working through
Speaker 7: you know, our efforts and we've got different leavers to
Speaker 7: kind of position its who you take. Quarter three, the
Speaker 7: Quarterbach has reported gross margins are record, So we're able
Speaker 7: to offset taffs because we've got other things working for us,
Speaker 7: you know, as we grow our women's business, our direct
Speaker 7: to consumer business, and international, all of which are a
Speaker 7: creative to gross margins and allow us to mitigate and
Speaker 7: offset some of the terriff exposure. Quarter four, we did
Speaker 7: guide gross margins to be slightly down versus a year ago,
Speaker 7: and had it not been for tariffs, you know, we'd
Speaker 7: have grown gross margins. But overall, as we think about
Speaker 7: the year, we'll report again another year of record gross margins.
Speaker 7: So we're working on leavers for twenty twenty six. The
Speaker 7: good news is we'll end the year stronger and we
Speaker 7: believe a well positioned to have another strong year in
Speaker 7: twenty twenty six.
Speaker 9: And Carol, we've talked with a good friend, Peter Atwater
Speaker 9: for quite some time about that case shaped recovery where
Speaker 9: people who are well off are doing much better than
Speaker 9: those really in the bottom quintile.
Speaker 10: Harmie.
Speaker 9: When you look at your goods, when you look at
Speaker 9: the ability to raise prices from the impact of tariffs,
Speaker 9: which products are you able to more easily raise prices
Speaker 9: where you aren't going to see consumers push away? And
Speaker 9: how are you thinking about that strategy as it relates
Speaker 9: to say, the genes that you do sell through a
Speaker 9: Walmart where you don't have that gross margint going direct
Speaker 9: to consumer, and you do have likely at least when
Speaker 9: we look at the data consumer who's feeling the pinch
Speaker 9: of inflation broadly speaking.
Speaker 7: Yeah, and so the first thing Baily to your question
Speaker 7: is our products have well segmented depending on the income
Speaker 7: profile of different consumers. I talk blue tab, red tab
Speaker 7: and signature. Signature is what's sold into the lower income consumer.
Speaker 7: We've been very thoughtful about pricing. We're leading with product
Speaker 7: innovation rather than price, and so we're doing what we
Speaker 7: can to maintain a price point. It is evident in
Speaker 7: quarter three Signature, for example, I think is up in
Speaker 7: the load double digits for the year. As we think about,
Speaker 7: you know, our other products. The good news for us
Speaker 7: is our product pipeline has never been stronger. You know,
Speaker 7: we're leading with loose and baggy while at the same
Speaker 7: time selling a lot of slim and skinny both for
Speaker 7: him and her. You know, we've got wonderful you know,
Speaker 7: waist up products to think trucker jackets, think linen shirts,
Speaker 7: et cetera, et cetera.
Speaker 8: And so as a company.
Speaker 7: We're making this pivot to be more of a denim
Speaker 7: lifestyle retailer going forward. Our past was all about denim.
Speaker 7: Our future is going to be about denim lifestyle.
Speaker 1: I just want to know, do you really have a
Speaker 1: pair of baggy barrel jeans. I can't get my head
Speaker 1: around them. I'm trying, I'm trying. I'm just I haven't
Speaker 1: done it. I haven't done it. Rmid, What I do
Speaker 1: want to ask you to is you guys have had
Speaker 1: kind of a mission, a goal to get to ten
Speaker 1: billion in sales by twenty twenty seven. I think you
Speaker 1: may adjusted a little bit. I think also a fifteen
Speaker 1: percent EBIT margin. Could you reach fifteen percent in the
Speaker 1: next few years even if sales have not hit that
Speaker 1: ten billion, you know, talk to us a little bit
Speaker 1: about that mission.
Speaker 8: Yeah.
Speaker 7: No, you know, we gave out the expectation of ten
Speaker 7: billion and fifteen percent on I invested Day in the
Speaker 7: middle of June twenty twenty two. Since then, you know,
Speaker 7: there's been a lot of change and a lot of uncertainty.
Speaker 7: As a company, we've kind of, you know, navigated our
Speaker 7: way through uncertainty. We haven't given a new date on
Speaker 7: the ten billion and the twenty and the fifteen percent.
Speaker 7: Our thinking is we'll probably do that sometime next year.
Speaker 7: But your question, the company that we are building and
Speaker 7: the company that has got the foundation given way were
Speaker 7: ending this year, So you take twenty twenty five, we'll
Speaker 7: end about six percent organic growth.
Speaker 8: Last year it was three percent. The year before that
Speaker 8: it was flat.
Speaker 7: Thinking EBIT margins this year we lend about mid levens.
Speaker 7: Last year it was in the mid tens. The previous
Speaker 7: year it was about nine. So we've seen a steady
Speaker 7: progress and our view is we probably get to the
Speaker 7: fifteen percent faster than we get to the ten billion.
Speaker 7: But really a company that is steadily delivering mid single
Speaker 7: digit growth in a category that probably grows a little
Speaker 7: south of that.
Speaker 8: So our view is that we will.
Speaker 7: We are market leaders now in the US, number one
Speaker 7: in men's, number one in women's, and rarely resonating with
Speaker 7: the youth.
Speaker 8: And so the question is if you're able.
Speaker 7: To stay at you know, and implement our strategies our views,
Speaker 7: we can continue to be a market leader and probably
Speaker 7: pick up a little bit of share, especially because the
Speaker 7: denim category is accelerating. We've seen the acceleration in the US,
Speaker 7: we've seen the acceleration outside and that's largely driven by
Speaker 7: the world becoming more casual.
Speaker 1: Yea more genes in my wardrobe than I've ever had
Speaker 1: in like since high school. Like it's really kind of wild.
Speaker 1: Any Barey and I can got another.
Speaker 9: Question I was just gonna ask in terms of geographic expansion.
Speaker 9: When you think about China, what's going on with China
Speaker 9: and also what products do the Chinese consumers want is
Speaker 9: it that high end good or is it more of
Speaker 9: a bargain purchase.
Speaker 7: So China for US is still underpenetrated. China represents about
Speaker 7: two or three percent of our business. You know, our
Speaker 7: business in China has been slow and soft. The Chinese
Speaker 7: consumer right now is going through a bit of a
Speaker 7: macro on certain climate. But the good news for US
Speaker 7: is they love the brand. Brand equity scores are really solid.
Speaker 7: We think China can be, you know, a business that
Speaker 7: grows double digit over the long term. But your specific question,
Speaker 7: the Chinese consumer is fairly discerning on the brands.
Speaker 8: He or she gravit two.
Speaker 7: There is a high end consumer as well as a
Speaker 7: consumer that the mid market consumer, what.
Speaker 8: We call the co products.
Speaker 7: So if we think about our Asia strategy, we really
Speaker 7: you know, our products are relevant for the mid market consumer,
Speaker 7: while we also offer products for the higher premium end consumer.
Speaker 7: Thirty percent of the Asian denim category is premium and
Speaker 7: you know premium. For example, our highest spinnacle product is
Speaker 7: largely Japanese you know, fabric, Japanese denim and inspired by Selvision.
Speaker 7: So that's what we are selling and I think over
Speaker 7: time we'll be able to start growing our China business
Speaker 7: back in the low double digit rain.
Speaker 6: Yeah.
Speaker 9: Interesting, Seth, I will say, Carol, I know you mentioned
Speaker 9: you have more genes than ever. I have been buying
Speaker 9: the Sherpa jackets, the denim jackets like crazy.
Speaker 6: I don't know why.
Speaker 9: I have three of them in different colors.
Speaker 1: I've brought a bunch of out of jackets.
Speaker 9: That's what I'm in. I'm like, I don't wear jeans,
Speaker 9: I wear chinos, but I wear the denim jackets like crazy.
Speaker 1: I know, I just I don't know. I love it.
Speaker 1: I love it. Yeah, I like everybody I work and
Speaker 1: babis every morning.
Speaker 7: Yeah, and Bailly and Carol. Now we've got the blue tab.
Speaker 7: It's it's it's a full of jacket. You can definitely
Speaker 7: read two office depending on the on the on the
Speaker 7: uh you know, uh dress environment at Bloomberg. I walked
Speaker 7: in here fairly casual, so you know it's something that
Speaker 7: we are not bringing to offer. We should make your
Speaker 7: wardrobe at some stage.
Speaker 1: Our thanks to Harmi Singh, chief financial and Growth Officer
Speaker 1: at Levi Strauss Bloomberg Senior equities reporter Bailly Lipschultz joining
Speaker 1: me there as well. Coming up on Bloomberg Business Week,
Speaker 1: more from the c suite and another clue on the
Speaker 1: US economy amid a lack of government data. The CEO
Speaker 1: of industrial supplier Fastenal ways it that's coming up. This
Speaker 1: is Bloomberg.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern on Apple car
Speaker 2: Play and Android Auto with the Bloomberg Business App. You
Speaker 2: can also listen live on Amazon Alexa from our flagship
Speaker 2: New York station, Just Say Alexa played Bloomberg eleven thirty.
Speaker 3: Well.
Speaker 1: Earlier we talked about logistical real estate, you know, warehouses
Speaker 1: and such, and now we're talking about another essential part
Speaker 1: of the US economy, industrial suppliers, which are often a
Speaker 1: bell weather for how companies are dealing with shocks to
Speaker 1: the supply chain or tariffs. Earlier this week, fasten All
Speaker 1: reported third quarter earnings per share and operating income that
Speaker 1: were slightly below expectations. Alice note that pricing during the
Speaker 1: quarter was weaker than expected and marks the second straight
Speaker 1: quarter of soft pricing. Bloomberg's David Gore and I spoke
Speaker 1: with Daniel Floornies, He's CEO of Fastenal. We talked about
Speaker 1: how his company is handling tariffs and pricing concerns for
Speaker 1: the company's customers.
Speaker 11: We had a really good quarter we had we had
Speaker 11: a double digit quarter. We hadn't seen that for a
Speaker 11: couple of years. Double digit growth. Sorry, and please with
Speaker 11: the One of the challenges we had this year was
Speaker 11: there's a lot of fluidity around tariffs and what it
Speaker 11: means for pricing. And we will raise price to address
Speaker 11: costs in our customers supply chain. We really don't want
Speaker 11: to raise more than that because we believe it impairs
Speaker 11: our ability to grow as.
Speaker 6: Fast as we'd like.
Speaker 11: And you know, coming into the quarter, we estimated you
Speaker 11: know X for impact of pricing came in a little
Speaker 11: bit less.
Speaker 6: We lowered our number for the fourth fourth quarter.
Speaker 11: But the most important aspect is on a price cost basis,
Speaker 11: we are neutral and that's what we aspire to be.
Speaker 6: We'd rather just grow.
Speaker 9: Just one more question on pricing in terms of expectations,
Speaker 9: would you want to raise pricing, Like, do you get
Speaker 9: the sense that consumers and customers would push back, just
Speaker 9: given how you've been shifting into bigger customers spending much
Speaker 9: more money.
Speaker 11: Yeah, customers always push back on pricing. It doesn't matter
Speaker 11: a customer, we will we are having conversations with our customer.
Speaker 6: We will be.
Speaker 11: Doing some price increases in the Q four. I suspect
Speaker 11: we'll be doing some price increases as we move into
Speaker 11: twenty twenty six. But again, our first discussion with the customer,
Speaker 11: they understand it, they're willing to move on price. Our
Speaker 11: first discussion is always what are alternatives to this product?
Speaker 11: That maybe doesn't mean we have to raise your prices
Speaker 11: five percent. Maybe it means it only has to be
Speaker 11: two and we'd rather go to two because that's what
Speaker 11: that's what a supply chain partner does.
Speaker 9: Well, Dan, how do terriffs fit into this? Just given
Speaker 9: that according to analysts across the street, when we look
Speaker 9: at certain industries, now is when we're going to see
Speaker 9: tariff showing up in the third quarter in guidance as
Speaker 9: it relates to twenty twenty six, what are you seeing
Speaker 9: and how are you kind of attacking or addressing any
Speaker 9: pressures from tariffs?
Speaker 11: Yeah, so for us, tarif's been in the in the
Speaker 11: equation since the early part of the second order, a
Speaker 11: little bit of first quarter. I think in the individual
Speaker 11: that handles pricing historically, he will provide us an update
Speaker 11: once a month. He'd gotten the point where he was
Speaker 11: down on providing US updates. He was up to video
Speaker 11: number fourteen as of July that he was serving out
Speaker 11: to the field giving them guidance into what we were
Speaker 11: seeing in our supply chain. And so we've been adding
Speaker 11: price as we've gone through the year, and these have
Speaker 11: been discussions with customers.
Speaker 6: And I hope that answers your question.
Speaker 9: No, I think it does. But I think the big
Speaker 9: thing is are you mitigating the impact of tariffs? Are
Speaker 9: you shifting your supply chain? Is the expectation that you
Speaker 9: can have some kind of knock on effect as it
Speaker 9: relates to pricing if we do continue to see threats
Speaker 9: from the President going after countries like China or others.
Speaker 9: So how is that impacting when you look at your
Speaker 9: supply chain, when you look at the potential for pricing
Speaker 9: impacts in twenty twenty six.
Speaker 11: We've been moving supply chain around the planet in earnest
Speaker 11: since I was seventeen twenty eighteen time print. As our
Speaker 11: name would imply, we sell a lot of fasters, and
Speaker 11: most of the fasters in North America come from either
Speaker 11: mainland China or Taiwan and the automotive industry took the
Speaker 11: production there back in the fifties and sixties, actually took
Speaker 11: it to Japan and South Korea and then migrated from there.
Speaker 11: If I look at our resources, we now have a
Speaker 11: sourcing team in Shanghai, but we have a sourcing team
Speaker 11: in Bangkok. We have a sourcing team in Northern India.
Speaker 11: And we have work to diversify our supplier base around
Speaker 11: the planet and a little bit more in North America,
Speaker 11: but really around the planet, so to have diversity and
Speaker 11: supply so you're not caught off guard by some price
Speaker 11: change or a tariff change.
Speaker 6: In addition to that.
Speaker 11: We've taken supply chains coming into North America, which traditionally
Speaker 11: came in through the West Coast United States and then
Speaker 11: we would redistribute from there. We have moved supply chains
Speaker 11: so they're bringing product directly into the West Coast of
Speaker 11: Canada or the West coast of Mexico, because those two
Speaker 11: countries represent about fourteen percent of our revenue. Now you
Speaker 11: bypass the tariff. However, it's more expensive to break shipments
Speaker 11: down over in Asia and bring them in, but it's
Speaker 11: a lot less than a tariff.
Speaker 1: One of the things I want to ask you you
Speaker 1: talked about supply chains, is the endgame. Is it about,
Speaker 1: though largely reducing your exposure to China, which has been
Speaker 1: a pretty big one.
Speaker 11: It's it's reducing our customers exposure to any market, in.
Speaker 6: This case China and or Taiwan, but.
Speaker 11: To any market that are on the receiving end of
Speaker 11: some of the political wins and create an unstable supply
Speaker 11: base for our customer. Here it happens to be China,
Speaker 11: another month, it might be a different country. Another year,
Speaker 11: it might be a different country. It's diversifying your supply
Speaker 11: chain so your inks are not all in one basket.
Speaker 1: Read so whichever customer, yeah, whichever way the winds blow. Hey,
Speaker 1: One of the things I want to ask you, just
Speaker 1: big broadly the earnings up day today, you talked about
Speaker 1: the industrial environment still sluggish. We've heard similar commentary on
Speaker 1: this persistent sluggishness elsewhere from manufacturers, as well as caution
Speaker 1: around project delays. At what point does this become something
Speaker 1: more worrying than just sluggishness for us?
Speaker 11: It's been sluggish since November of twenty twenty two.
Speaker 6: Okay, when.
Speaker 11: We really key on what the industrial is still for
Speaker 11: supply management puts out the PMI index, and that's been
Speaker 11: sub fifty, which really plays into our customer base. Other
Speaker 11: than January and February of this year, that's been sub
Speaker 11: fifty since November of twenty twenty two. So we've been
Speaker 11: in a sluggish economy for a long time from our perspective,
Speaker 11: and other than living through the first part of it,
Speaker 11: where you had customers that were downshifting, what reason our
Speaker 11: growth is shining through.
Speaker 6: A different way. A. I think we're executing at a
Speaker 6: higher level.
Speaker 11: But B once you get through that downshifting, now you're
Speaker 11: just even if your customers are at a subdued level,
Speaker 11: you can grow in that kind of environment.
Speaker 6: And that's what's shining through in our numbers right now.
Speaker 3: All right.
Speaker 1: One thing I want to ask you, because as you
Speaker 1: would imagine, I don't know how much of this is
Speaker 1: pervasive in your world, but AI is like the NonStop
Speaker 1: conversation that we are having, certainly when it comes to
Speaker 1: activity and market impact. To what extent is AI maybe
Speaker 1: sucking up the oxygen in the economy. Are you seeing
Speaker 1: any signs of that or your world they're going to
Speaker 1: still need what you guys supply no matter what's going
Speaker 1: on with the AI spend and enthusiasm.
Speaker 11: Well, first off, we have a lot of we have
Speaker 11: a meaningful improvement in our revenue as it relates to
Speaker 11: things like data centers because we sell into a wide
Speaker 11: range of customer needs and end market needs. Whether that
Speaker 11: is the actual construction. I've visited many data centers being
Speaker 11: built where we have people on site. There after it's built,
Speaker 11: we're flying into that facility with things like air handling
Speaker 11: and maintenance equipment. In the case of the customers that
Speaker 11: sell into that sector, that's actually a strong business for
Speaker 11: us right now. And then as an organization, we're we're
Speaker 11: increasingly making use of AI in our own business and
Speaker 11: how we go to market and how we help our
Speaker 11: employees be more efficient in what they do.
Speaker 9: And Dan about forty five seconds here with in with
Speaker 9: keeping in mind data center construction, where are those products
Speaker 9: sourced from? Are those also heavily sourced from China and
Speaker 9: expose the tariffs or are they different supply chain altogether?
Speaker 6: There?
Speaker 11: You know there it's mostly different supply chain source, but
Speaker 11: it depends on the component. If it's facility maintenance, types
Speaker 11: of products they're coming from anywhere on the globe, and
Speaker 11: so they're subject to the same type of.
Speaker 6: Issues any product would have.
Speaker 11: But a lot of the components I know a lot
Speaker 11: of the manufacturers that we sell into. I visited one
Speaker 11: about a year ago in Michigan where they they were
Speaker 11: purposely avoiding China and they're selling directly into the data centers.
Speaker 1: You've been at Fastenel for a long time, You've seen
Speaker 1: different cycles. How do you describe this one? And again,
Speaker 1: just got about twenty seconds if you could be very quickly,
Speaker 1: very quick.
Speaker 11: Ooh, odd in the fact that you know similar what
Speaker 11: we saw on eighteen, but odd with the fact of
Speaker 11: it's just something on fluid and there's so many things
Speaker 11: that occur from week to week, month to month that
Speaker 11: are outside the norm, but the fundamentals still work.
Speaker 1: That was Daniel Florin, as CEO of Fastenal, joining US
Speaker 1: from Minnesota along with Bloomberg News correspondent host of the
Speaker 1: Bloomberg Big Take David Gora. By the way, this past week,
Speaker 1: Bank of America removed Fastenal from its US one list,
Speaker 1: which represents the bank's best investment ideas. Ba A also
Speaker 1: lowered its price target on the stock to forty eight
Speaker 1: dollars from forty nine dollars this year, but kept its
Speaker 1: by rating on the stock. Meantime, Barkley's also lowered its
Speaker 1: price target to forty five from forty nine dollars a year.
Speaker 1: That wraps up our first hour of the week. Get
Speaker 1: a edition of Bloomberg BusinessWeek from Bloomberg Radio. Ahead in
Speaker 1: the next sixty minutes, a government shut down, chronic crime,
Speaker 1: and more. How the Mayor of Baltimore is managing.
Speaker 12: We go and we identify those who are most likely
Speaker 12: to be the victim of perpetrator of gun violence, and
Speaker 12: we focus on them. We give them opportunities to change
Speaker 12: their life, and if not, we remove them via law enforcement.
Speaker 12: And that's how we're driving down violence. We're focusing on
Speaker 12: guns and the flow of guns into our city, going
Speaker 12: at the gun traffickers, those who are using guns, wrestling
Speaker 12: them at my direction with the police department, turning them
Speaker 12: over to our Stag's attorney in our Attorney General.
Speaker 1: Also sideways inheritances and the transfer of money, wealth and
Speaker 1: influence from men to women women.
Speaker 13: As you say, they do things differently, right, and they
Speaker 13: want to do things differently, and oftentimes when they're getting
Speaker 13: a hold of this wealth. Right when wealth is passing
Speaker 13: to them, either through their parents and family or through
Speaker 13: their spouses, they want to do it differently. They want
Speaker 13: to be served differently. Seventy percent of women leave their
Speaker 13: husband's financial advisor after a divorce or a death within
Speaker 13: one year.
Speaker 1: Plus the culinary producer behind all the food action in
Speaker 1: the Emmy Award winning hit The Bear, and the youngest
Speaker 1: female self made billionaire in the world. That's all ahead.
Speaker 1: This is Bloomberg Business Week. I'm Karl Masser.
Speaker 2: You're listening to the Bloomberg Business Weekdaily podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 1: We'll back here on Bloomberg Business Week. Tim is off
Speaker 1: this week, but we've got plenty ahead in this second
Speaker 1: hour of our weekend edition of Bloomberg Business Week, including
Speaker 1: the Mayor of Baltimore on how he is fighting gun
Speaker 1: violence in his city. Then the great transfer of wealth,
Speaker 1: sideways inheritances, the feminization of wealth, whatever you might call it.
Speaker 1: Women are increasingly in charge when it comes to money,
Speaker 1: power and influence, Also, we've got two of Bloomberg business
Speaker 1: Week's screen time. One to watch the chef and the
Speaker 1: culinary producer behind the Emmy Award winning hit The Bear,
Speaker 1: and then the youngest female self made billionaire in the
Speaker 1: world and what she's doing with Passes. We begin, though,
Speaker 1: with a view from the ground up, and that's why
Speaker 1: we always always love talking to mayors around the country.
Speaker 1: They are the ones on the ground in cities and
Speaker 1: towns across the United States, making the decisions that affect
Speaker 1: the lives of people in their communities and hearing from
Speaker 1: people in their communities. Now, cities are especially in the
Speaker 1: spotlight as President Trump slams many of the United States
Speaker 1: major cities and threatens to send in the National Guard,
Speaker 1: a policy that has faced resistance from Democratic governors, mayors,
Speaker 1: and some federal judges. Tim and I spoke with Baltimore
Speaker 1: Mayor Brandon Scott about how he is tackling crime in
Speaker 1: his city without the National Guard and how his residents
Speaker 1: are doing amid the government shut down.
Speaker 12: Well, there's a lot of my constitions unease right when
Speaker 12: you're thinking about over twelve thousand Baltimoreans work for the
Speaker 12: federal government, either directly or on contract, and then when
Speaker 12: you think about what that's going to mean for them
Speaker 12: and their families. They're just not at ease right now,
Speaker 12: and folks want to go to work, they want their
Speaker 12: government to be working. And of course then all of
Speaker 12: our retherdents who depend on programming and things that are
Speaker 12: just going to be out there that may not be
Speaker 12: having a direct impact as if yet father shut down,
Speaker 12: but as it continues and goes on, it would be.
Speaker 1: What do you consider what do you consider your biggest
Speaker 1: problem in running the city? I mean Baltimore.
Speaker 6: You know, we.
Speaker 1: Report about it a lot. It is the fourth most
Speaker 1: dangerous according to US News and World Report this summer,
Speaker 1: ranking Baltimore the fourth most dangerous city in the country
Speaker 1: behind Memphis, Oakland, and Saint Louis based on FBI data.
Speaker 1: They look at property crime, they look at murders per capita.
Speaker 1: But what are you as mayor? I'm sure there's a
Speaker 1: lot that's on your plate. What's top of mind?
Speaker 12: Well, listen, violence is always top of us. The reason
Speaker 12: why I got into office, and we understand that we
Speaker 12: have a long way to go. But I know, you
Speaker 12: guys know here Bloomberg Radio, the many years that we
Speaker 12: were number one on that list, and as you and
Speaker 12: I are talking today, I think it's the mode and
Speaker 12: the talversation around Baltimore and violence has shifted significantly. We
Speaker 12: have the fewest amount of homicide through any October seventh
Speaker 12: on record today. That is a big change. When I
Speaker 12: said twenty twenty one, laying out our conference and violence
Speaker 12: Prevention Plan, that we were going to reduce homicide by
Speaker 12: fifteen percent from one year to the next, people literally laughed.
Speaker 12: Right now, it's down thirty percent from last year, and
Speaker 12: last year was a record reduction for us. We're going
Speaker 12: to continue that.
Speaker 1: How did you do it?
Speaker 12: We did it throughout our conference's plan a week, which
Speaker 12: is which is a bunch of things. One first and foremost,
Speaker 12: we go and we identify those who are most likely
Speaker 12: to be the victim of perpetrator of gun violence, and
Speaker 12: we focus on them. We give them opportunities to change
Speaker 12: their life, and if not, we remove them via law enforcement.
Speaker 12: And that's how we're driving down violence. We're focusing on
Speaker 12: guns and the flow of guns into our city, going
Speaker 12: at the gun traffickers, those who are using guns, arresting
Speaker 12: them at my direction with the police department, turning them
Speaker 12: over to our stage attorney and our attorneys. We have
Speaker 12: historical levels of investment into community violence intervention where we
Speaker 12: have people who used to be on the other side
Speaker 12: of the law going out and preventing conflicts from escalating
Speaker 12: into violence.
Speaker 14: All of it. We're going after gun manufactured.
Speaker 1: People who understand where the problem the problem is. If
Speaker 1: you're pulling them in to help you, they.
Speaker 14: Were the problem and now they're part of the solution,
Speaker 14: and what better way.
Speaker 1: To do that gets people to do that well?
Speaker 12: Easy first and foremost, many people who have made that
Speaker 12: mistake don't want people coming behind them to make that
Speaker 12: and they know that we're growing this network of community
Speaker 12: violence intervention workers in our city. So the word is
Speaker 12: out that we want to give people a second chance
Speaker 12: to be a part of solving a problem that they
Speaker 12: once were causing.
Speaker 10: The city, though in the crosshairs of the president he
Speaker 10: called it a hellhole. Last month, you and Governor Wes
Speaker 10: Moore said that law enforcement from the state will patrol
Speaker 10: some areas. Has that begun?
Speaker 12: Yeah, that's begun, and that's the governor is actually restarting
Speaker 12: something that was ended by his predecessor. Think about it
Speaker 12: like this, you would not find any other state police
Speaker 12: department in any state in this country not operating at
Speaker 12: all in its only major city. That's Baltimore City was
Speaker 12: the only jurisdiction in Maryland that a Maryland state police
Speaker 12: did not operate in the Governor's restarting that, we're grateful
Speaker 12: for that support and to continue that work.
Speaker 10: Are you open to the presidents sending National Guard troops to.
Speaker 12: This We've been very clear about that. Why we have
Speaker 12: We know how to reduce violence in Baltimore. We have
Speaker 12: reduced violence to its lowest levels ever recorded on record,
Speaker 12: even lower than the president's first term. The way that
Speaker 12: we have done it in partnership with our community, with
Speaker 12: our police department, with ole station attorney Ourtorney General, and
Speaker 12: our federal law enforcement partners who work beside.
Speaker 14: Us each and every day. That's how we should continue
Speaker 14: that work.
Speaker 12: If the President wants to help us, he should restore
Speaker 12: grants and funding that was cut to organizations that helping that.
Speaker 12: Restore grants, I mean funding cut from those law enforcement agencies.
Speaker 12: This president has had the biggest of reduction in funding
Speaker 12: for federal law ensforment agencies.
Speaker 14: They should be restored.
Speaker 12: What funding are you not getting so for us not
Speaker 12: been directly impacted as of yet. It's our partner organizations
Speaker 12: like for example, a Life Bridge helps them runs the
Speaker 12: Center for Hope that's a part of our CVI network
Speaker 12: that has programming around CBI's community violence intervention. They's lost
Speaker 12: a five hundred thousand dollars grant, the same thing for
Speaker 12: living classrooms. That's big work that is going to be
Speaker 12: not happening, whether it be a hospital based response, our
Speaker 12: community based responders. We need a victim assistance for young people,
Speaker 12: getting those young people the services they need that helps
Speaker 12: to privent boalance as well.
Speaker 10: What will you do though, if the President sends troops, well, listen.
Speaker 12: Will be prepared to take whatever action that we can,
Speaker 12: be it legal, others, alongside our governor and our team,
Speaker 12: based on when, what and how the President does something
Speaker 12: if he does anything. But what we hope the President
Speaker 12: does is to continue to support those agents that are
Speaker 12: already working in our city and let them do their
Speaker 12: work and let the law enforcement partnership that is driven
Speaker 12: us results. This far carrious all the way.
Speaker 10: But even though crime has improved, even though you shared
Speaker 10: statistics that show they're the best that they've ever been,
Speaker 10: Like Carol mentioned your city is still on a list
Speaker 10: that you don't want to be on. So I say
Speaker 10: to people out there who are saying, well, I would
Speaker 10: feel more comfortable if there were an increased law enforcement presence,
Speaker 10: and that could include federal trips.
Speaker 12: Well, we had the National Guard in Baltimore in twenty
Speaker 12: fifteen following the unrest of Freddy Gray.
Speaker 14: It's one of the most violent years ever. It didn't help.
Speaker 12: Right, We have to remember, this is not what those
Speaker 12: folks signed up to do. Allow those folks who sign
Speaker 12: up to go after a gun, traffickers, murderers, robbers, car
Speaker 12: jackins to do their work and allow the other people
Speaker 12: to do their work. And listen, there are other lists,
Speaker 12: you know, there are many of these lists. We were
Speaker 12: on some list, on some list we weren't on all.
Speaker 12: The list that we want to be on is the
Speaker 12: list of who has the largest reductions. And you will
Speaker 12: be hard pressed to find a city in this country
Speaker 12: that's had a sustainable, long term reduction like Baltimore's had
Speaker 12: from a September of twenty twenty two, I mean twenty
Speaker 12: to twenty three until now.
Speaker 1: What do you see as what's wrong with politics today?
Speaker 1: What do you think is wrong with what some say
Speaker 1: is the Democratic Party not very clear in its mission
Speaker 1: and kind of stepping.
Speaker 14: Up well, very simply, I think that, and.
Speaker 1: I ask you because I think there's a lot of
Speaker 1: forgive me, but there's a lot of folks who think
Speaker 1: there are politicians who become career politicians and things haven't
Speaker 1: changed and we need some change.
Speaker 12: Well, I think that what folks have to understand is
Speaker 12: that for me, and I say this about the Democratic
Speaker 12: Party all the time, more recently, they have to let
Speaker 12: the folks that are closest to the problem be outfront
Speaker 12: and part of the solution, meaning they need to listen
Speaker 12: to mayors. The mayors are the ones that have to
Speaker 12: solve the problems. The mayors are the ones that have
Speaker 12: to meet the people in the grocery store. And we've
Speaker 12: proven in city after city at the city we know
Speaker 12: how to drive down crime. And you have to talk
Speaker 12: to people where they are. We have to get out
Speaker 12: of being up in the sky with pie and the sky,
Speaker 12: talk to people in real sense, real things that impact them,
Speaker 12: and explain to them how these things are going to.
Speaker 14: Make their communities better.
Speaker 1: How long do you want to be mayor?
Speaker 12: I want to be mayor for as long as the
Speaker 12: residence of Baltimore will have me. This will be my
Speaker 12: second term.
Speaker 14: Believe it or not.
Speaker 12: I've been an elected office since twenty eleven, and this
Speaker 12: is I've been in city hall since two thousand and seven.
Speaker 12: You're a young man right now, Yes, a young man.
Speaker 12: I'll be forty two on my birthday. But this is
Speaker 12: about making my city better. I got into this service
Speaker 12: because I saw someone get shot at seven years old
Speaker 12: and no one care and wanting to drive down that violence,
Speaker 12: to have vacant housing. Be it as lowest point in
Speaker 12: my lifetime in Baltimore. Something we're proud of, but we're
Speaker 12: not celebrating.
Speaker 14: We have a lot of work to do and we're
Speaker 14: going to do it.
Speaker 1: The reason I go back there is I do think
Speaker 1: we talked about this in media that there isn't a
Speaker 1: lot of you know, local publications anymore. A lot of
Speaker 1: newspapers have shut down, and so we get kind of
Speaker 1: the high in the Yeah, we don't need that, we
Speaker 1: get that view, but we don't. It's why we love
Speaker 1: talking to mayors. But often people are mayors and then
Speaker 1: they move up and they go to governor and then
Speaker 1: they go to Congress and stuff. So I'm just curious,
Speaker 1: how long do you want to stay on that loco?
Speaker 14: Yeah, everyone knows.
Speaker 12: Everyone knows I don't want to be governor, and everyone
Speaker 12: in Baltimore knows that I will be quite okay if
Speaker 12: being the Mayor of Baltimore is the last elected office
Speaker 12: I've had.
Speaker 14: This is my dream job as a child.
Speaker 12: I will hold it as long as the residents of
Speaker 12: Baltimore will allow me to do so, as long as
Speaker 12: I'm living within term limits.
Speaker 10: Before we let you go because you have a train
Speaker 10: to catch to get home, Yes, and we want to
Speaker 10: be respectful of your time. The attracting and retaining business
Speaker 10: to the city, we know that's what economic development is
Speaker 10: a way to improve cities. What are you doing right
Speaker 10: now to say Baltimore is open for business?
Speaker 8: Yeah?
Speaker 14: I think that way.
Speaker 12: We have to understand we had four billion dollars of
Speaker 12: investment into Baltimore. We have seven billion dollars investment coming
Speaker 12: into downtown Baltimore, whether it's t ro Price's new headquarters.
Speaker 12: So under Armer's new headquarters. Everyone knows throughout Downtown Rise plan,
Speaker 12: we are open for business in the city of Baltimore.
Speaker 12: Re Forming our permit process and reforming our zoning code,
Speaker 12: all the things that we need to do to help
Speaker 12: grow business in Baltimore, especially in the tech and life
Speaker 12: science industry that is taken off out of Hopkins and
Speaker 12: out of the University of Maryland, putting a lot of
Speaker 12: money in a lot of tech businesses out to the ETHO.
Speaker 1: Any signs that we're headed towards a recession.
Speaker 14: Well we'll see. We know that with terrorists and all
Speaker 14: the other.
Speaker 12: Things going, we just have to all be mindful of
Speaker 12: what's happening and prepare as we're doing our budgets. I've
Speaker 12: been talking to my brother and system mayors to make
Speaker 12: sure that we're being responsible right now because we do
Speaker 12: not know yet what.
Speaker 14: Is to come.
Speaker 1: That was Baltimore Mayor Brandon Scott. You're listening to Bloomberg
Speaker 1: Business Week coming up. How women are joining the billionaire ranks.
Speaker 13: The majority of them were actually moderate to aggressive because
Speaker 13: they saw the power of not just gaining wealth through
Speaker 13: working or through transition, but actually gaining well through the
Speaker 13: capital markets right investing in items that will end securities
Speaker 13: and portfolios that will actually help them grow their portfolio.
Speaker 13: Private markets is a great example, again for a financial
Speaker 13: advisor to play that role and help and coach and
Speaker 13: guide a woman and how she thinks about her portfolio
Speaker 13: across public and private.
Speaker 1: You know women oftentimes want to do. This is Blueberg.
Speaker 2: This is the Bloomberg Business Daily Podcast. Listen live each
Speaker 2: weekday starting a two pm Eastern on Applecarplay and the
Speaker 2: Android Auto with the Bloomberg Business App. You can also
Speaker 2: listen live on Amazon Alexa from our flagship New York
Speaker 2: station just Say Alexa played Bloomberg eleven thirty.
Speaker 1: Wall Street is experiencing a new type of wealth transfer.
Speaker 1: More than a dozen women in the world's five hundred
Speaker 1: richest people have become billionaires after the death of a spouse.
Speaker 1: That's the highest number ever. The so called sideways inheritances
Speaker 1: are increasingly shaping global business as women take over huge
Speaker 1: empires from finance to consumer goods and gambling. Today, those
Speaker 1: women oversee record fortunes totaling three hundred and sixty five
Speaker 1: billion dollars, roughly tripling since twenty sixteen, according to the
Speaker 1: Bloomberg Billionaires Index. The changes are creating huge implications for
Speaker 1: how vast sums are invested. Bloomberg's Matt Miller and I
Speaker 1: spoke with Jamie mcgheira. She's head of US Wealth Advisory
Speaker 1: and head of Retirement at Blackrock. It's the world's largest
Speaker 1: fund manager, which not to day record thirteen point five
Speaker 1: trillion dollars in assets. Blackrock reporting earnings this past week,
Speaker 1: so we get an update on that number. We talked
Speaker 1: with Jamie though about the ways women are reshaping the
Speaker 1: investment industry. You know, we are talking about the environment generally,
Speaker 1: So let's start there. I know we did that over
Speaker 1: the summer when we talk because Blackrock just sees so
Speaker 1: much in terms of the funds it oversees and the flows,
Speaker 1: and the flows continue to grow, but that doesn't mean
Speaker 1: the flows are always going in the same places. What
Speaker 1: can you give us insight in terms of where money
Speaker 1: is going and where money is going out of.
Speaker 13: Yeah, So, first of all, excellent to be here and
Speaker 13: you started by talking about flows. I'm going to take
Speaker 13: a gender perspective on flows, yeah, and talk to you
Speaker 13: a little bit about where we see money going globally
Speaker 13: with women. And so women more and more are earning wealth,
Speaker 13: they're acquiring wealth, they're owning wealth, They're playing a larger
Speaker 13: role in capital markets. They are investing and benefiting from
Speaker 13: these capital markets, and we think there's no better sign
Speaker 13: of hope and the future than having people invest and
Speaker 13: grow along the capital markets.
Speaker 1: Is it because they're earning it themselves and they're having
Speaker 1: some say or is it also in terms of couples,
Speaker 1: because they are often breadwinners as well, that they also
Speaker 1: have a say at the table. Yeah, so it's both.
Speaker 13: Right, So when you think about women, women are more
Speaker 13: often now becoming breadwinners, primary breadwinners. Quite often, they're also
Speaker 13: contributing to household along with their spouses. They're earning more money,
Speaker 13: but they're also acquiring and you mentioned the wealth transfer.
Speaker 13: You know, we think about that in two ways. There's
Speaker 13: the intergenerational wealth transfer, where they're gaining assets maybe from
Speaker 13: their parents as they pass away. But the more interesting
Speaker 13: one is this horizontal transfer. Right, So if a spouse
Speaker 13: passes away or if there's a divorce, women are acquiring
Speaker 13: assets in that way and they need financial advisors to help.
Speaker 13: They're reshaping the industry and women have just not been
Speaker 13: served in the way they need to be served in them.
Speaker 1: We think about that right with Melinda Gates. We think
Speaker 1: about it with you know.
Speaker 14: Jeff beasis.
Speaker 1: No, but I'm just saying there was big divorces there.
Speaker 1: You had significant players, certainly in wealth overall, but also
Speaker 1: in philanthropy.
Speaker 4: Yes.
Speaker 15: Yes, Actually, Ceruly estimates that globally one hundred and twenty
Speaker 15: four trillion dollars will change hands in this silver tsunami
Speaker 15: and then and then their current forecasts are that fifty
Speaker 15: four trillion will be passed to spouses first before it
Speaker 15: goes down another generation, So forty percent of those spousal
Speaker 15: transfers will be to women. So this is what Sally
Speaker 15: Crawchak calls the feminization of wealth. And the idea is
Speaker 15: that when are The important idea I think here for
Speaker 15: you for your industry is that when women get hold
Speaker 15: of this money, they often don't stick with their same
Speaker 15: wealth managers. They often say, you know what, I'm going
Speaker 15: to go with someone else now, So what do you
Speaker 15: do if you want to get hold of a piece
Speaker 15: of that pie?
Speaker 13: Yeah, So maybe I might even just dimensionalize what you
Speaker 13: mentioned because I think about it in percentages. So today
Speaker 13: let's call it women responsible and controlling thirty percent of
Speaker 13: the world's wealth. That will be fifty percent by twenty thirty.
Speaker 13: That will be seventy percent by twenty seventy. So these
Speaker 13: are big numbers, amazing big numbers. And women, as you say,
Speaker 13: they do things differently, right, and they want to do
Speaker 13: things differently. And oftentimes when they're getting a hold of
Speaker 13: this wealth, right, when wealth is passing to them, either
Speaker 13: through their parents and family or through their spouses, they
Speaker 13: want to do it differently. They want to be served differently.
Speaker 13: Seventy percent of women leave their husband's financial advisor after
Speaker 13: a divorce or a death within one year. Seventy percent.
Speaker 1: Why is that?
Speaker 13: Because they oftentimes felt not heard, not part of the conversation,
Speaker 13: not at the table and making decisions. You know, there's
Speaker 13: a lot of misconceptions around women, right. People think women
Speaker 13: are engaged with finance. It's just not true. A third
Speaker 13: of US households have women as the primary financial decision maker.
Speaker 13: People think women or call women perhaps a bit risk averse.
Speaker 1: Well, that's what I wanted to ask you. Are women
Speaker 1: risk averse? Like, give me an idea when you're talking
Speaker 1: about investments. I mean, we've been thinking about the AI
Speaker 1: trade or private assets. Are they risk averse? So we
Speaker 1: did a study to make generalist No, but I'm curious
Speaker 1: that there are.
Speaker 13: So okay, so not a monolith, right. Women are very different.
Speaker 13: All my friends are different than me. We all do
Speaker 13: different things and need different things. But generally speaking, we
Speaker 13: did a study with twenty five hundred female investors. When
Speaker 13: we talk to them about their risk tolerance, the majority
Speaker 13: of them were actually moderate to aggressive because they saw
Speaker 13: the power of not just gaining wealth through working or
Speaker 13: through transition, but actually gaining well through the capital markets
Speaker 13: right investing in items that will end securities and portfolios
Speaker 13: that will actually help them grow their portfolio. Private markets
Speaker 13: is a great example again for a financial advisor to
Speaker 13: play that role and help and coach and guide a
Speaker 13: woman and how she thinks about her portfolio across public
Speaker 13: and private. Last time we were together, we talked about
Speaker 13: direct indexing and the role of taxes or you know,
Speaker 13: women oftentimes want to you're laughing index.
Speaker 8: Let me know what.
Speaker 15: I anchored the ETF show for a long time. That's
Speaker 15: a big part of that discussion as well. You know what,
Speaker 15: it's not just women. Obviously, kids are going to get
Speaker 15: hold of a lot of this money. And I think
Speaker 15: I'm not sure about women, but I know with younger
Speaker 15: people they want to do more impact investing than their
Speaker 15: parents did or their grandparents did. So is that also
Speaker 15: a key to trying Because I'm thinking from the perspective
Speaker 15: of a wealth manager who wants more business. So what
Speaker 15: I need to do is say, hey, I can I
Speaker 15: can set up some direct indexing for you, and I
Speaker 15: can help you make an impact with the money you invest.
Speaker 15: It's not just to make more money. You're also going
Speaker 15: to change some part of the world that you want to.
Speaker 15: Is that the case it is?
Speaker 13: And I like to use the word purpose because actually
Speaker 13: impact is many different meetings. And so if I'm a
Speaker 13: financial advisor and I'm working with a younger client or
Speaker 13: a woman, I'm going to be talking to them. By
Speaker 13: the way, men too, Right, it's not just about the
Speaker 13: impact you're having. You could invest in a way that
Speaker 13: maybe aligns with your values and maybe have certain values
Speaker 13: that are important to you to hold in that portfolio.
Speaker 15: I love motorcycles, and.
Speaker 14: There we go.
Speaker 1: But you know, I often wonder about that because you know,
Speaker 1: if you care about the environment, but if an investment
Speaker 1: doesn't pay, do people are people doing that because they
Speaker 1: believe in it, but it may not return as much
Speaker 1: as something else.
Speaker 13: I'm going to give you an answer that will be
Speaker 13: terribly unfulfilling. It depends, Okay, Right, so there are people.
Speaker 13: And by the way, let's step away from the portfolio
Speaker 13: for a moment and say what about philanthropy. This is
Speaker 13: where I come back to purpose. Right. People are looking
Speaker 13: to put their money to good cause, and that might
Speaker 13: be philanthropic. It might be impact in their portfolio. It
Speaker 13: might be aligning with the values I have. It might
Speaker 13: also be sending my children to school, or helping my
Speaker 13: elderly parents, or starting a new business. Right, how about
Speaker 13: that for purpose?
Speaker 15: Or shielding your money from taxes?
Speaker 3: Right?
Speaker 15: I mean, I guess I'd be willing to take somewhat
Speaker 15: of a loss by putting my money into a philanthropical vehicle,
Speaker 15: especially if it's compared to a much bigger loss by
Speaker 15: giving it away to Uncle Sam, state, local, and federal taxes.
Speaker 14: Yeah.
Speaker 1: And again that's why don't look at things in a vacuum.
Speaker 1: You have to look at them right overall.
Speaker 13: Holistic wealth planning, and again the role of a financial
Speaker 13: advisor is critical.
Speaker 1: There got to ask you just in general, when you
Speaker 1: look at this environment, and we talk a lot about
Speaker 1: a bubble, right now, I don't know what is what
Speaker 1: is your take on it? What are you or what
Speaker 1: are the conversations you're having with clients about how they
Speaker 1: feel about Are they little nervous? That's about that trade.
Speaker 13: Yeah, we talk about I mean we talk to clients,
Speaker 13: advisors and clients institutions globally all the time. Look, the
Speaker 13: markets are the markets, and there are long term investors
Speaker 13: that need to just keep staying with the markets. We
Speaker 13: talk about it's not time in the market or timing
Speaker 13: the markets. It's time in the markets. The other thing, though,
Speaker 13: is you just have to acknowledge that there's uncertainty out
Speaker 13: there right. There is volatility, there are things going on
Speaker 13: in the markets that again everyday people, let's take it
Speaker 13: to America and Americans every day people need professional advice.
Speaker 13: They need someone they can trust that will help them
Speaker 13: navigate that through professionally managed solutions or through advice. But
Speaker 13: there is uncertainty out there. But again we come back
Speaker 13: to it's time in the market, not timing the market.
Speaker 1: Twenty seconds, Jamie, I mean on more people feeling comfortable
Speaker 1: putting money to work, or they after kind of a
Speaker 1: nice bounce from the April lows, or they're like, I'm
Speaker 1: good I'm done. I want to be a little bit
Speaker 1: more conservative, just quickly.
Speaker 13: No, we are seeing flows into portfolios and ways that
Speaker 13: are across.
Speaker 1: As I said, black Rock was up a trillion dollars
Speaker 1: since the summer we talk.
Speaker 13: We are having the best conversations we've ever been having
Speaker 13: with financial advisors, institutions and wealth managers across the world.
Speaker 13: People are very interested.
Speaker 1: That was Jamie mcgheira, head of US Wealth Advisory and
Speaker 1: head of Retirement over at Blackrock. Bloomberg's Matt Miller joining
Speaker 1: us as well there too, still ahead on Bloomberg BusinessWeek.
Speaker 1: A recipe for success when it comes to storytelling. We've
Speaker 1: got the chef and culinary producer of the Emmy Award
Speaker 1: winning FX hit The Bear.
Speaker 16: There is so much camaraderie, chemistry, teamwork andens that gets
Speaker 16: you coming back every day. I learn so much about
Speaker 16: who I am as an individual by the challenge of,
Speaker 16: you know, running restaurants line cooking. Not only do I
Speaker 16: develop my skills as like a natural chef, but I
Speaker 16: think as a person. I've learned so much from every
Speaker 16: single person that I've been in a kitchen.
Speaker 1: With and exclusive access to influencers without the nudity. It's
Speaker 1: the it is venture from the youngest female self made
Speaker 1: billionaire in the world.
Speaker 17: Anyone can make money. It's more so like the amount
Speaker 17: of people that are willing to put in the time
Speaker 17: to make the content right. It's just like how many
Speaker 17: people are willing to work hard to make that income.
Speaker 17: And when you just look like really every career on
Speaker 17: this planet, there's a limited amount of people willing to
Speaker 17: put into effort. And we see that the people that
Speaker 17: are willing to put into effort so like churn out
Speaker 17: content are the ones succeeding.
Speaker 1: More of our favorite conversations at this month's screen Time event.
Speaker 1: They're coming up next when Bloomberg Business Week continues.
Speaker 2: You are listening to the Bloomberg business Weekdaily podcast. Catch
Speaker 2: us live weekday afternoons from two to five pm Eastern,
Speaker 2: Listen on Apple CarPlay and Android Auto with the Bloomberg
Speaker 2: Business app, or watch us live on YouTube.
Speaker 1: So we wanted to wrap up this hour by bringing
Speaker 1: back some of our favorite conversations from this month's Bloomberg
Speaker 1: screen Time event held recently in Hollywood, California, and that
Speaker 1: brings us to a chef and a culinary producer of
Speaker 1: the Emmy Award winning hit FX show The Bear. She
Speaker 1: is on Bloomberg BusinessWeek screen Time Ones to Watch List.
Speaker 1: She is Courtney Store and she sat down with Tim
Speaker 1: and me to talk about her world.
Speaker 16: Culinary producer deals with kind of macro and micro issues
Speaker 16: of the show. So I work very closely with Christopher,
Speaker 16: who is the creator of The Bear, also my brother,
Speaker 16: and then you know, the writing team, and I kind
Speaker 16: of kind of help inform some of the character development
Speaker 16: based on my own personal experience. And then every day
Speaker 16: on the show i'm there. I do work hand in
Speaker 16: hand with my culinary team, and we do all of
Speaker 16: the food.
Speaker 1: We cook it.
Speaker 16: We don't have food stylus, so everything you see on
Speaker 16: the show, we run it like an actual restaurant, so
Speaker 16: we have a full team. But I'm also there to
Speaker 16: help sort of work with, you know, the film department,
Speaker 16: set decoration props to make sure we are as accurate
Speaker 16: as possible, and it kind of I wear a lot
Speaker 16: of different hats, so wherever they need me, I go.
Speaker 16: But I definitely use the script to inform the direction
Speaker 16: of the food, and then I'm responsible to work with
Speaker 16: the cast to kind of bring those things to life
Speaker 16: and as you see on the show, these actors are
Speaker 16: actually cooking, so we don't use hand doubles like they're
Speaker 16: doing it.
Speaker 1: So it has such a thing as hand doubles and
Speaker 1: cooking of course. Yeah, all right, so okay, first of all,
Speaker 1: it's like the food is I mean, I don't want
Speaker 1: to say, because the actors on the show are incredible,
Speaker 1: but it's like the main actor. So how hard is
Speaker 1: it to do what you do?
Speaker 16: It's actually it's it's challenging, but it's very fun because
Speaker 16: I'm coming from the real restaurant world. I'm a chef,
Speaker 16: you know, I've been a chef here in Los Angeles
Speaker 16: for many years. I've been in the restaurant world forever,
Speaker 16: and I think bringing these things to life takes a
Speaker 16: lot of like information of all the restaurants that I've
Speaker 16: been in, and then doing it on camera and then
Speaker 16: having it not only look great, but time and temperature
Speaker 16: sensitive wise. We shoot very very fast, so it really
Speaker 16: is a team effort to be like this is the
Speaker 16: end dish and getting everybody in the loop of how
Speaker 16: and when to shoot it when it would perfect.
Speaker 1: I don't want thing's melting or we're stying or like right, yeah,
Speaker 1: so you have this background as a chef, you have
Speaker 1: a background a chef, a chef, you have background in
Speaker 1: culinary training.
Speaker 10: Mattie Matheson, of course, is an actual chef. Jeremie Allen
Speaker 10: White did go to Yes a couple of weeks of
Speaker 10: culinary Yeah.
Speaker 16: Io did too, Yes, Io went, Liza went. They all
Speaker 16: spent time with me directly here in Los Angeles in
Speaker 16: my kitchen, my catering kitchen, where we trained to work
Speaker 16: on some specifics for the show that would be done
Speaker 16: on camera. As you see, you know Tea's character, she's
Speaker 16: you know, fullaying Bronzeno in culinary school and she's left handed.
Speaker 16: So how we filmed that scene and how she had
Speaker 16: to practice that scene. It's like we have to actually
Speaker 16: apply these skills so that they read on camera. And
Speaker 16: it's been so helpful for their own journey to actually
Speaker 16: experience culinary school, working with chefs, stodging and restaurants, and
Speaker 16: then actually doing it on camera really helps them get
Speaker 16: it right.
Speaker 1: What were they like in the beginning, Like was it
Speaker 1: like I think everyone well, I think there was so crazy.
Speaker 16: I mean, iow is very she loves food, so like
Speaker 16: I feel like Jeremy Iolonel, you know, Liza. They all
Speaker 16: have passion for food, so that helps, and they were
Speaker 16: eager to get it right.
Speaker 1: And I don't want to diss Yes, I know they've.
Speaker 16: Come a long way a different skill. Yes, they've come
Speaker 16: a long way. And I see the effort that they
Speaker 16: put in each season. And remember now we're going into
Speaker 16: our fifth season. So we practice before we go to
Speaker 16: film each each year, so they're building their skills as
Speaker 16: we go.
Speaker 10: So my wife work in kitchensertion, so we would watch
Speaker 10: the show together and she'd be like, this is what
Speaker 10: it's actually like. The masking tape on labeling things, and
Speaker 10: like we actually drink out of those like to go containers.
Speaker 16: We call them Deli's.
Speaker 10: Okay, that's what it's like. I worked at Taco Bell,
Speaker 10: so I have no idea what's important it's but it's
Speaker 10: not like this at all. But I got to tell you, like,
Speaker 10: after watching a few episodes of the first season, I'm like,
Speaker 10: who wants to do this? The pressure is crazy. You're
Speaker 10: getting paid a fraction. It's like it's like the pressure
Speaker 10: of being a brain surgeon without any of the pay.
Speaker 2: Yeah, and the hours are worse.
Speaker 16: Yeah, I think that's a really good question. And I
Speaker 16: think what the show does kind of do a really
Speaker 16: good job at is show some of the difficulties and
Speaker 16: some of the wonderful things, like there is so much camaraderie, chemistry,
Speaker 16: teamwork in kitchens that gets you coming back every day.
Speaker 16: I learn so much about who I am as an
Speaker 16: individual by the challenge of you know, running restaurants line cooking.
Speaker 16: Not only do I develop my skills as like a
Speaker 16: natural chef, but I think as a person, I've learned
Speaker 16: so much from every single person that I've been in
Speaker 16: a kitchen with. And that's from the porters to the dishwashers,
Speaker 16: to the front of house host to you know, the
Speaker 16: head chef. There is always something to learn in kitchens
Speaker 16: and it's fun. It's actually quite fun. It's stressful, yes,
Speaker 16: but there is a reason that people come back every day.
Speaker 1: All right, So tell us something we're something up earned
Speaker 1: or we're all Does that happen a lot on the show. Yeah, Well,
Speaker 1: when you're like going, we climbing is so important of course.
Speaker 16: Of course, there's a lot of setting each other up
Speaker 16: for success. And I have to say, like, without my
Speaker 16: culinary team, we are very diligently working to make the
Speaker 16: best of everyone's time that is working alongside us. And
Speaker 16: there's a huge, incredible camera department that we're you know,
Speaker 16: being mindful of them holding these heavy cameras and you know,
Speaker 16: getting it right. So we practice a lot before we
Speaker 16: actually shoot. There is a lot of work on the
Speaker 16: pre production side before we have cameras rolling. It's really
Speaker 16: important that we come and like bring our a game
Speaker 16: because we don't want things to earn of course, like
Speaker 16: we have to redo dishes if ice cream moltse or
Speaker 16: something like that, but we make sure we're prepared to
Speaker 16: set up everybody for it looks like.
Speaker 1: Anything else in terms, like you just make sure everybody's
Speaker 1: on their a game. We treat it like service.
Speaker 16: We treat it like a dinner service.
Speaker 1: To change your job.
Speaker 10: Yeah no, I don't think it's in my DNA.
Speaker 16: Yeah, yeah, I think you'd be surprised, though. I think
Speaker 16: some of my best cooks I ever cooked a day
Speaker 16: in their life.
Speaker 1: Really. Yeah. That's Courtney storer chef and culinary producer of
Speaker 1: The Bear and on the Bloomberg BusinessWeek screen Time Ones
Speaker 1: to Watch list. Also included in that group is the
Speaker 1: youngest female self made billionaire in the world. She is
Speaker 1: the co founder of Scale ai, which after a multi
Speaker 1: billion dollar investment from Metal Platforms, valued the company at
Speaker 1: more than twenty nine billion dollars. That's not all that
Speaker 1: she's doing though right now. She is also the founder
Speaker 1: and CEO of Passes, which helps social media influencers diversify
Speaker 1: their income streams. Think exclusive photos, DMS, video calls, live streams,
Speaker 1: and more. She checked in with Tim and me All
Speaker 1: from Bloomberg screen Time.
Speaker 17: Anyone can join a platform as long as they're not
Speaker 17: creating new content, so that's it.
Speaker 1: It's a dividing line. That's a dividing line. So talk
Speaker 1: to us about your growth that you're seeing on the
Speaker 1: platform in terms of people you know wanting to be
Speaker 1: on it, staying on it. Talk to us about some
Speaker 1: of the velocity that you're seeing. Yeah, definitely.
Speaker 17: Well, with creators that make over five thousand a month,
Speaker 17: we have near one hundred percent retention, which is really exciting.
Speaker 17: We see in four x growth from twenty twenty three
Speaker 17: to twenty four to twenty twenty five, and hopefully we'll
Speaker 17: see more of that, which is exciting. And then we
Speaker 17: have crossed to nine figures in earnings four creators, which
Speaker 17: is also very exciting. So those are just like high
Speaker 17: level numbers I can share with you guys today.
Speaker 10: Well, some of the reporting around OnlyFans, for example, has
Speaker 10: has shown that, like there's a small number of people
Speaker 10: who make the vast majority of the money on the platform.
Speaker 10: Is it more evenly distributed on passes?
Speaker 17: I would definitely say it's more evenly distributed. But I
Speaker 17: would also say that like our top like let's say
Speaker 17: thirty percent of creators make the majority of the GMV.
Speaker 10: That's so that's a challenge for people who are trying
Speaker 10: to get in.
Speaker 17: I mean, I would say that anyone can make money,
Speaker 17: it's more so like the amount of people that are
Speaker 17: willing to put in the time to make the content right,
Speaker 17: It's just like how many people are willing to work
Speaker 17: hard to make that income. And when you just look
Speaker 17: like really every career on this planet, there's a limited
Speaker 17: amount of people willing to put into effort. And we
Speaker 17: see that the people that are willing to put into
Speaker 17: effort to like churn out content are the ones succeeding.
Speaker 1: Lucy, how do you bring or track people to the platform, Like,
Speaker 1: what do you guys have to do?
Speaker 17: So a lot of it is organic, so word of mouth.
Speaker 17: A lot of creators just talk about like how much
Speaker 17: they love the platform and how much they've made, and
Speaker 17: people hear about it, so they end up joining. Other
Speaker 17: than that, we do a lot of social media. We
Speaker 17: do a lot of events because we think that's a
Speaker 17: relationships driven business where I think there's like platform retention,
Speaker 17: but there's also emotional retention, and that motion retention comes
Speaker 17: like people to people connections and the creator economy. Emotional
Speaker 17: retention is a very real thing. I would say it's
Speaker 17: potentially stronger than platform retention. So we work on a
Speaker 17: lot of face to face interactions with creators as well.
Speaker 10: You dropped out of Carnegie Mellon for a teal fellowship. Obviously,
Speaker 10: in hindsight it was the right move. He went on
Speaker 10: to co create scale Ai, incredible success there. I'm just
Speaker 10: curious though about your view of higher education. Having participated
Speaker 10: in it for a short time and then left, how
Speaker 10: do you think higher education has to change to prepare
Speaker 10: the next generation of leaders, to prepare the next generation
Speaker 10: of entrepreneurs.
Speaker 17: Yeah, so I think that with higher education. Well, first
Speaker 17: of my view on higher education is that I actually
Speaker 17: encourage everyone to do college for one to two years.
Speaker 17: Not because I think you're going to be learning a
Speaker 17: lot in your classes, but because I think there's no
Speaker 17: period of time in your life that you're going to
Speaker 17: be thrown into where you're going to be in a
Speaker 17: high density of intellectual individuals that all have no friends. Like,
Speaker 17: if you think about it, even when you graduate college
Speaker 17: and you go enter the job force, most of the
Speaker 17: people at the company that you're about to work for
Speaker 17: already have friends, so it's harder to break into a
Speaker 17: social team versus. College is the only period in your
Speaker 17: life where literally everyone in the freshman class knows nobody,
Speaker 17: right a.
Speaker 1: Grand social expense exactly.
Speaker 17: Yeah, And it's a high density network of people just
Speaker 17: as intellectually intelligent as you. And I think college is
Speaker 17: really where you find your future co founders, your future hires,
Speaker 17: et cetera. Because when you're starting a company, for example,
Speaker 17: who is going to turn down a multi million dollar
Speaker 17: offer to join you? And the most talented people, like
Speaker 17: the most talented engineers, are getting those straight out of
Speaker 17: college right now. Only people that like really believe in
Speaker 17: you because they have that emotional connection. So I really
Speaker 17: encourage everyone to go to college and meet as many
Speaker 17: talented people as they can the first one to two years.
Speaker 17: In terms of how I see college moving on towards
Speaker 17: the future, I think from my own personal experience, I
Speaker 17: do think that we could be learning a lot more
Speaker 17: practical skills that we can actually use in the job force. So,
Speaker 17: for example, when I was studying career science at Carnegie Mellon,
Speaker 17: a lot of it was very theoretical math, and I
Speaker 17: felt like I learned the most about product sense, about
Speaker 17: actually like making aps et cetera. Through hackathons that was
Speaker 17: attending every few weeks.
Speaker 1: It's almost like the concept of trade schools somewhere with
Speaker 1: higher education. There's something there. What your twenty seconds on
Speaker 1: AI in terms of yeah, so I'm pat it's going
Speaker 1: to have on our world for sure, Either that or indifferent.
Speaker 17: I'm excited. I think that with every technological innovation, things
Speaker 17: have improved in the world for everybody. I think that
Speaker 17: we should view AI as our co pilot and not
Speaker 17: something that's going to replace us. It's going to help
Speaker 17: us be better at our jobs.
Speaker 10: You're not scared, No, should we be scared?
Speaker 1: No?
Speaker 3: All right?
Speaker 1: Our Thanks to Lucy Go, founder and CEO of Passes
Speaker 1: and co founder of Scale Ai. And that wraps up
Speaker 1: the weekend edition of Bloomberg Business Week from Bloomberg Radio.
Speaker 1: Thank you so much for joining us. Be sure to
Speaker 1: tune into Bloomberg Business Week Daily Monday through Friday starting
Speaker 1: at two pm Wall Street Time on Bloomberg TV, Bloomberg Radio,
Speaker 1: and on Serious six sem Channel one twenty one. You
Speaker 1: can listen to us also on Apple CarPlay and Android Auto.
Speaker 1: It's freeing the Apple App Store or on Google Play.
Speaker 1: You can also watch our daily broadcast on YouTube. Just
Speaker 1: search Bloomberg Podcasts where simulcast on Bloomberg Originals available at
Speaker 1: Bloomberg dot com, Slash Originals, and streaming platform including Roku, Amazon, fireTV,
Speaker 1: Simsung TV Plus and more. Find our Bloomberg Business Weekdaily
Speaker 1: Podcast at Bloomberg dot com, Apple, or wherever you get
Speaker 1: your podcasts, and always check out the latest edition of
Speaker 1: the magazine. It is available on newsstands at Bloomberg dot
Speaker 1: com and always on the Bloomberg terminal. I'm Carol Masser
Speaker 1: Tim We'll be back next week. Have a good and
Speaker 1: safe weekend everyone.
Speaker 2: This is the Bloomberg Business Week Daily Podcast, available on Apple, Spotify,
Speaker 2: and anywhere else you get your podcasts. Listen live weekday
Speaker 2: afternoons from two to five pm Eastern on Bloomberg dot com,
Speaker 2: the iHeartRadio app tune In, and the Bloomberg Business app.
Speaker 2: You can also watch us live every weekday on YouTube
Speaker 2: and always on the Bloomberg terminal