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