Speaker 1: This is Bloomberg Business Week. I'm Karl Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing
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Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on Bloomberg Radio, or watch us on
Speaker 1: YouTube search Bloomberg Global News. Well, the EU set to
Speaker 1: unveil a plan as soon as this week to jointly
Speaker 1: issue bonds on a potentially massive scale to finance energy
Speaker 1: and defense spending. As the block coops with the fallout
Speaker 1: from Russia's invasion of Ukraine. We know that there is
Speaker 1: a lot going on, and we thought we needed to
Speaker 1: get an update from someone who's been a great source
Speaker 1: for us here at Bloomberg. That's Roz Mathison, Executive editor
Speaker 1: for International Government at Bloomberg News. Roz joins us on
Speaker 1: the phone from London. Ros a lot of quick moving
Speaker 1: parts here, especially if we look at the way that
Speaker 1: we you know, we see that things are changing every day,
Speaker 1: talks on, talks off, in comments from President Zawinski as well.
Speaker 1: What's the most important thing that we need to focus
Speaker 1: on when it comes to the latest development in Russia's
Speaker 1: invasion of Ukraine. Well, in terms of the actual conflict itself,
Speaker 1: it's been relatively calm today. But what we're seeing is
Speaker 1: efforts by the Russian military to really regroup itself on
Speaker 1: the ground after being a bit bogged down, particularly in
Speaker 1: their effort to move towards the capital Kiev. And so
Speaker 1: what we're expecting as a result is an escalation in
Speaker 1: the aerial campaign against key cities in Ukraine. You can
Speaker 1: see that that shelling has continued unabated. Certainly you can
Speaker 1: imagine the Russian president is probably getting frustrated with how
Speaker 1: long it's taking to achieve what he would see as
Speaker 1: his goals on the ground, and that could lead the
Speaker 1: military to really pick up in terms of shelling, bombardment
Speaker 1: of cities, meeting to take key infrastructure, and certainly to
Speaker 1: get control of the railway networks in the country, which
Speaker 1: they struggled to do so far. So you can imagine
Speaker 1: we're going to see any escalation in their tactics in
Speaker 1: the coming days, a sense of frustration at what they
Speaker 1: see as their lack of progress so far. As a
Speaker 1: chance of talks between Ukraine and Russia, is that just
Speaker 1: off the table at this point. I know the Ukraine
Speaker 1: president says he's not ready to meet Vladimir Putin's demands,
Speaker 1: which include a rewrite of Ukraine's constitution to declare specific
Speaker 1: territories independent. So talks off the table at this point. Well,
Speaker 1: there have been lower level talks with lower level officials
Speaker 1: that have happened three times now. They've mostly focused on
Speaker 1: trying to get agreement on sea spars, humanitarian corridors to
Speaker 1: allow civilians who are living in the areas where the
Speaker 1: fighting is the worst safe passage to leave, and we've
Speaker 1: seen at least four efforts so far to get those
Speaker 1: corridors going without success. They tend to fall apart within hours,
Speaker 1: and Russian Ukraine they both say they will continue to talk,
Speaker 1: but there's no set date for a further meeting on
Speaker 1: that front. What's interesting, of course, that the Russian Ukraine
Speaker 1: foreign ministers are both going to be in Turkey on
Speaker 1: Thursday and we'll be crossing paths there at least in
Speaker 1: some kind of interaction, and that would be the highest
Speaker 1: level conversation between officials of the country since the war began.
Speaker 1: So that's one to watch very closely in terms of
Speaker 1: any tangible conversations about what kind of things could come
Speaker 1: on the table, perhaps as a solution to the conflict.
Speaker 1: Her To that end, I'm wondering about some Zelinsky's comments
Speaker 1: to ABC News about NATO. Here's what he said in
Speaker 1: an interview with ABC News. Quote regarding NATO, I have
Speaker 1: cooled down regarding this question a long time ago after
Speaker 1: we understood that NATO is not prepared to accept Ukraine.
Speaker 1: I never wanted to be a country that is begging
Speaker 1: something on its knees, and we're not going to be
Speaker 1: that country, and I don't want to be that president.
Speaker 1: Is that indication to you that, uh, perhaps Ukraine could
Speaker 1: uh see to some of Russia's demands, which include not
Speaker 1: becoming part of NATO. You can certain see a lot
Speaker 1: of pressure coming on the Ukrainian president to to see
Speaker 1: some ground here, to avoid perhaps even an escalation of
Speaker 1: fighting and conflict and the horrible toll that takes on
Speaker 1: his people. You can also see a very strong sense
Speaker 1: of frustration that NATO. He's called repeatedly for a no
Speaker 1: fly zone over Ukraine, which is very difficult to do, impossible,
Speaker 1: NATO says, because it would would draw it into the
Speaker 1: conflict proper against Russia. The reality is that NATO has
Speaker 1: been very clear that while it has an open door policy,
Speaker 1: there's no chance of Ukraine joining in the foreseeable future.
Speaker 1: And by that we're talking, you know, years, possibly longer.
Speaker 1: The obstacles are very severe for becoming a member. And
Speaker 1: that's more an expression really a frustration at that rather
Speaker 1: than perhaps Lynsky's saying that he's abandoning his desire to
Speaker 1: join NATO. It's more he's angry, it's clear at the alliance,
Speaker 1: and he's expressing his frustration in those comments. Here is
Speaker 1: one thing I think you know in this war, in
Speaker 1: this Russian invasion of Ukraine, we are learning about Ukraine,
Speaker 1: whether it's I T, whether it's wheat, whether it's semiconductors,
Speaker 1: Russia of course, the energy needs and more, we're understanding
Speaker 1: more about the global economy and where we get stuff from.
Speaker 1: If the EU, as I mentioned on the lead in
Speaker 1: that they're getting ready to unveil a plan to jointly
Speaker 1: issue bonds, and this is to help it, you know,
Speaker 1: scale finance, energy and defense spending right as it tries
Speaker 1: to really figure out its way forward and maybe not
Speaker 1: be so dependent on Russia. If indeed that moves forward
Speaker 1: and there's no going back in terms of relationships with Russia,
Speaker 1: how crushing will that be for Russia in terms of
Speaker 1: its economic might, if you will, and just kind of
Speaker 1: about forty seconds, well, you can see the extensive pressure
Speaker 1: that's coming on the Russian economy. These are unprecedented sanctions
Speaker 1: across the board, targeting all sectors of the economy and
Speaker 1: also particularly the Russian consumer. But what you're also seeing
Speaker 1: is very nascent efforts by Russia to get around those
Speaker 1: sanctions by using China perhaps for the payment systems, by
Speaker 1: selling its gas and oil to other countries that be
Speaker 1: willing to take it. So you can't discount the fact
Speaker 1: that Russia might find some ways through to poke holes
Speaker 1: with these sanctions and trying to find some resilience in
Speaker 1: its economy, although admittedly right now it's under extreme pressure.
Speaker 1: All Right, we're gonna leave it there. Thank you so much,
Speaker 1: really appreciate it. Rosalind Matheson, Executive editor for International Government
Speaker 1: at Bloomberg News, on the phone from London, her reporting
Speaker 1: and many of our team who are covering it day in,
Speaker 1: day out, our in, our out, just keeping us up
Speaker 1: to date on what's going on. Yeah, we certainly appreciate that.
Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. All Right, the
Speaker 1: new issue of Bloomberg business Week magazine do out later
Speaker 1: this week. Ongoing coverage, of course, of the Russian invasion
Speaker 1: of Ukraine and how Ukraine is struggling to get war
Speaker 1: bonds to retail investors, not just domestic ones, but out
Speaker 1: more broadly. The story by Priscilla as A Vedo roacha
Speaker 1: credit reporter for Bloomberg News, who joined this now on
Speaker 1: the phone from London. Carol, as you mentioned, this story
Speaker 1: featured in the upcoming issue of Business Week magazine, though
Speaker 1: you can read it now like I did on the
Speaker 1: Bloomberg terminal also at Bloomberg dot com slash business Week. Priscilla,
Speaker 1: let's talk a little bit about about war bonds. Um Initially, Uh,
Speaker 1: this is this is the type of of product that
Speaker 1: is not available to the everyday investor, right, this is
Speaker 1: available to institutions and and and larger pension funds. Um
Speaker 1: is that something that Ukrainians can actually change and pretty
Speaker 1: easily so retail investors can have access to these Hi, Tim,
Speaker 1: Hi Carol, goodnight or a good afternoon there, thank you
Speaker 1: for having me. Uh So, basically it depends war bonds
Speaker 1: can be sold to different investors for different purposes, right,
Speaker 1: Like we've seen that in the U S serving World
Speaker 1: War One, they sold bonds that actually the people could
Speaker 1: buy to support the war efforts. But in the particular
Speaker 1: case of Ukraine is a bit treatier because what the
Speaker 1: sovereign it. They took the regular Tuesday auctions loot and
Speaker 1: they turned and turned it into like a military bond
Speaker 1: fundraising effort. So they used the mechanism that they already
Speaker 1: had in place, which was dedicated to institutional investors, central
Speaker 1: bank extension funds and more sophisticated as like asset managers,
Speaker 1: and use these vehicle to put together this war effort fundraising. Well,
Speaker 1: and let's just remind everybody an auction did happened today
Speaker 1: and Ukraine raising twenty nine million in a second war
Speaker 1: bond auction UH, and they are using this U to
Speaker 1: fund its military UH and resistance to Russia's invasion. According
Speaker 1: to the country's Ministry of Finance, what's interesting, UM I
Speaker 1: was trying to find it. How difficult though is it
Speaker 1: for it to go beyond the domestic home front? In
Speaker 1: terms of selling, it is very hard because you need
Speaker 1: to put a lot of legal protection in place, So
Speaker 1: you need to to put the prospect us together for
Speaker 1: those who are not very familiar, prospectives is a legal
Speaker 1: document that will detail the risks of the bond, the
Speaker 1: conditions in terms of payments. Who are the banks involved
Speaker 1: in everything? So UH, for them to do such a
Speaker 1: thing under war is extremely hard because the conditions are
Speaker 1: not very favorable for them, not favorable at all. And
Speaker 1: it's something that also requires being fully integrated in the
Speaker 1: market right right well, But in terms of international demand,
Speaker 1: I do think about international investors who are maybe looking
Speaker 1: to lend a helping hand in some way. There is
Speaker 1: the demand for it. There is demand, and you could
Speaker 1: go like on the Ministry of Finance Twitter page or
Speaker 1: in a LinkedIn page and you see tons of comments
Speaker 1: of people saying how can I buye those bonds from
Speaker 1: the US, from the UK and things like that. But
Speaker 1: right now, because those are domestic bonds and they're denominated
Speaker 1: in local currency, they're not in US dollars or euro
Speaker 1: you have to go to the primary dealer. The primary
Speaker 1: dealer is the bank that the solvers like. It's um
Speaker 1: it's a bank that works for the sovereign and sells
Speaker 1: that to investors. In the case of Ukraine, there are
Speaker 1: specific eleven banks. They're the sovereign primary dealers, and those
Speaker 1: banks sell to investors, so they do the deals. So
Speaker 1: it's meet, Priscilla, I want to buy those bonds, I
Speaker 1: need to either a call broker or a private bank
Speaker 1: or someone who has a connection to the trading desk
Speaker 1: of one of those banks that could place the order
Speaker 1: on my behalf. So it's not something straightforward, it's something
Speaker 1: for very sophisticated investors. Now, at what point, though, could
Speaker 1: UH an investor actually get access to this through a
Speaker 1: retail trading platform if ever, in this case, I don't
Speaker 1: think so. I don't think it's possible. I think they
Speaker 1: need to develop a new product that would allow retail
Speaker 1: and the stors to participate. They are working on it.
Speaker 1: They're indicating that they're trying to do their best, but
Speaker 1: under the circumstances they are not fully integrated to international
Speaker 1: capital markets, right, and they used that they current offer
Speaker 1: is not in line to all the emerging markets. And
Speaker 1: they also had their their sovereign ratings downgraded because of
Speaker 1: the war and the risks that the war represent to
Speaker 1: the sovereignty of the country. That's a really good point, right,
Speaker 1: Like you think about it, like what happens on the
Speaker 1: other side. So if you know, international investors get in,
Speaker 1: our investors get in. We don't unfortunately know the outcome.
Speaker 1: Then it could be that Ukraine remains independent and a
Speaker 1: sovereign nation right with its own debt markets and sovereign markets,
Speaker 1: or if it becomes part of Russia. T him like
Speaker 1: it's a it's a different story potentially, what would that story?
Speaker 1: I mean, you know, I don't want you to speculate, though, Priscilla,
Speaker 1: but this is this is kind of what's priced in
Speaker 1: in terms of coupon though, right that risk? Yes, that's right.
Speaker 1: So if Ukraine, if the outcome of the war, you
Speaker 1: end up with a most call backed government in kievs uh,
Speaker 1: then you have questions like will this government honor its
Speaker 1: commitments to international creditors. Uh, it's just going to be
Speaker 1: sanctioned by US, the UK, the European Union. So you
Speaker 1: have all those questions that you need to assess when
Speaker 1: you get involved into something like that. UM, should we
Speaker 1: anticipate that there will be another raise by Ukraine, another auction?
Speaker 1: It is hard to say. They do conduct auctions every Tuesday.
Speaker 1: But by saying that they will conduct more options to
Speaker 1: fund the military is saying that they believe that this
Speaker 1: war is going to go ahead for further weeks, so
Speaker 1: they will continue with their fundraising efforts as a sovereign nation.
Speaker 1: But if those ponds are going to be dedicated to
Speaker 1: the military or if they're going to be just general
Speaker 1: budgetary purposes, that is a different story and we have
Speaker 1: to wait and see, like closer to the end of
Speaker 1: the week. Well, it's interesting, uh, and certainly something we're tracking,
Speaker 1: and it's a result of the current situation that war
Speaker 1: that we are in. UM really appreciate it. A big
Speaker 1: thank you to Priscilla as A Vedo Roacheck, credit reporter
Speaker 1: for Bloomberg News. Check out her story. It's featuring the
Speaker 1: upcoming issue of Bloomberg Business Week. You can read it
Speaker 1: now on the Bloomberg terminal also at Bloomberg dot com
Speaker 1: slash business Week. You're listening to Bloomberg Business Week with
Speaker 1: Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio.
Speaker 1: Chairs of PETC. They are rallying. I'm meant to bring
Speaker 1: it up nine point four percent. Thank you very much,
Speaker 1: Tim Stanovic. They are up more than nine percent, company
Speaker 1: beating on both the top and bottom line for the
Speaker 1: last quarter and upping its fiscal year outlook for adjusted
Speaker 1: earnings and revenues. Uh. Pets all the rage during the pandemic,
Speaker 1: and they are apparently so too post pandemic. I get
Speaker 1: a second. Dogs, you're like, you know, the walking example
Speaker 1: of this. Uh. It's always great to speak with Ron Coglan,
Speaker 1: the CEO of pet He's with us once again in
Speaker 1: the Blueberrick Interactive Broker Studio. Ron. Good to have you
Speaker 1: back in New York. Have you back in person with us? Um,
Speaker 1: it's been a quarter. How are you. It's great to
Speaker 1: be here. I am really really good. Uh and um,
Speaker 1: this is more importantly in my thirteen year old Yummy dog.
Speaker 1: Yummy is really good and business is really good we taught.
Speaker 1: We announced the seventh consecutive quarter of double digit growth.
Speaker 1: Of the fifty top retailers, there's only three companies have
Speaker 1: done seven consecutive quarters of double digit grow, So something
Speaker 1: we're really proud of. With margin expansion, how are you
Speaker 1: doing it? Yeah, we're executing against our strategy. So you know,
Speaker 1: I'm coming upon my fourth year and we made a
Speaker 1: big bet. We made a big bet that we were
Speaker 1: going to develop an ecosystem of that's the full offering
Speaker 1: that pet parents want. So we have our own vets,
Speaker 1: we have grooming, we have training, we have supplies, we
Speaker 1: have food, and we do it in stores. We also
Speaker 1: do it digitally, and that was a big bet versus
Speaker 1: trying to be expert at one part of the thing,
Speaker 1: which is what basically everyone else does. Um parents say
Speaker 1: that's what they want. They want a partner to manage
Speaker 1: their pet libs. I'm sure it's not easy for you.
Speaker 1: I used to go to one place for a vet,
Speaker 1: one place for grooming, one place where food. My hunches.
Speaker 1: You probably do that right now, kind of still do.
Speaker 1: But I do a lot online in terms of products
Speaker 1: like and that simplifies my world. Yeah, but if you
Speaker 1: could do it all in one place, and then that
Speaker 1: company knows you and knows your data, and the groomer
Speaker 1: knows the same thing that the vet knows. We take
Speaker 1: better care of you. And so that strategy is working.
Speaker 1: The second thing that's working is our omni channel strategy. UM.
Speaker 1: Eight percent of our online orders get fulfilled through a
Speaker 1: pet care centers we call the micro distribution centers. That
Speaker 1: means there's faster the customer and lower costs. Does that
Speaker 1: mean they walk into or no, it's separate distribution center.
Speaker 1: So there's three. It's your local, your local pet co. Right,
Speaker 1: it had three different versions. One we might ship from
Speaker 1: that store to you if you order it online too,
Speaker 1: you could same day delivery what you can't do online.
Speaker 1: Or three you might go and pick it up if
Speaker 1: you're short on order. Oh I need to get food
Speaker 1: and on my way home and you you know, bopus,
Speaker 1: it's just like you you order a head on your
Speaker 1: Starbucks as an example. UM, So that's really working for us.
Speaker 1: And then our vet business is working. And we had
Speaker 1: a big announcement last week. We we had a joint
Speaker 1: venture with a VET partner and we bought them out.
Speaker 1: Last week we announced it and so we're bringing eight
Speaker 1: hundred veterinary professionals into our system. And one of the
Speaker 1: biggest questions I get from investors is can you hire
Speaker 1: enough vets? And you might have hired my vet who
Speaker 1: we loved and adored and he became part of a
Speaker 1: bigger practice and then is gone. Our investors seeing the
Speaker 1: story though, though are they hearing this story? Because the
Speaker 1: stock is doing well today, but it did hit a
Speaker 1: hit a record low in late February. It's down thirty
Speaker 1: percent from its highs of last year. What are investors
Speaker 1: missing here? Yeah? I mean we got caught in some
Speaker 1: of the market downturn um that that happened, and we
Speaker 1: just need to prove it over time. And that's why
Speaker 1: I'm so proud of the seven quarters of a double
Speaker 1: digit growth with margin expansion. And also our bullishists was
Speaker 1: evidenced by our guide, which was above consensus. There were
Speaker 1: people who questioned whether we could grow in the second
Speaker 1: half of the year. We did so at double digit rate.
Speaker 1: There are people who question whether we can lap next year. Uh,
Speaker 1: And we showed a big you know, a nice guide
Speaker 1: going forward that people appreciate, and I think that's why
Speaker 1: the stock is responding in addition to the fact that
Speaker 1: I think that there is a premium for companies that
Speaker 1: can execute in these times, whether it's the labor issues, um,
Speaker 1: whether it's the different economic issues. People who can execute
Speaker 1: are getting a premium. Right now, what second of your
Speaker 1: business sees the biggest growth? Because you talked about a
Speaker 1: couple of different things, and I'm you know, there's a channel,
Speaker 1: there's digital, there's in the store, there's you know, the
Speaker 1: vet services they're selling, pats. What is it? What is
Speaker 1: it that really juices the top and bottom line and profitability? Uh?
Speaker 1: I love all my kids and uh that's not my
Speaker 1: love a little bit more. Um. The truth is, are
Speaker 1: all growing. But if you look at our digital business, yeah,
Speaker 1: we grew a hundred and forty on a two year basis.
Speaker 1: We more than doubled our digital business in the last
Speaker 1: two years. I mean that's astounding. How much How often
Speaker 1: do you more than double the business that already had
Speaker 1: scale in two years? We did last quarter. We picked
Speaker 1: up eight hundred thousand customers this past quarter. So it's
Speaker 1: truly remarkable. What's going on? So how much of revenues
Speaker 1: is digital? Purely digital? Digital is between fift and how
Speaker 1: much of somebody who is digital then walked into store, Like,
Speaker 1: what are you looking for when you're your omni channel?
Speaker 1: I was just talking to Chippotle their omni channel, right,
Speaker 1: they have chippot Land. You're digital only, you can go
Speaker 1: to the store, you can use the app. There's all
Speaker 1: these different things. How many like how many people are
Speaker 1: going to the stores buying online? Like you want somebody
Speaker 1: who's all in. That's the way the world is going.
Speaker 1: So if I go through the recent sequence two thousand
Speaker 1: twenty happened and everyone went online, right, even my father
Speaker 1: who loves going to stores, all of a sudden became
Speaker 1: an online customer for the first time. Then into one
Speaker 1: one people thought maybe they won't come back. They came
Speaker 1: back to our stores in droves and more and more.
Speaker 1: It is this omni channel customer. We call it retail
Speaker 1: three dita where you really bring this promise of omni
Speaker 1: channel that we've all been talking about for years together,
Speaker 1: not only for that experience, but also as fulfillment centers.
Speaker 1: You hear Target talking about using their targets as fulfillment centers,
Speaker 1: and we're very killer strategy. Got me to go to
Speaker 1: a Target store in a long time, very very and
Speaker 1: we truly believe we're one of the retail three ditto
Speaker 1: leaders in defining that. Combined with the services that we have,
Speaker 1: combined with the fact that we make a difference in
Speaker 1: the communities that we live in or operate in, to us,
Speaker 1: we're one of the definitional companies of retail three dita.
Speaker 1: Where are you seeing inflationary pressure beyond what every other
Speaker 1: business talks about transportation and wages? I mean, is it
Speaker 1: pet food going to get so much more expensive because
Speaker 1: of the rise in commodity costs, Fertilizer getting more expensive,
Speaker 1: meat getting more expensive, grain being shut off from so
Speaker 1: much of the world with Russia's invasion of Ukraine. Where
Speaker 1: concerned about inflationary pressure? Yeah? You never like to see
Speaker 1: inflationary pressure come at you as a retailer, and you
Speaker 1: don't like to pass it through. UM. There's been quite
Speaker 1: a bit in UM. We have the highest end customer
Speaker 1: in the category UM, so we've been able to pass
Speaker 1: that on. But at the same time, we're making sure
Speaker 1: that we provide options for customers. So whether that you know,
Speaker 1: all the way from the top end of fresh frozen
Speaker 1: too high end kibble to medium price wholehearted own brand
Speaker 1: UM to our vital care program that we actually announce
Speaker 1: an enhancement to today where for nineteen dollars a month
Speaker 1: you can get you know, grooming veterinary discounts on products
Speaker 1: and you can save two dollars. So yes, we're having
Speaker 1: to pass it through, but we're also coming up with
Speaker 1: options and ways for customers to save to offset some
Speaker 1: of that, so you're able to maintain margins. We're able to.
Speaker 1: We actually we we had sequential improvement in our margins
Speaker 1: this past quarter, and that can continue with those inflationary pressures.
Speaker 1: Whether it's food, whether it's labor, I mean trust, we're
Speaker 1: talking about energy, and that's a throughput for everything. So
Speaker 1: the guide that we provided had EBITDA margin expansion. We
Speaker 1: had margin expansion pretty much every quarter. How do you
Speaker 1: feel about the second half? And I think about the
Speaker 1: conversation we have with Gina Martin Adams earlier who covers
Speaker 1: the markets, and she said another month of maybe the
Speaker 1: war and things that I start to rethink, um, how
Speaker 1: the second half looks. In terms of the equity front.
Speaker 1: We have yet to hear companies taking down the revenue
Speaker 1: numbers you raise them for the year, you feel really
Speaker 1: confident or is there something out there that says this
Speaker 1: could change. You know, we haven't no excuse mentality in
Speaker 1: our companies. So we took labor hits, we took supply
Speaker 1: chain hits, and we still delivered eighteen percent growth on
Speaker 1: the year and four growth on the quarter. So yes,
Speaker 1: we're we take those, but at the same time, we
Speaker 1: have massive addressable market opportunities. We are just moving into
Speaker 1: the r X eleven billion dollar r X business. We
Speaker 1: grew on the quarter. That's all upside that. It really
Speaker 1: doesn't matter how the market does. That's share capture for us.
Speaker 1: We have a thirty billion dollar vet business that we're
Speaker 1: still young in but we're growing rapidly or services grow,
Speaker 1: So we have such tam opportunities for us that the
Speaker 1: market dynamics or something we have to navigate. But we're
Speaker 1: really masters of our own destiny. If we controlled the market,
Speaker 1: I'd really be worried about that, but we have such
Speaker 1: opportunities ahead of us. I want to hear more about
Speaker 1: the vet business and how you plan to grow the
Speaker 1: that business. Because you call them pet parents. I've been
Speaker 1: a pet parent. Carol is a pet parent. Uh and
Speaker 1: we spend, especially when it comes to medical services for animals.
Speaker 1: How do you grow the insurance business and the business
Speaker 1: that's business. Yeah, So first last week, I'm thinking I
Speaker 1: wish I had insurance by the way from my pet.
Speaker 1: So here was the progression of us into that business.
Speaker 1: We did a partnership with a very well established company
Speaker 1: called Pathway for a thrive joint ventures in our stores,
Speaker 1: uh and it worked well. Then we started launching our
Speaker 1: own vets and we learned how to operate our own
Speaker 1: vests within this is within only within our pet care center.
Speaker 1: So we like the financials of the VET, but we
Speaker 1: like the financials with a total box even better. We
Speaker 1: have a four to five point merchandise sales lift when
Speaker 1: we put a VET in one of our stores. So
Speaker 1: we learned how to operate them. So then we got
Speaker 1: in a conversation with Pathway and we just culminated a
Speaker 1: purchase of those joint ventures. So now it's all under
Speaker 1: one brand, vet Go Total Care. It's all one operational playbook.
Speaker 1: We have higher throughput in our own own veterinarias than
Speaker 1: in our joint venture vets, so that is a huge
Speaker 1: You think about eight hundred vetinary professionals. It just became
Speaker 1: part of the pet Go family last week. That's a
Speaker 1: huge boost to our system. And what we said is
Speaker 1: we'll do seventy a year after that acquisition integration, seventy
Speaker 1: new vets a year. That's a lot of growth. And
Speaker 1: I get where where that growth can come from. That's
Speaker 1: a lot of in terms of initiatives. Just got about
Speaker 1: thirty seconds. Here is the plan to keep it all together?
Speaker 1: Or as you grow, could you ultimately spin out some businesses.
Speaker 1: The explicit strategy is an integrated ecosystem of customers, one
Speaker 1: on one stop shop. Pet Go is the only company
Speaker 1: that can do it. All right, I'm gonna hold it
Speaker 1: to it, or we'll check back with you. Get on that. Um.
Speaker 1: Always fun to check in with you. Ron, Thank you
Speaker 1: so much. When Coglan he's the chairman and CEO Petco
Speaker 1: here in our studio, I'm roam. Yeah, but you let
Speaker 1: me drive, No, no, no, all right, please, I'll do
Speaker 1: the dravels. I want to drive. It's a good question.
Speaker 1: D This is the drive to the clothes on Bluebird Radio.
Speaker 1: All right, just about ten minutes left in today's trading session.
Speaker 1: That means it is time or the drive to the
Speaker 1: clothes and with us is Stephanie Pierce, she CEO of
Speaker 1: Dry Fast Melon and E t F A b n
Speaker 1: Y Melon Investment Management, and she's on the phone from
Speaker 1: Boston this in what has been another volatile day with
Speaker 1: big swings, whether it's crude oil, whether it's the SNP,
Speaker 1: whether it's UH the NASDAC. We continue to see a
Speaker 1: lot of volatility, Stephanie. Great to have you here. The
Speaker 1: market environment, it is a tough one to call. How
Speaker 1: do you make calls though for your investors in this
Speaker 1: environment and where do you go? Sure, it is a
Speaker 1: difficult environment. And for me and our team sitting in
Speaker 1: the index and cash businesses, we are really at the
Speaker 1: tip of the sphere of some of the changes that
Speaker 1: are taking place. Just as an example, you know we've
Speaker 1: seen in the index space most of the major index
Speaker 1: providers have started the process or end of the process
Speaker 1: of removing Russian securities from their benchmarks altogether and have
Speaker 1: reclassified the region from an emerging market to a quote
Speaker 1: unclassified status. So as you think about what that means
Speaker 1: in terms of what we need to do for clients
Speaker 1: and in portfolios to make those adjustments, it's you know,
Speaker 1: it's it's tricky. It's these are tricky times, right. Similarly,
Speaker 1: in the cash markets, you know, we're seeing a lot
Speaker 1: of clients allocating and moving cash around and we just
Speaker 1: have to work with them. You know. One of the
Speaker 1: things that you know, we are very proud of us.
Speaker 1: We have a lot of tenure in our team, and
Speaker 1: we you know, we're very comfortable making these moves and
Speaker 1: these all the markets. As you said, it is, uh,
Speaker 1: these are tricky time. It's interesting and I love that
Speaker 1: you say that there's a lot of tenure out there
Speaker 1: because I do think about there's a point where we
Speaker 1: need to draw on people who have seen erratic market cycles, right,
Speaker 1: and there's a fair amount of us who have seen
Speaker 1: the ups and downs of the markets different stress points
Speaker 1: to a political or otherwise. I do wonder, though, how
Speaker 1: do you look at Russia. I'm trying to assess for
Speaker 1: our audience that when a Coca Cola or McDonald says
Speaker 1: we're temporarily closing something down, or when M. S c I,
Speaker 1: you know, talks about removing right Russia from indices, is
Speaker 1: this something that's a longer term play here or a
Speaker 1: longer term thing that as investors need to consider. It's
Speaker 1: not something that maybe changes again in another month or
Speaker 1: six months. Look, I mean, I think, you know, the
Speaker 1: truth is nobody knows the answer to that question. So
Speaker 1: it could slip. So is that are you saying that
Speaker 1: that it could flip quickly if this situation, if you know, stops. Look,
Speaker 1: I think I think index vendors have a responsibility to
Speaker 1: be prudent in the changes that they make, which are
Speaker 1: typically based on a set of rules, and they're going
Speaker 1: to follow those rules, and that's what we're seeing. Took
Speaker 1: a week or so for that to occur, but we're
Speaker 1: now seeing them follow you know, that the rules that
Speaker 1: and I think that if things were to change again
Speaker 1: that whether it be Russia or any other country or
Speaker 1: any other segment of the market, they would follow those rules.
Speaker 1: And that's I think what gives investors um that work
Speaker 1: with us and that we invest for comfort in you know,
Speaker 1: passive management, is that there is a set of rules.
Speaker 1: There are you know, human beings making those rules, and
Speaker 1: is understandable and transparent. So from that perspective, I don't
Speaker 1: think this is something that changes quickly overnight, but if
Speaker 1: it does, it would be based on a set of
Speaker 1: rules that are explainable and understandable to our clients. Stephanie,
Speaker 1: what are you What are you hearing from your clients
Speaker 1: right now? Do they are they actually reaching out about
Speaker 1: the world about Russia's invasion of Ukraine? Are they do
Speaker 1: they want to make sure that there they don't have
Speaker 1: money invested in Russia? What are you hearing from them? Sure,
Speaker 1: we absolutely are well engaged with our clients. As an
Speaker 1: interesting anecdote, one of the things that we have talked
Speaker 1: to them about is if you look at the e
Speaker 1: t F portfolios that we manage, we've seen not not
Speaker 1: dissimilar from the March markets sell off, that e t
Speaker 1: fs have once again proved to be a source of
Speaker 1: price discovery and liquidity for investors during this event where
Speaker 1: the underlying securities read or not treating or we're delisting
Speaker 1: or things like that, and so for investors in emerging
Speaker 1: market strategies, particually, in the t F, we've seen the
Speaker 1: vehicles continue to trade on the US Exchange while some
Speaker 1: of the underlying Russian markets and securities have not been liquids.
Speaker 1: So that's a conversation that we continue to have its ets.
Speaker 1: Investors that we've worked with to understand that what was
Speaker 1: once seen as kind of a you know, a flaw
Speaker 1: of the vehicle, meaning discounts and premium on these vehicles,
Speaker 1: that it's actually a feature right, that it may be
Speaker 1: the only place you can find liquidity and understand where
Speaker 1: prices will settle out is in the E T F
Speaker 1: vehicle when somebody underlying markets and securities are not not
Speaker 1: particularly liquids, you know, speaking at kind of the world
Speaker 1: being at crossroads over a lot of stuff right now,
Speaker 1: and certainly the investing world as we watch that Russian
Speaker 1: invasion of Ukraine. E s G finding itself across roads
Speaker 1: after investing in Putin's Russia. This was the headline of
Speaker 1: a story basically sustainable funds are holding Russian bonds as
Speaker 1: well shares of companies like state run gas Prom. It's
Speaker 1: kind of a moment of reckoning where we are increasingly
Speaker 1: seeing E s G being looked at um as like, wait,
Speaker 1: is it really E s G? And I think about
Speaker 1: some of the work you guys are doing also when
Speaker 1: it comes to diversity and inclusivity. Um Melon's Pathway Inclusive
Speaker 1: Investment study that looks at men investing, women investing on
Speaker 1: this international Women's day. What are you guys finding. It
Speaker 1: is a fascinating topic, and I would say one thing.
Speaker 1: We have just published probably one of the most expansive
Speaker 1: global studies on women investment behavior event particularly why women
Speaker 1: do not invest at the same rate as men. And
Speaker 1: if I could offer you one conclusion, it is that
Speaker 1: now is absolutely the time to create a more inclusive
Speaker 1: investment world for generations today and generations to come. In
Speaker 1: this report, we found that if women were to invest
Speaker 1: at the same rate as men, it could result in
Speaker 1: an additional three point two trillion dollars of capital being
Speaker 1: invested in globally, much of which would, as he said,
Speaker 1: low toward investments with a positive impact on society and
Speaker 1: the environment, which is really the proclivity or or way
Speaker 1: in which women like to invest. And so the eight
Speaker 1: thousand women and men that we surveyed, we found that
Speaker 1: over seventy of the women under thirty said they would
Speaker 1: invest in companies that reflected their personal values, and over
Speaker 1: half of the women we surveyed said they would invest
Speaker 1: if there was a clear purpose for good. So I
Speaker 1: think the takeaway is women want to invest both for
Speaker 1: financial return where they could do well, but also by
Speaker 1: doing good so how do you get more women to
Speaker 1: invest in we just have thirty seconds left. Sure, very quickly,
Speaker 1: we found three hurdles to doing that. One is women
Speaker 1: feel that they need at very high level of disposable
Speaker 1: income to start investing in the US. That was six
Speaker 1: thousand dollars a month or seventy two thousand dollars a year.
Speaker 1: The second is that and related to the first, is
Speaker 1: that women see investing is inherently high risk, and very
Speaker 1: few women see themselves as high risk takers. And then
Speaker 1: the third and which is probably related to the first two,
Speaker 1: is the way the industry engaged with women probably needs
Speaker 1: some change, and that is really our call to action. Today,
Speaker 1: most asset managers gear their product solutions and the benefits
Speaker 1: they talk about towards men as the customers, and that
Speaker 1: was part of the survey, and so our call to
Speaker 1: action is both as an investment management firm and everybody
Speaker 1: else thought there really needs to start to change the
Speaker 1: way we engage the products and services we offer and
Speaker 1: how we talk about them to women. Know your audience, no,
Speaker 1: your complete audience that's out there, or your potential customer.
Speaker 1: Stephanie Pierce, thank you so much, Chief Executive Officer of
Speaker 1: Dreyfus mel and An E. T. S at b and
Speaker 1: Y mill And Investment Management on the phone from Boston.
Speaker 1: Thanks for listening to Bloomberg Business Week. Download the podcast
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