SRG's Flickinger on Walmart: Best Leadership in 20 Years(Audio)

of one percent. Down Industrial is up seven a gain of less than point one percent. The ten year up four or thirty seconds, the yield on the tenure one point five three percent. Gold up nine sixty ounce, the thirteen fifty four a gain of seven tenths of one percent. Crude oil West Texas Intermediate now officially in a bowl market up a dollar forty one twenty for West Texas

Intermediate up now by three percent. Brent crude above fifty dollars up one point nine percent, fifty dollars seventies seven cents on Brent. I'm Charlie Pallett, and that's a bloom Bred business Flash. You're listening to Taking Stock with Kathleen and Pim Fox on Bloomberg Radio. Walmart good news for shareholders, for company managers and all employees. I assume increasing in saniel earnings forecast after second quarter results topped analyst estimates.

Is this assigned the world's largest retailer is pulling business away from rivals like a target where we want to talk about this and so much more. Walmart acquiring Jet dot Com. It's attempt to compete with Amazon even more aggressively when it comes to online shopping. Walmart shares up a dollar thirty six cents at seventy four dollars and twenty nine cents. Bert Flickinger joins this managing director Strategic Resource Group. He's back in our New York studio with

us today. Bert, welcome, Thank you so Walmart. How good is the good news? It's good news because Walmart has good leadership for the first time in nearly twenty years. Kathleen, So, with good leadership, it's taking a long time to turn the company around, but with eighth straight quarters of positive same store sales, as you and Pim references I heard driving up from Philadelphia, Walmart's gain is Targets pain the offering at Walmart has it changed. I was looking at

things like organic food groceries. They seem to be doing much better in terms of providing those kinds of products to customers than Target. That's what we're looking at PIM is organic local farmers, looking at hydroponic bringing in the destination demand daily, particularly for millennials, young adults that are

focused on fresh. The other thing that the leadership really deserves a lot of credit for is being the first team at Walmart after fifty years of failure in basic fashion to finally fix basic fashion, especially for young girls, young boys. And Targets had some failings in fashion again, Walmart's game Walmart. You know, but you've been on the show, Uh even on her Big Friend of radio and TV here at Bloomberg. Where is Walmart now? He said, for the best management they've had in years, So we can

understand better Jet dot Com that acquisition. But you know, so recently it's it's holiday shopping, it's Christmas Eve, and the shocks, the stocks aren't the shelves aren't stocked. We've we've seen that as as part of Walmart. We've seen them built. These new stores are supposed to appeal more for shoppers and they don't. Necessarily, what else do they have to do? Let's let's besides build up Jet dot

Com and compete with Amazon Kathleen. As you and PIM have always said, leadership makes a difference in retail, and you and PIM and Bloomberg have been uniquely successful in making individual and institutional investors a lot of money. And when there is a major leadership change Frank Blake replacing bobner Delhi at Home Depot for example, um Richard Baker and his team coming in at Hudson Bay taking over Sex Fifth Avenue, Lord and Taylor's, etcetera expanding out Sex

Off five. When when you have better leadership like Doug McMillan and Greg farrand at Walmart. Target has good leadership in Brian Cornell, but Brian's cleaning up the problems of Hien passed along by his two predecessor and bad boards for fifteen years. Uh So with so with Walmart, what what you have is is what you and Pen reference from UH fresh food to fashion. UH they're winning for

the first time. And what Walmart does with the new team they look at investing in fresh, they look at investing in stocking the shelves issue reference, they look at investing in fashion. They don't look at that as an expense.

Targets still outsourcing. Looking at everything, it's an expense. Walmart's investing in people for the first time literally since Sam Walton started the company, and that investment is paying off because there's no expense mentality and there isn't as much of an expense mentality back in bent Bentville at the home office. These days, UM two point seven billion dollars spent on training and wages for the Walmart sales force. What drives traffic into stores? It doesn't have to be

just Walmart. But I'm curious, because you're an expert in this, what gets people to go into the store, because traffic and Walmart much better than traffic and Target. It's it's

what your referenced in the brake pain it's local. So for example, we'll be going through Mississippi and we'll see UM Walmart separated, so they'll have the licensed merchandise for Mississippi State, Southern Mississippi versus Old miss some l s U on one border some Alabama and Auburn on the other border across merchandise between apparel, licensed food and Target had been great at it, but as we talked at the turn of the year, uh, Target really forgot to

market and merchandise Christmas this year and their stores they had more tires than Christmas trees and honekah lights and in some of their ads, and Walmart's getting back to that rhythm of retail and understanding the detail of retailing. At Kathleen's point, they actually have product in the stores between Friday and Sunday when they do sixties seventy percent of their business. That's the first since really the turn

the turn of the century, going back to about two thousand. Well, you know, I just want to ask you about something that Brian Sazzi was writing about yesterday, suggesting that even though t J Max just had another sexy quarter, especially relative to its struggling department store arrivals like Me Season Coals, this could be a good time for investors to head

for the exit doors. Yeah. T J acts a lot of respect for Ben Camarado, the founder of Start right next to Spags and Worcester Carol Meyer Woods has done an exceptional job Brian's correct. It's it's it's building out towards scale. The better investment is the ones that are still going more from multi regional and national national. Burlington's Center had a really good run. Ross is trying to trying to run off off Price. Really is where all

the action is. Luxury and prestige really struggling. Uh, nationally and internationally. UH. Brian, to his credit also, UH was one of the first, along with the three of us to call the turn on J. C. Penny too. So H with with what Penny is doing and expanding Sephora, with the exclusivity and what Penny is doing with the Disney Co exclusives. Uh, that's one of the few bright

spots in department store retail today too. How about it characterize urban outfitters, UH, lover ran outfitters, American Eagle, good leadership, good merchants, UH. People people from Great Lakes Great Lakes region to really get after retail, understand understand the trends. UH. If they're going at an Ali's bargain basement to see what Ali's is selling, they're seeing what Mark Lassman selling in the Marks off Price store. Some of the highest

volume stores unique primarily to the greater Cleveland area. They follow everything in existence and rarely understand teens. Teens want want to be forward in unique in terms in terms of fashion, and they don't want to have that chiseld cultured look of Abercrombie and Abercrombie's sister company, Solistera, etcetera. So do you agree with Pim Fox, who I think believes that brick and mortar is going to be completely giving way to e commerce that no one, you know,

especially the younger generation. They get their brown boxes and they're happy and they don't mind sending stuff back. And as as the time passes and the generations you know shift, that there won't be brick and mortar left. As as as we've talked to in the last year, there's this accelerating retail ice age pen identifier with the Shaving Club, and there's a real ticking time bomb as uh you talked about earlier in your show with a JP Morgan report.

They're one point two million fewer people working at bricks based retail. They're not spending the money in the stores, Customer counts as Target reported yesterday, really cratering. There's gonna be a real crisis in terms of sales tax revenue as well as property tax revenue and public sector budgets are are going to be going through a lot of pain. And pim Pim's correct. The B and C malls Uh, The C malls will be ghost towns. Uh. The B

malls will have high vacancy rates. And retailer is we knew it in the twentieth century won't really be there ten years from now, probably five years from now. Amazon growing twenty five billion a year. That's the size of Macy's and Bloomingdale's combined in total. L Brands, the parent company of Victoria Secrets, streamlining their offerings active where, sleepwear, and so on, but also promotional strategy. The shares of L Brands up almost five percent today. What do you

think of Leslie Westerns L Brands? Leslie's always been able to rebound. He's one of the last really brilliant merchants working today that's been successful every every decade acrosses operating companies from quote unquote the Limited to VSS or Victoria's Secret. So L Brands has a lot of room to run as well. Just did a nutshell strong enough consumer? Is

there enough paycheck growth. Is there enough everything to keep consumer growing, because this is certainly one of the biggest factors for no matter how smart you as a retailer, people gotta be shopping. Not enough paycheck growth. In the ten monthly consumers spending categories, consumers are spending more and nine and the ten everything from rent to health, healthcare tuitions, loan's credit, et cetera. So as otto goes down, retails

going down, consumers getting crushed, consumers getting crushed. Well, we'll just have to leave it there for now. There's a lot of shopping though, right, I need retail therapy. Is this depressing? I'm gonna buy something him? All right, you helped the economy. Bert Flickinger, Managing director, Strategic Resource Group, thank you very much. He can be followed on Twitter at Bert Underscore Flickinger. Take you through to the clothes. This is Bloomberg