Bloomberg Businessweek Weekend - August 23rd, 2024

This is Bloomberg business Week Inside from the reporters and editors who bring you America's most trusted business magazine, plus global business finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. This past week, politics Powell, and a pulse on the consumer. As we often do, we have our own takes on it all, plus a story on luminous lows and the rise of bathroom selfies that to come a bit later on. Coming up this hour, climate change, which popped up a little bit along the campaign trail and at the DNC

You know, a traditional hybrid, like the Toyota Prius that's been around for over twenty five years. It's primarily run by the internal combustion engine. That's what turns the wheels, and then the car's electrical system and breaking Kinnecticut. Energy from breaking recharges the battery that's also in a hybrid that supplements the internal combustion engine. But the driver in a traditional hybrid is still the internal combustion engine and

However, there is.

A small internal combustion engine on board that is not connected to the wheels. It's only connected to the battery and it recharges the battery. So if you're driving on a long trip, you know, three hundred miles or more, you're going on your vacation, and you know the battery is running down, the internal combustion engine automatically clicks on

This sounds like Okay, Holy Grail found this sounds brilliant, is it not.

It is a very smart solution, and it especially addresses the things that have become roadblocks for pure electric vehicles.

Range anxiety.

We've all heard about range anxiety, right, that's a big issue in America. It's a big country with not all how to charging stations yet and price because these e revs don't require as big a battery because you have that internal combustion engine backup, so the battery is about half the size. Well, that lops four thousand dollars off the price of the car compared to a pure ev OK.

Brilliant, brilliant, brilliant. Yeah, you might be excited about it, but I know some folks who aren't. The Sierra Club, for example, as you point out in your.

Piece, so not so great for the environment.

They're saying it doesn't go far enough.

They want they want zero emission vehicles. They don't consider the Toyota Prius a green vehicle anymore. They believe that if you're not zero emission, you're not helping to solve climate change.

Toyota, by the way, has a very different point of view on that.

And you know, when you think about what goes on with these vehicles, they are mostly running in electric power. That means they actually emit fewer you know, global warming gases carbon dioxide than a Prius does.

So you know it is no.

It is not a pure ev not a zero emission vehicle, and that is the issue in Sierra Club has.

But it goes a lot farther than traditional hybrids do.

Right now, what is what are the emissions on the what are they called erevs, e reps? What are the emissions on them?

Keith, Well, Carol, it kind of depends on how often that internal combustion engine goes on. How often you take a long enough trip to nearly drain the battery and the engine has to kick on.

So that's pretty rare.

I mean, what automakers tell us is, you know, the average you know, daily commute for Americans is under sixty miles. So you know, when you have a seven hundred mile range on your car, you're not going to get to that internal combustion engine need until deep into that range. So you know this, Jim Farley, the CEO of Bard Motor Companies, these cars are running on nine electricity, so yeah, you know that's far fewer commissions than you would get from a hundred.

Hey, Keith, help me know what I'm doing right now better than what you are doing him right now?

What my super real?

Sure?

Just saying same with me? Go ahead.

Still got nowhere to charge in New York City, like you know, parking.

On the streets.

But that's it's a little bit of a niche issue that only affects New Yorkers, and New Yorkers normally have cars anyway.

Addresses that, I know you have a question, but that would address that the city dwellers, the apartment dwellers who don't have a garage charger overnight, you know, they they don't have to be plugged in every night.

I love it.

Cars go for a very long distance.

Before I ask you how I get one, which is a long answer because it involves many years moving. I'm curious about efficiency, and you know, when that gas motor does kick on to charge the battery. We think of efficiency when it comes to internal combustion engines. Here is miles per gallon. How many miles per gallon in battery life do you get when that gas engine kicks on to charge the battery.

Yeah, I don't know the answer to that question, Tim, it's a good one, but again it's it depends on getting to that point where you need the gas engine to click on.

I talked to one person for the story who was over in.

China and wrote around with a friend who had an era, you know, for the entire time he was there, and they drove all over the place and the gas engine never came out.

It's amazing.

I think that's pretty cool.

All right, So here's the question, Carol, hurry, because I got another one. How do you get one? You got to go to China for now, right.

A moved to China.

But but they are coming. The first one will arrive in the US next year is Stilantis, you know, the Chrysler parent company that also makes Jeep and Ram pickup trucks. As an E rev version of its Ram fifteen hundred pickup truck. They're going to call it the Ram Trucks.

It is such a picker truck kind of exactly, no problem there, anyway, go ahead, good with the car seats to do for the kids.

So Stilantis says, the RAM charger will have a driving range of six hundred and ninety miles, And they say it's being built in their words, to pull in an entire skeptical demographic into the electric age, because this seems to be the answer to mainstream buyers concerns about electric vehicles.

You know what I love in your story. You say America's seat of the market for E revs to the Chinese, just as it did a decade ago with battery technology, which China now dominates. I just think about the mistakes that maybe we make as a country right in terms of thinking about the technology that we need to be focusing on. And I do wonder ken the US. Will the US catch up? Is this the way really forward?

It's an excellent point. Carol.

General Motors actually pioneered E revs fifteen years ago.

With the Chevy Volt.

I don't know if you remember this car, but it was a small sedan that ran primarily on battery power and had an onboard internal combustion engine to recharge the battery. They did that, it didn't sell that well. It was expensive to make, so they lost money on every car they sold, and they eventually pulled the plug in twenty nineteen as they were moving away from hybrid like vehicles

That they say is coming yet. Some of this could be related to regulation.

It's not clear yet how the US regulators will treat it. It probably won't get the same kind of benefits that a pure electric vehicle will, you know, the seventy five hundred.

Dollars tax credit and so forth.

Yeah, so there's a little reluctance from US automakers to feel these things.

Yeah, I do wonder though, something like this how it might move people to actually say, oh, I can get that. That makes more sense to me. Having said that, you understand this industry so well and the cycles and the challenges and the move that we've seen over the last few years into evs in a big way. Do you think this is what we will ultimately see all of the big American automakers focusing on. And maybe it takes a year or two, but this is maybe the root forward.

It does seem like an ideal solution for America, where we have the most range, anxiety and these things. This technology works the best on the vehicles we love as shoe these and pickup trucks. It lowers their weight to extend their range. It just seems like a technology that would actually have a consumer pull instead of a regulatory push, which is what we've seen with so much green technology. Everyone I've spoken to about this technology are they're like, you, guys,

Maybe it's the bridge to the electric future.

Whatever, But it seems like something that would resolve a lot of the issues that people have with electric vehicles but still get them to drive one and.

Better than a hybrid in terms of impact on the environment.

Yeah, So, Keith, if okay, we could get the RAM next year, potentially, when's Jim Farley at Ford going to have something out for us or is there a chance that we could get some of these Chinese vehicles in the US anytime soon?

I think have you read headlines lately seen on an election.

Also Keith's story and at the end he talks about this.

Yeah.

Yeah, so President Biden wants to put one hundred percent tariffs on Chinese evs, right, and i'm Chinese cars in general, and Donald Trump wants to be even tougher. So getting the Lee Auto L six or L nine that I that I cite in the story and have pictures of which do wonderful things beyond just having.

This great range.

Getting them here anytime soon not likely. So it's really up to the automakers in the United States. Not just the US automakers because that would just be g important testa right, but the automakers who operate in the United States to a Nissan, the Germans, you.

Know all of them.

And by the way, BMW had one too, called the I three that then they've stopped making.

So they know how to do it. They just have to come back into the market with.

All right, everybody for your barbecue this week in our next cocktail party, talk about e revs and read this unbelievable stuff.

I love it, very cool.

This to me sounds like answer all see you're buying that ram not and thank you so much. Bloomberg News Auto reporter Jenning us there into trick.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm. Easter Listen on Apple card Play and then Bright Auto with a Bloomberg Business app, or watch us live on YouTube.

We got a patch of news from retailers this past week. Target ended a string of quarterly sales declines by focusing on cutting prices on essential goods, winning over inflation hit consumers who are pulling back from other retailers. Meanwhile, Macy's slightly missed analyst estimates for its quarterly revenue and load its outlook for sales during the rest of the year, citing increased discounting by competitors, and a more cautious consumer

What Target has really done is they've honed their focus. They've listened to their customers. They've looked at waste, reduce prices and make things more affordable or offer more value to people. And they've mixed up their assortment. They've added new things, They've tried to make things fresh, new to appeal to those customers. And for the first time in several quarters, we're seeing positive traffic both in stores and online, and that sets them up for a strong second half of the year.

So can we assume that they've kind of changed strategy or is this just whoa, we just got it right right now? How do we guarantee that this continues?

Jen?

You know, it's always like, all right, great, what are you gonna do for me next quarter? And the quarter after?

Yeah, I think this is where actually one of the interesting divergences is where you see where Target is versus Macy's, which is not doing as well. Where you Target is pretty good at being quick to pivot and quick to implement strategy. And when you think about things more in the discretionary category, that takes a little bit of time to get the assortment in, get it designed, get it produced, get it in stores. And it's in stores now, and so you know, I think that what they've got in

Shrink this was an issue over the last couple of years for the company. I remember them citing Shrink for the reason to close stores in certain parts of the United States. There was some debate whether or not that was actually the reason. Putting that aside, what do we learn about Shrink in the most recent report, Well, Shrink.

Is actually getting better.

And this is the idea of stuff getting stolen or just.

Disappearing right exactly. It's things that are either lost to theft primarily or through damage in the store. And so what you know, there's been a combination of new technology implemented at the front end when you're checking out to help make sure that people are being upront and honest when they're using self checkout, but also it's that the consumer is a little less frantic and that was leading

All Right, So I think about Target and I feel like for such a long time they stood out as a retailer just you know, innovative, interesting, cool. Who is their customer? And I guess I want to I'm curious about that because how much that is tied to what goes on in the economy.

Yeah, Historically Target's core customer has been sort of that middle income consumer, and you know, some of the higher part of the low income consumer as well, and you certainly had higher income households there, but the core was that middle income and so you know, what we've seen is that when Target refocuses on things like value, that resonates with that core consumer when they are you know, for example, for back to school, they were advertising five

Okay, the big everything taken together, and we're going to talk a little bit later about Macy's and about TJX. But taken together, what do the results tell us about the American consumer big picture?

When you're looking at these retailers, whether it's Walmart from last week, Target today, you know, these retailers that are serving that middle income, lower income household, what they're seeing is that consumers are still spending, but they're being cautious about what they're spending on. They're making very careful decisions. And so as you've seen some prices come down, for example, we are seeing food inflation easing. We are seeing shelf

Hey, one last question, Walmart getting rid of it? It's JD dot Com and China. How do we need to think about that?

Well?

I think this is a strategic exit for Walmart. You know, they traditionally will go into partnerships, learn a lot from their partners, learn how to do things themselves in it operating in a foreign market, and then take over that execution themselves. You know, I think when you're talking about China, a lot of retailers have become much more targeted in their strategy on how they're going to execute in that market.

All right, great stuff, as always, Jen, Thank you so much. Jen Bartasha, She's senior Retail Stables and Packaged Food Analysts for Bloomberg Intelligence.

Okay, so target shares maybe surging, JD not so much, Macy's not so much. This after the company cut its net sales guidance for the full year. It's cited a more discriminating consumer and heightened promotional environment. Mary ross Gilbert is Bloomberg Intelligence a senior retail analyst. She joins us from Los Angeles. We have known that Macy's has been facing struggles for years at this point. What did we learn that investors did not like so much in the most recent quarter.

Well, I think what investors didn't like so much is the fact that they missed their top line estimates. So they are looking for a sales decline, just not to the magnitude that they experience. So what that meant is that they're comp sales and we're really looking at just the go forward store base because they are planning to shutter one hundred and fifty locations. But those stores and their name plate were down over three percent on a

So when you just think about the overall.

Competitive marketplace, but also you should note that Macy's is also very promotional. Almost every day they're advertising a promotion. And if you click on Macy's online and then you start to go away, it'll immediate flash, hell we'll We'll give.

You twenty five percent off.

They don't want you to leave, so they're doing what they can. But the one thing that we did see in their numbers is that this new initiative, which only began in the first quarter with the new CEO, Tony Spring, who came from Bloomingdale's and really right side of that business, what we did see is that the fifty new stores that they've enhanced, what did they do.

They brought back service.

Service has been absent from department stores for many, many years.

They brought it back in these fifty stores.

They enhanced the sortments, so that meant that they brought in new brands like Carl Lagerfeld Avec, Lemie, Donna, Karen and French Connection and that is growing sales. So their comp sales lifted one percent, out performing the rest of the Go Forward stores by four hundred and seventy basis points,

So Mary, essentially, bottom line, Macy's has figured out kind of the secret sauce of what they need to do. They just got to kind of make up the batches and get it out to everybody. Is that's essentially they just have to move quicker, like they've figured it out.

Yeah, Carol, I think they do.

I think that's definitely what we're seeing in the first and second quarters with those or fifty stores turning in positive comps.

That's certainly what it looks like.

Yeah, because I always think about it. I mean, it's the same thing I asked Jen Bartashus about. You know, when it comes to Target, who is their customer? Who is the Macy's customer though, Like I do think about who's shopping at these places.

Yeah, So I would say about half their customer base, or more than half their customer base, is probably earning less than seventy five thousand.

So it's a household.

Income that's being squeezed by inflation, and so that's leaving them with less discretionary income to spend on apparel. One thing that has turned out to be strong and is a good draw for them, of course, is cosmetics, and that's the reason why you've seen them expand the cosmetics presence in all of their stores.

Every year, it seems like it's been expanded.

And that's Blue Mercury, correct.

Yeah, not all of the stores have Blue Mercury, but yes, that includes Blue Mercury, and of course blue Mercury, which is more upscale is also you know, it's a growing chain for them, and they delivered two percent positive comps in the quarter.

So yes, love my lotions and from everywhere, and I'm sure you know investors love the margins when it comes to anything, whether it's perfumes or cosmetics. It's pretty crazy. Hey, the other thing I do love, I'm Carol Masser and I like going to TJ max companies. I'm just going to put it out there and it probably needs some interventions. But having said that, TJ Max, we also got some news from them. We got earnings and they also are

Yeah, so because the company has really created this winning formula and what that means.

Is there's years and years of knowledge and expertise.

Plus they've made major investments in their people, so they have longevity with their employees. And you know this includes training buyers. It takes fourty five years, by the way to train a new buyer just to give you an idea. So with this expertise and as they have grown up through the ranks, this gives them an opportunity to continue

They're going to be able to use.

This secret sauce in helping those businesses grow, which will make their investments flourish. And so the same thing is going to happen with this latest investment, which is a Dubai based company operating in the Middle East that operates about one hundred brands for less is the name of a store concept in that market.

And could we see more?

Absolutely, because this is a good use of their cash investing and being able to capitalize on their own expertise and allowing for some of these executives that they've groomed to be able to have a place to deploy their expertise.

Thanks to Jen Bartasha's Bloomberg Intelligence senior Retail Staples and Packaged food analyst, and Mary Ross Gilbert also the Bloomberg Intelligence team, She's senior retail analyst still ahead on Bloomberg Business Week, No easy way to say it. We've got a riveting story on the doctors that cut a giant tumor out of one of our colleagues head, which led him to investigate and ask is there a better way? That story's next? This is Bloomberg.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Easter on Apple car Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven five.

Well you all know the expression it's not brain surgery, Well, Carol, sometimes it is just to ask our colleague Noah Bouhier, who just a bit over a year ago found himself on an operating table at the University of Washington as surgeons cut a long upside down you on a scalp, peeled back the skin, then made a great fruit sized opening in his skull through which they could remove a four centimeter wide tumor on the back of his head.

No Boohire is Bloomberg News Data Investigations reporter. He joins us from our Seattle Bureau and for Bloomberg Business WEEKI rights not just about his experience, but also about a renowned neurosurgeons decades long quest to develop a better way to eradicate tumors. No, first of all, we are so glad you're okay and you're with us to talk about this, what you wrote about. We just can only imagine what

Deal with it.

Thank you for having me on. I mean, it was a rather surreal moment. I was actually traveling for work. I was in Nashville at a conference, and I took a break to go out for a jog one afternoon, and toward the end of my run, collapsed with a really large seizure on the downtown streets of Nashville. And when I came to I took a ride in an ambulance, got a CT scan, and that's when the doctors found this really large mass in the back of my.

Head and the mass fortunately was not cancerous.

Correct.

Yeah, I mean if you were going to have a kind of brain tumor, this is the kind you wanted. The pathology later showed that it was extremely slow growing, hadn't metastasized, and frankly, this is the kind of thing that a neurosurgeon wants to see because they know they'll have a high rate of success if they go in there to resect it.

We have quite a bit of time with you, so we're gonna sort of go in chronological order here. A little over a year ago you did find yourself on an operating table. Talk a little bit about the procedure and what you actually went through to have this mass removed.

Yeah, I mean I think you hit the highlights in the intro to the segment. Apologies to folks who don't want to hear graphic stuff, but the basic operation is to make a large incision on your head. Surgeons peel back the skin, they cut through the bone, set the bone fragment aside, do what they need to do to access the airy. Then they reattached the section of bone kind of like a lid to a cookie jar, and

That's exactly why we wanted you to explain what you went through, because what you spend the bulk of the story talking about is how there could be a solution on the horizon that would not require somebody to have a procedure as invasion, as invasive. Excuse me, as your procedure was tell us about what you learned about doctor Neil Cassel.

Yeah, so I learned about doctor Cassell through actually an interesting connection. I've been on this show in the past, you all, I think many listeners know this, but I used to be the corporate reporter here covering Warren Buffett Berkshire Hathaway and more than a decade ago, I wrote a profile of a guy named Ted Weshler, who Buffett

Actually treat disease.

And that's when he turned to Wessler set up this foundation, and their mission really is to develop new ways to augment and advance treatments for a whole host of really tricky diseases by using a bunch of effects that ultrasound can stimulate in the body.

I have to say, I am a little obsessed with what happened and what you report on. And I'm sure you came across to a sixty minutes piece that was also about the use of ultrasound, and this was basically to open up a blood brain barrier to help drugs penetrate and help Alzheimer's patients, but also they talked about people with addictions. It just feels like all of a sudden, ultrasound is potentially having a moment.

Yeah, I think it's getting more attention because they're starting to be some clinical trials that are yielding interesting results. Now, one of the things I wanted to mention here and when I went in I wanted to be skeptical, is because a lot of these studies and applications of ultrasound are still very very early stage. And I just want to make that clear to people because there's an interesting phenomenon that happens when people are pursuing novel medical technologies.

Now, when it comes to bringing a new technology up to the standard of care, such as you describe, what's a way we can think about a timeline that if everything were to go according to plan, this would become available.

Well, I think that's the really interesting thing here. So doctor Cassell has been for years saying that this. When he started out nearly twenty years ago, he thought this looked like MRI tech technology was thirty five years prior. Now we all know what MRIs are. Now so many people have had them. If you haven't had one, you know someone who has. So on that timeline, it would suggest that we'd have, you know, real treatments for some of these tricky diseases in the next fifteen twenty years.

But I think it's going to be disease by disease.

For some things. Ultrasound's going to work. For some things it's not. And one of the real tensions that I tried to get at in this story is the real need for optimism and enthusiasm if you're even going to go to the effort of trying to discover these new treatments.

But also you know.

The reality of science and getting things approved and becoming standard of care requires an enormous amount of evidence. It involves designing clinical trials that are going to prove beyond death, not just that something works and is safe, but at the end of the day, you want to know that it's cost effective.

I mean, that's what the.

Payers from medicare to private insurers are going to care about.

What do you think though, No, our audience, you know, who are often looking for like the future trends. Right we talked about AI so much right now in the GLP one drugs, which are really have been a big kind of innovation, it feels like in certainly the pharmaceutical space and care in the health world. But how do you think our audience should be thinking about what you have found out about potentially what could come from ultrasound, minding you it could take a while.

Yeah, Look, I think it's a space to watch. A lot of the dollars that are being invested right now are coming from private industry, but compared to other kinds of medical technology, it's a relatively small amount of money. But I think one thing to take note is that these aren't silver bullets in and of themselves. Think of ultra sound as one tool that might augment or advance other methods of attacking very difficult to care diseases.

And can I ask you, is doctor Cassell the right messenger for all of this? He certainly, as you write your story, has been great in terms of networking and fundraising and is certainly out there.

He's an interesting person.

He's obviously got an incredible rolodex and been able to get some well healed people and prominent people involved in this effort, and I think that certainly has a place. Many of the people I spoke with said that he's been very important to this field and bringing it to prominence. But at the end of the day, he is a pretty complicated character. He's a very byzonic mission, a tough boss.

Sounds like it's a little bit of a sense of humor considering how he ended the story. Can you just share with us what I sent.

To your Yeah, not to be too much of a spoiler, but it does tie back to my own experience. So I had my one year check up and I'm doing great. The tumor's not back, but the place where it used to sat it sit, excuse me, has grown in size and it caused a brief moment of worry whether this was going to necessitate another surgery. And I called doctor Cassell to tell him about this, and he basically said, don't worry. If you're feeling fine, don't have other symptoms.

Which you'll be. It's something to be admired.

And he said if my editors were worried that I had a hole in my brain, that they should I should ask them how many other journalists we employ here at Bloomberg who only have half a brain.

On that note, we're going to wrap it up. Listen, incredible reporting We're so glad though, that you are well. Thank you so much for sharing your story. No Boo hire his Data Investigation's reporter, killer reporter here at Bloomberg News, joining us from our Seattle bureau. The story is a mustere check it out at Bloomberg dot com and on the Bloomberg.

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Let me inn our second hour of the weekend edition of Bloomberg Business Week, including how the US Congress is indirectly helping out the hotel business. Just ask the CEO of Wyndham Hotels and Resorts, which we did, and more, Plus the streaming wars, the race for content and leaning on influencers with the CEO of Dolphin Entertainment, and from what top exec strink to unwind after work to the bathroom selfie to j Powell? Are you listening? Because high

We do three things all in one. We started as a production company film and TV producers, and we still do that, having dis released The Blue Angels with Imax this spring. Then we started assembling investing class pr and marketing, special events, influencer marketing companies around entertainment. And then we started investing in things that we could market like consumer products.

So we're very excited for that.

All right, So talk to us about the quarter and the business. Look back, look forward in terms of we mentioned the headline in terms of second quarter revenue, specifically in terms of a record that's according to you. Guys talked to us about a little bit of the business and where the growth is coming from, because you mentioned like kind of these three areas. So where's the growth been, where's it going?

Yeah, Well, we've been blessed with a lot of organic growth. The companies work together create synergy between you know, creating campaigns for motion pictures or consumer products that may want both PR and influencer marketing as an example, or event marketing with influencer, let's say. And in addition, we're growing going back into production. The Blue Angels was a big hit for us in partnership with Imax, and that was certainly part of the revenue increase as well.

Well, it's interesting, well and that Imax partner ship, how much more can you leverage out of it?

Right?

Like, this is something it sounds like it's got some legs and I'm curious where you take it?

Sure, yeah, thank you. It's a multi year partnership. We're used to doing that with Dolphin. We were partners with Nickelodeon for years and years in making children's content and have had fifty to fifty partnerships in the past with Warners or others, So we hope to be doing documentaries

Yeah, and we you know the press release that you guys put out it talked about, you know, debuting as number one on prime video over the Memorial Day holiday. It grossed what over two million at the box office IMAX, and that included a top ten debut with about one point four million in its opening week end. That what did you call it? Dockbusters?

That's right?

Yeah, So where else do you go with like do you just continue to do more of that? And how expensive is it to do and build out that content?

Well, documentaries are less expensive than the bigger features, of course, so they typically range in the three to five million range, let's say for theatrical Obviously you can make them for less or more, and we do think there's an opening to do one or two of those a year. They certainly program well, there are gaps in the year where there wouldn't be studio content available or fresh studio content to put in dimacs. And also we think our partnership

When do you start to do something like that or what's involved in getting into that area more aggressively.

We hope to launched that in the first quarter next year, and Imax has already been doing some of that themselves, and it's a natural extension of our partnership to go into that content together.

What's the challenge in all of this, because I do feel like, you know, Bill, I think it's safe to say we cover this a lot at Bloomberg that I mean, there's a lot of places to view content, there's a lot of content creators, but there's a lot of people vuying for that content. So what's the stuff that really you think moves the needle in terms of engaging with the consumer, Because I know I get to a point where I'm just overwhelmed and I'm done, and I pick

Sure to.

And I like reading too, so I understand completely. And I think a lot of people try, and you know, thread the needle by thinking about what would work best in which type of delivery. You know, when you talk something like an IMAX system then and network, then you're talking you want that spectacle, something that warrants people coming out and spending the mon you know, on the smaller screen and the steep streaming wars, you're seeing a lot

What about you mentioned live sports, Broadway comedy other or you mentioned Broadway comedy. What about sports in terms of last streaming or is that just a too expensive, already crowded the big boys, the big guys are in it.

I think the live certainly sporting events, it's probably crowded, and those rights only seem to be going up and up right, But we do like sports content generally quite a bit, and you're seeing a lot of opportunity this year around women's sports, and that's an area that we

You mentioned the influencers, and I thought that was really interesting. I know you've got a relationship with Glow Lab. You are thinking about the younger audience. I mean, first of all, a couple things, what is your target audience or you don't care, you want to go all over the all over the kind of age spectrum.

I think with influencer you can you can broaden out. We started with the core, which you know, female twenty five to forty four, let's say beauty, wellness, fashion products. But the thing about influencer marketing it's it's it's grown double digits year over year some years, I think triple

Well, when you think about the work with influencers, as you said, I mean you also want to be what creating the products that they're involved in or talk to us about how you kind of drill down into that relationship, which I would assume that opens up even another revenue stream for you guys, it Shurret.

Does, thank you.

Yeah, it's really marrying a couple of different aspects of our business. You know, we financed and produced television and film for twenty years prior to going public. We're used to project finance, and then when you marry that with the rise of social media and influencer marketing, then it's really just applying project finance to consumer product. We could develop and bring to market consumer products where our form of marketing, especially in entertainment, will give us a better

But it'd be great if you get a piece of both, right going forward?

That's right, that's right, hey, Bill.

One thing I did want to ask you when we were talking a little bit of nuts and bolts in terms of the quarter. You are a microcap company. We don't on Bloomberg talk a lot to companies that are below a buck, and I am curious what you get from investors. Stocks down about sixty percent year to date. What do you hear from your investors? And what are your aspirations? Is there something about you know? I understand sometimes we start small, we get bigger. What are your

Sure? Yeah, I know.

While the microcap environment as a whole, as I'm sure you know, Carol has been had a tough year.

Yep.

We've posted record quarterly revenue three quarters in a row so and positive adjusted operating income.

So we're we're hopeful and confident.

That the will be rewarded in the market, especially as a microcup doing real revenue with real business.

So is it just investors saying, listen, we get it, it's the environment, or what do they want to know about your business in particular? What are the questions you get most from investors?

Yeah, I'd say it's mostly about the environment. You know, numbers don't lie in terms of what we're doing in revenue and adjusted operating income, and we're beating our own projections, including the analyst projections out there. So there's there's a sense of frustration with some that you know, they just wish that, you know, we weren't being lumped in with some of the others. But you know, we just have

When you look at the environment, and I think it's you know, Bill, it's an interesting one. We're very focused on, you know, what's going on in terms of Fed policy, what's going on in terms of economic data. We talked a lot by the end of the week about a soft landing, and it looks like things are, you know, kind of working out fairly well, not all Americans certainly feel that. We talk a lot about the differences between the top and the bottom in terms of the economic strata.

Well, we're hopeful for the for the rate coaches. I think like a lot of people will free up cash and discretionary investment into the microcap world, small cap world generally, right.

I think you hear a lot of people talk about that.

We're not as susceptible to some other companies in terms of the interest rates. We've fixed ours in commercial paper already, so we feel good about our position. But certainly lower interest rates or lower federates would certainly benefit the microcap world for sure.

All right, Yeah, No, we talked about that actually earlier in terms of small caps and the importance of economic growth as well as in terms of the interest rate environment, bigger, broader picture. We spent a lot of time talking about kind of what happens to some of the big media players. We talk about streaming so much. You are in the content business. What do you make of all of what's

Yeah, and we're blessed where our film and television PR firm forty two West, works with almost every major streamer out there, and we promote shows on so many different platforms, from Netflix to Amazon to.

Hulu and Paramount Plus, etc. So we see a.

Lot of them contracting some in terms of investment, as I'm sure you've talked about quite a bit. But the sheer vol of programming the last few years has been overwhelming to a lot of consumers, I think, And probably this is for the best.

And so you don't care kind of who wins because you get to work with them, all right, that's fair to say. But I wonder do you think that there will be because you do see some that might be struggling or slowing down a little bit, that there'll be some kind of shakeout.

And there has to be a one would think, you know, And certainly the conversations out there about M and A among some of you in the bigger studios, right, isn't idle speculation, So there'll be a right sizing of the ship, I think, and the industry hopefully will be stronger for it.

So what's kind of interesting when you look at the content and media world and you look out. You know, we talked a little bit earlier about influencers and your work with Glow Lab, and it is interesting in a week where again you know Warren Buffett, you know, we saw his stake in Olda Beauty. We talked about it through the pandemic and out of the pandemic that whether it was Spoor or some of the other names that

Yeah, and AI is unstoppable, right, we take a positive spin on it, certainly but well, I think when you take a step back and you think the world before and after the rise of social media, you can make a case that what it's done through the explosion of what used to be Remember when it was mommy, bloggers, and then it became influencers and now it's creators. You could make an argument that's democratized the ability to launch

The ya listen, right now you are on YouTube. We don't get to see your face right now you're on the phone, but if you were on Zoom and so on and so forth. I mean, right now, simmilcast on radio, we're on YouTube, and we're on our streaming service, and then earlier we're also on television. So it's just interesting, like the different venues. I watch a lot of YouTube channels.

YouTube?

Hands down, hands out, hands down.

It can do both short and long form, and it's already got the mass.

All right, great stuff as always, listen, Thank you so much. Jillo doubt He's founder and chief executive officer of Dolphin Entertainment, joining us on this Friday in Miami.

You're listening to the Bloomberg Business Week podcast live each weekdays starting at two pm Eastern on applecar Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa playing Bloomberg eleven thirty.

Window Hotels and Resorts has some twenty five brands in about ninety five countries and ninety one hundred plus hotels, and this past week and opened up another one, the Echo Suite's Extended Stay by Wyndham Dallas, Plano, Frisco, the second extended state Echo property to open in the United States. With more on that, and I'll look at the Leisure and Business Traveler, My co host Tim Steneveek and I checked in with the President CEO of Wyndham Hotels and Resorts, Jeff Bollotti.

This is the first hotel that a developer of my name of Ian McClure of Gulf Coast Hospitality based here in Texas, Texas, a very important state for US. He's building twenty five of these Echo Suites by Window.

The demand for this type of products incredible.

It's a very comfortable reveit it's our fastest growing brand because of the demand that's out there.

Well, tell us about that, why it is your fastest growing and what is the demand specifically, who wants to stay there, Who's demanding like, hey, we need these kind of places.

Gosh, last month I was sleeping up out in Spartanburg, South Carolina, where Spartanburg has received a billion of the nine billion that that state, that single state has been awarded of this want so far, of this one point five trillion dollar piece of legislation, the most historic piece of legislation this country's ever seen. There are one point

Put them in. I mean here in Plano, perfect example.

There is so much development going on around the community here that I'm in today and that i'll be this evening with developers looking to build more and other brands from a medical profession, from the automotive profession, and a litany of projects that haven't yet begun that are going to begin soon. And companies are out contracting right now for lodging accommodations like this. It's it really is. It's it's an amazing I've been in this industry for thirty years.

I've never seen anything quite like it.

It's really fascinating. I'm just kind of going back to what you kind of kicked off with. So you're talking about the spending bills and the legislation that's come out of the US Congress, and that is really shaping kind of where you develop exactly.

I mean, our teams have identified about four thousand of the forty thousand projects that will be funded by the one point five trillion dollar bill and the two hundred and fifty billion dollar Chips Act bill, those Chip Acts build.

That bill has has.

Begun funding projects in a here in Texas as well.

We have this this is our six hundred and ninety first hotel that we've opened as a company.

But in Taylor, Texas, Samsung is building a plant, a chip plant where they will spend seventeen billion dollars over the next ten years. And they have thousands of workers right now who are looking for long term lodging accommodation. They're checking in for five, six, seven months, some are checking in for over a year. Many are from other parts of Texas and driving home on the weekends.

But they want a.

Place that they could cook, put their dishes in a full sized dishwasher, having full sized refrigerator, and in a great microwave. They want a place that feels like home. And and that's what's that's what's fuel and Carroll demand.

You know, what does it feel like? Waterville, Maine, Jeff, which is I'm just now learning where you and I both went to college, a small school called Colby, where we found ourselves freezing pretty much November through April every year, hold up in our dorm rooms playing beer pong because it was so cold. And main it's main.

I know, Tim.

I don't know if you've been back to Waterville lately, but it has been transformed. The development that's going on in downtown Waterville is really.

Impressive to see.

And I was thinking to myself, Fine'm smiling so lively that Waterville needs an echo sweets extended, say by windhow because we would kill it in that market, as you know, with parents who did not have the logic accommodation. So when we were there that are available today on the new construction round.

Yeah, just so everybody knows. It's an old milltown that, like many mill towns in New England, had fallen on hard times years ago. The college and the hospital, at least when I was there in Waterville Main were the biggest employers, and you can see it. But since I've been there, I graduated close to twenty years ago, and there's incredible development in the area, really a revitalization of downtown.

All right. So I'm curious though, so exciting growth development, but what happens I don't know when the money kind of runs out in terms of the development from like legislation. Do you worry about that you won't have the people who will be demanding these kind of rooms in Plano, Texas or elsewhere throughout the.

State, Carol, That is a long time away. I mean we are in the very early innings. Less than twenty percent. I think the figure from the COB is less than seventeen percent of the one point five trillion has been allocated, and even a smaller percentage of that has been spent in terms of shovels on the ground.

The projects that you and Tim are probably hearing about and reading about.

I mean, you think about big projects in the New York area like the Hudson Town those projects are so far out there. This is certainly helping us from a demand standpoint, demand generation standpoint. I mentioned that we've identified four thousand of those forty thousand projects so far. Maybe there'll be thousands more that will be funded, but that is that is a long long way away. I'm not thinking that far out. It's at least ten years, and who knows in ten years what's to come in terms

So you don't ever say the word right now recession based on what you're seeing. Is that fair?

Well?

Look, I mean, our brands have always outperformed any economic downturn.

They did after nine to eleven, they certainly.

Did during the eight and nine Great Financial Crisis, and there was no better outperformance in the industry than the economy and mid scale lodging brands of Wyndham hotels and resorts throughout COVID.

Our brands were the very first to recover.

Our brands are known as Days and by Windom, Super eight by Windom, Lakita by Windom, very large systems of thousands of units in this country that have great brand recognition, where franchisees never had to close their hotels because they were able to break even at thirty percent occupancy.

Where while we're a leisure based company and seventy percent of our.

Business is relying on the leisure travel demand, which is still points still out there, that thirty percent that is non leisure is that essential everyday worker whose office is not a downtown office building that's been closed as it was throughout COVID, but whose office is the front seat of their construction.

Or utility vehicle, or is one of my traveling.

Nurse daughters who have to go to work that are in need accommodation during the week. Again, our brands have always outperformed in economic downturms. We're not seeing a recession to your point right now, and we're feeling very confident about the year ahead.

Jeff, just remind everyone of Wyndom Hotels and Resorts business model are you one hundred percent franchise owned and operated i e. You guys actually don't own and operate any of the Windom resorts and hotels that people see exactly.

Tim And that's what investors wanted to see when we went public five six years ago. They wanted to see a company that got out of the ownership game. We had to own hotels at that point in time, out of the management game, which we have. We are a one hundred percent franchise company. We're the world's largest hotel franchise company. We franchise about six thousand hotels here in the United States and another three thousand, two hundred and ninety five countries around the world.

So it's it's it's less risky, right, oh, completely.

You know, our business model is is extremely resilient.

As we were talking about in the periods of downturns, we've actually been able to even in periods we're revenue per available room might generate more earnings for investors. We have we have many levers to pull.

One thing I'm curious about and the levers, like you have lots of different brands and you hit at different you know, economic individuals or families or consumers, So I am curious about you know, I was looking at some of the bi research our our team does, and it talked about your US room base, including a larger percentage of lower price economy hotels and other lodging companies. You did though by American, American Inn and Lacinta la quinta

I think one of the biggest miss numbers is that our guest is low income. It is squarely middle class.

When you look at the demographics of our guests, and those middle class income Americans who are staying at Thank You American or Lakita or Days In or Super eight are feeling better about life today than they were, certainly in the middle of COVID or pre COVID levels, and the consumer sentiment that we're seeing continues to improve.

We look at many leading indicators.

In terms of how we believe the consumer is feeling. Bookie windows continue to increase. People have reprioritized their vacations as to the very top of the list. They want to spend their disposable income on vacations more than on any other consumer spending. We're seeing longer lengths of day and certainly the ability for so many of our consumers to work remotely on a Monday and Friday is helping

Day was very strong.

It was up four percent versus last Memorial Day here in the United States. July fourth, Triple A reported was up eight percent versus where it was versus last July for and we're expecting the same for Labor Day. So these middle income Americans want to travel. The number one preference for vacations in the United States of America is drived to, and ninety percent of our business is drived to.

So Jeff, help us understand. Help help us understand the segmentation, because Echo is for the you know, economy traveler, that's where where you are right.

Now, and the economy business travel.

Economy, business travel, okay, where really blue collar water Walk water Walk is upscale, more upscale, and then you have Hawthorn and mid scale. Give us sort of the price point for Echo versus water.

Walk, Yeah, I mean price points look obviously are determined by the markets and the location they're they're in. But the Hope guests room I'm in tonight, we'll be checking guests in at an eighty dollars price point that water Walk average daily right might could be depending on the market double that. And sure we have but we have lots of aspirational Windoms, Windom Grands Skultcha.

We have a new luxury brand.

The Registry Collection, which might have a three or four hundred dollars handle to its average daily rate. But for that blue collar traveler who's staying at an Echo suites, it is by and large often being paid for by obviously their their employer.

And also the demand for this type of product is being driven by how much transient motion there is out there in our country.

For people looking for short term and meetium term and long term accommodations on the relocation front, given an act of housing in this country.

Hey, one thing I want to do. What's cool is you guys are global your second quarter rev par so we're talking about revenue per available rooms, so key when we're talking about anybody in the hospitality industry. Second quarter red par was flat for the US, down two percent for economy, hotels up seven percent internationally, and you had a thirty seven percent gain in Latin America and fifteen

The biggest trend for all of the lodging companies out there for the next quarter, the quarter ahead, and the year ahead is still there is a lot of occupancy still left to recover the occupancy tailwind really around the world with very few exceptions country by country still has room to grow, and so yes, international it was a big bright.

Spot for US.

Our international red park revenue per available room was up seven percent in the quarter versus the same time last year. And here where things normalized. Economy, as you pointed out, was down, but it was improving from where it was last year. Is things normalized and it was up in some of the other segments. There's great pricing power out there, Carol. I always remind investors that that pricing still hasn't caught up in the lodging industry to inflation.

I think inflation's up something like twenty three to twenty four percent pre.

COVID days, and our average daily rate is up over only seventeen percent. Our hotels are operated by small, mom and pop business owners who feel very confident about holding on to that advertrate the game during COVID and continuing to improve it, but at the same time building the business base of business on the book with a business transient that allows them in periods of demand to price up.

Jeff, great to check in with. You really appreciate it. Jeff Blotti. He's the president CEO of Wyndom hotels and resorts, joining us from Play No Texas Jeff b. While you're listening and watching Bloomberg Business Week.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple car Play and then Brought Auto with a Bloomberg Business app or watch us live on YouTube.

Fittit car collectors downshifting their spending. The c suite, drink of choice and marble tiled floor spread out like flower pedals while painted vines cascade from the ceiling over a glowing circular sinc. Yes, it's all in a bathroom, the perfect setting for a selfie. Yeah, all right, you're gonna find out about why. Yes, it's time for Bloomberg Pursuits and with us as the editor of Pursuits, Chris Rouser, Yeah, we got to start with this whole idea of selfiees.

Carol, didn't you know?

Didn't you know that the most important room in a restaurant these days is the bathroom? How did to explain?

Explain?

Please?

Well, it's actually a crazy story. So Kate creator are amazing food editor in London, pitched this story.

And were you like, did y'all know Okay, yes, she.

And I always have this. My like number one bugaboo is when a restaurant bathroom doesn't have like an occupied vacant signal on it and you have to knock and then you can't hear anyway. So I like, we talk about restaurant bathrooms laws. And now that Instagram is such a big part of restaurant's success, and they're marketing because people take food selfies. They do the lighting in the

Just at dinner.

And one of his ideas in this schematic of our restaurant of the future was you walk into the restaurant and there's a hand washing station, Like the bathroom is kind of the first thing that you get to. So that was like an idea that we ran in Bloomba.

I'm sorry, I do like that because, like some especially in the city, right, you just feel like you just walk outside a little bit and you're like, I want to wash.

So now, when you get into Kogodoc, which is one of the most fabulous restaurants in New York City, it's so so cool you can't get in. It's this fried Korean chicken and champagne restaurant. The first thing that you see when you walk in is a hand washing station and it's got like Mez soaps, and it's very fancy, and it's got these great lighting mirrors for like selfies. Stunning, and that idea came from like working with us on

It's not just a New York thing, right, It's like all over the place. First of all, though, you have to remind everybody, for those of you out there listening who want to do your own bathroom selfie, I mean how many I mean tons of people have done this, like millions.

Oh yeah, I mean we yes, nine million bathroom shell hashtag bathroom selfie hashtags have been shared. We you know, there's one of our colleagues was in Georgia, Straccheria and Munich and sent me pictures of this disco ball bathroom. There's a roller rink slash restaurant in Brooklyn, of course, that has a DJ in the bathroom.

It's called Club Flush.

So listen, the DNC used a DJ like for the roll Call. Apparently DJs are finding themselves everywhere, all right. For executives who often travel around the globe, they have busy days. CEOs, you know, just like the rest of us, they've got unwind after work.

Yeah.

So in every issue of Business Week every month, we do a CEO diet where we ask a bunch of CEOs what they do for exercise, what they were to work, what they eat for breakfast, which we've talked about, and so this month we ask them what is their signature drink, like, what's their go to? And you know, I got to say, it's a lot of martinis.

We got a lot.

We couldn't run all the answers that we got people you couldn't be working. A lot of them were dirty martinis. But Jen Hymen, who's the Rent the Runway founder, she was like, you know, I love a spicy margarita, but on a cold, cozy Brooklyn day, I love a mescal and the groni and a groaning with mescal, which I think is great.

Yeah.

And we got some apparel sprits.

Is uh aperol sprits?

Yes?

Yeah?

And can I just say there was a lot of non alcoholic too the beverages, which I thought was interesting that did not Tim if Tim was here, because he's a huge non alcoholic dude.

Yeah.

Yeah, sort of like neotropic kind of drinks strengths that are sort of wellness oriented and have no alcohol. That was also popular.

Yeah, exactly, kind of interesting. I really feel like, all right, can we get to you're a watch person, I mean you're you're a person of many interests, but I love watches.

You love.

This was just kind of a fun story. I do this, like I don't know about you. I've come off a plane and I see somebody wearing something in that like Alex stalk them like, hey, where'd you get that?

Yeah, I'm the same. I will walk up to anybody and ask them about their watch.

I know.

And so for my watch.

So I have a watch club, which is we do We have a newsletter and we have events and if you're a Bloomberg subscriber, you can be in our watch club.

And so what do you do?

Like, what do you like?

Who do you contact or how do you reach out to you?

No idea.

There's a way if you google it, So we're going to do it. It's if you go to Bloomberg dot com slash accounts, slash newsletters, you'll see it, okay, or just Bloomberg dot com slash newsletters.

I can't see it.

But anyway, I was walking around and in summer, there's not a lot of new watches. Actually, because Europe goes on vacation, there's not a lot of new debuts. So I was kind of looking out for the watches that were in the wild, and I saw some really really cool ones walking around this neighborhood in New Manhattan. But also I ran into a guy who had a nineteen twenties Rolex on the on the boardwalk and Fire Island, and I he found it and he restored it, and

It's so cool.

And the surprising watches also extended to the Olympics, where there were a crazy amount of watches. People running doing sprints, like competing in one hundred and eighty five thousand dollars. Reshard Meal watches. The guy who won the pole who like set the world record for pole vaulting arm and duplantis he broke his own record. He's broken his own record nine times. He was wearing a new Omega watch.

I mean that's like killer advertising.

I mean you couldn't I couldn't believe it when I watched it live with my daughter and I was like, oh my god, he's wearing a watch. I wonder what that watches.

It's unbelievable. Hey, listen, just we're going to transition because I want to talk about a story that Hannah did Hannah Elliott real quickly though. There were some news this week about selbuying a minority steak in the Swiss watch brand n B and F.

You know this brand, Yes, So Chanelle makes great watches, and not everyone knows that because you think of them as so they're leather goods their fashion, but they also have a great watch making tradition and to sort of improve their legacy in that field and their authority. They bought a twenty five percent steak in MB and F, which is a very cool, very avant garde watchman. They only make like four hundred, five hundred watches a year.

We do into Chris's lives.

I entered a lottery to be able to buy one of these watches because they're so they're like spaceships. We've talked about them before. They're really really crazy and I got their lowest price one and I only wear it on special occasions. But it's it's interesting that Chanelle.

Dies see and just look at it and glaze her groove lands at it all right. Speaking of things that often have high prices though, vintage car sales, and we want to bring in kind of Elliott, who covers all things auto for us. She's our autocolumnist here at Pursuits. You're a member of your team. Yes, hey, Hanna, good

You know, it was a really interesting year this year at the auctions week long totals clothes around three hundred and seventy million dollars across five auction houses, and that was down about eight percent from twenty twenty three. And it was well off, you know, like just after COVID and twenty twenty one and twenty two the auction numbers were like way up above four hundred and fifty million dollars. So it things are down, and that freezer burn term

So it's a mix.

And what we saw was, yeah, maybe it's a I don't know what to say. No one was saying panic, but it's things are slowing down.

It's an interesting time in this collectibles market across categories actually watches too, and and art obviously, and Hannah talked about this on her great podcast Hot Pursuit. People don't know what's going to happen with interest rates. Maybe now it's not the time. You know, even very very rich people are affected by interest rates when it comes to real estate and buying art and just lend it, borrowing

Yeah.

And I would also say for cars too, just the geopolitical climate in Europe, does it affects how things are moving in Europe and there is a trickle down effect to how things are moving in the US. For instance, some of these cars, some of the big you know Ferraris and Alpha Romeos, those are actually cars that have

I really love too that you get into how it's kind of a transitional market for cars. I guess, you know, the really old, great vintage cars from the fifties and the sixties, but that some of the newer stuff actually is what is selling Is that kind of a fair takeaway.

Yeah, that's a really fair takeaway. It's been really interesting to see. You know, we all remember when, you know, the air cooled porches on the sixties were quite hot a several years ago in particular, and even those are cooling off a little bit in favor of this new generation of buyer who wants something a little more drivable. Dare I say, something a little bit more modern? And you know, if you were a kid in the nineties, yeah, the poster on your wall was like maybe a Ferrari

Oh my god.

Well, you can read all about the specifics and what what did sell to in some of the numbers and go really through it. Just check out Hannah's column. You can find it on the Bloomberg and also Bloomberg dot com or thanks to Bloomberg News. Auto columnist Hannah Elliott also co hosts of the podcast Hot Pursuit and the editor of Bloomberg Pursuits as always our Chris Rouser, and that wraps up the weekend edition of Bloomberg Business Week from Bloomberg Radio. Thank you so much for joining us.

This is the Bloomberg Business Week podcast. Avail little on Apple, Spotify, and anywhere else you get your podcast. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal