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tv   Taking Stock With Pimm Fox  Bloomberg  August 13, 2014 9:00pm-10:01pm EDT

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forhis is taking stock wednesday, august 13, 2014. today's theme it is rebuilding. macy's looking to rebuild, the company cut its annual sales forecast. we will talk about the state of the u.s. retail business. this is a company that makes the materials for your home. the chief executive has rebuilt the company from the ground up. you will hear from the owner of the american expedition vehicles. these are custom made off-road
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vehicles and they are helping to rebuild the detroit auto industry. we start with cisco, the fourth-quarter sales beat analyst estimates. the interdiction of new profits -- the introduction of new profit starting to boost sales. entertainmentorld fell to a record low. it felt nearly 33%. the company's latest earnings missed analyst estimates. the controversy over its treatment of wales in theme park shows heard attendance. decline asrevenue to much as 7% for the year. bill ackman is seeking to raise money in an ipo this year. he is currently waging campaigns against companies such as herbal
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life -- herbalife. those are the top headlines. >> to the latest on gaza, we are getting word that hamas has agreed to accept a 72 hour extension of the cease-fire agreement. this according to hamas tv in gaza. latest you are hearing from the negotiations and reports of rocket fire? .> good evening the palestinian representative in cairo speaking a few minutes hamas has agreed to a five day cease-fire extension. anminutes ago, a quarter of hour before the cease-fire would end, three rockets reported
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landing in southern israel. another rocket about an hour and a half ago. it is very unclear whether the cease-fire is going to hold, whether the israelis will respond. the official cease-fire ends around now. whether this extension will hold, we will have to wait and see. bucks you spend some time near the border with gaza. -- >> you spent some time you're the border with gaza. what did you find there? >> a lot of businesses have seen a real loss of productivity. that has been the main result of this latest conflict. a lot of the owners said they have not been able to come back to work. shipsave had to cut the and send people home early -- shifts and send people home early. the big concern is the commute.
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withinly, bomb shelter 10 or 15 seconds of you. >> what do these business owners tell you they intend to do in order to deal with the current situation? said thisf them have is the third conflict in six years. they have invested a lot of money in things like bomb shelters. you need to be within about 10 or 15 seconds of one when you are in that part of southern israel. encourageooking to their customers to spend more now, to pay them early. all of these things to protect their bottom line. continue.ike it will >> based on the interviews you have been able to conduct, give us an idea of public opinion in israel and its relationship to prime minister netanyahu.
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peaceryone says they want . what does peace constitute? there is a definite distinction veryen those who are approving of israel's government policy and those who say they need to do more and need to give way more to the negotiations. it is a mixed bag, to be honest. kind ofus what individual experiences you've had on making this journey. israel,in the south of where this rocket fire tends to be targeted, everyday life is a bit unusual. offices where people are showing me debris from the missiles shot down by the iron dome system. bomb shelters everywhere. people have been moving away with their families for weeks at a time.
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stores are not been able to sell to people. been a substantial change over the last month. >> have you heard anything about the tunnels and the ongoing effort by israel to find these tunnels that have been dug from gaza to israel? the mainas been one of focuses of the operation, to find these tunnels and eliminate them. people telling me they are working on new solutions and techniques that will be able to identify these tunnels more readily. gaza islockade of lifted, things like concrete could be used for more of these tunnels. the families, the tunnels were the fair -- where the new terrifying fear for them. >> thank you very much, willem
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marx. an update on cisco. profit talking analyst estimates. cuts ofs announced job 8%, about 6000 jobs. the company also saying it will be taking charge of up to $700 million and that is in the first quarter. earnings per share would be $.51 a share to $.53 a share. we will follow the story. i will be talking to the head of the wine vineyard in long island. find out why long island is battling napa valley to have the title of winemaking capital of the country. from siberia to silicon valley, talk about social shopping with the founder and chief executive .f
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>> this is "taking stock" on bloomberg. analysts, they were disappointed. retail sales were little changed in macy's cut its sales forecast for the year. walmart, jcpenney, and nordstrom all report earnings tomorrow. for more on their fortune, what stern to greg johnson -- let's turn to greg johnson. always a pleasure to see you. what is going on with macy's? as well as aating canon and very difficult, choppy waters. -- as well as it can in very difficult, choppy waters. the consumerid,
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remains weak kneed him looking forward. they will have a good holiday. >> let me get your thoughts on each one. walmart? >> wal-mart is most reflective of the overall economy. five years ago, at the peak of the recession, walmart had 12% market share of the retail market. years, it is now down 100 basis points. >> who is taking market share? that has gained about 50 basis points with cosco.
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company.s they collectively gained about 25 basis points. the rest is spread out. that is why it is so important -- they have a new seo just a new ceo just starting, very important he turns the mothership around. >> tell me about nordstrom. >> you have to parse the business. the retail stores, their soft. they are doing ok, they had a pretty good anniversary sale. the real strength is in the off-price side of it and the nordstrom.com.,
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stores arell price little soft. >> jcpenney? a work iny is still progress, they lost about $5 billion under the ron johnson era. we think they will be ok ok.rrow, but only last time around, there was a 6%, in change. -- comp and change. they are still coming out of a very low base. >> kohl's? a choppyy have had performance for the last couple of years. we have 16 people across the country, we think they are beginning to turn the corner. they had a terrible q1. they will be improving off of that. it is not like the old days.
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>> you mentioned online when it came to nordstrom. i want to bring in the chief -- 11ive and founder million people all ready know about it. it is a show stroll -- social shopping app. wanelo's chief executive joins me now. great to have you with us. what it isibed correctly? >> of global marketplace curated by people. it brings together all the stores and products that we know when to a single platform. >> how does it do something that i cannot get going to the website of a major department store? moving tors are
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mobile, spending three hours on their found per day, spending over an hour on social networks per day. elo is a social experiment -- social experience that consumers are searching for. >> how do you strike agreements with all of these different retailers? do they feel they are taking sales away from them? >> retailers are very excited about the traffic we are sending them and the sales we are sending them. it is the highest converting social network to retailers such as urban outfitters. excited ande torace this opportunity market to the consumers in a new way. >> tell us about how many subscribers you have and what they can actually do if they
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become loyal customers. users.ave millions of mostve organized the amazing products online, single place. -- from a single place. >> what kind of advantage do you get by buying something on wanel o? >> it exposes you to products and stores that you would not have otherwise found. we bring together all of the stores on your phone at a single location. it is a single place to discover products from different stores. >> greg johnson, i want you to come in on this topic and address what someone at macy's or walmart, what would their reaction be?
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>> shoppers that any one of -- if you are an , isn outfitters shopper there a monetary advantage to o versus through wanel directly at the urban site? >> no difference necessarily? right. the difference is not in the price. the difference is in the overall experience. we are just about an amazing discovery experience that helps you find the urban outfitters product. it is really just about how are you going to find the retailers product. that is precisely the point.
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replacement for advertising. >> the other side of the client, i would be interesting -- other side of the coin, how does the business model work for them? how does the retailer make money? sales.rive real for theportant retailers to be where their consumer is. platform that is 100% focused on product. high.sion is really we make a commission on the product sales. we know that we need to make moreexperience a lot frictionless. >> thank you for joining us. as a reminder, you can find the
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story along with other technology stories, all on our website at bloomberg.com. , we will speak to the chief executive who was able to dig his company out of eight a30 million whole -- out of $130 million hole. ♪
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>> this is "taking stock" on bloomberg. like many companies connected with the housing industry, the financial crisis offered tough times to trex. they have made a turnaround. me now.an joins it is a pleasure. you and i got to meet about four years ago and a lot has happened
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since then. give people an overview as to ex has gone through. >> the turnaround has been very successful. we've brought together a team of operators as opposed to marketers. since you and i met, our sales have grown, we are selling in 38 countries. we're exporting from the united states. we have totally reinvigorated the offering. we offer product now that we guarantee will not fade or stay. -- stain. it enabled us to take major market share. guarantees it will not fade.
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these are major rockets to propel the growth. we reduced the inventory dramatically by 75% and reduced the capital employed and expanded the margin 11 basis points. the stock price has gone up several hundred percent. >> tommy about -- tell me about the financing the company offers people who are looking to put together these kinds of repairs. >> we offer a nonrecourse finance program. to be honest with you, it was met with marginal success. most of the deck buyers continue to pay cash. >> i want you to tell me about cash flow. prodigiousw has been
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. we started deeply in debt and then we became debt-free. buyback.$75 million nowave a little -- we are funding our own capital expenditures for the new industry we have entered and we are a debt-free company. >> what would you like to see over the next 6-8 months? >> we continue to take market share. >> last year, 340 million in sales. millionuidance of 92 for q3. we are on the right path. we are not too concerned about the highs and market. we are not really directly related to the housing market, only five or 10% of our sales go into new housing. evil extending the living space
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of their house -- people extending the living space of their house. >> we have to leave it there. thank you very much. this is taking stock on bloomberg. ♪ thank you very much. this is taking stock on bloomberg. ♪
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>> this is "taking stock" on bloomberg. i want to go right to su keenan. >> some of europe's biggest drugmaker's are among the bidders for the u.s. biotech company. clock so smithkline is also said to be -- glaxosmithkline is also said to be in the bidding. earlier we reported that cisco's fourth-quarter sales topped analyst estimates.
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cisco plans to cut a percent of its workforce -- 8% of its workforce. it will be taking charges the sheer of up to $700 million -- this year of up to $700 million. new jersey governor chris christie announced he will convene a summit of state and local leaders to discuss the future of atlantic city's. the total number closing the to four.4 -- this year stay with bloomberg television as trish regan reports live from atlantic city. that is tomorrow, beginning at 8:00 eastern. has bloomberg news report reignited the debate over the
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safety of a substance called -- over a substance. it has been linked to cancer cell growth. you can still find it in some products. colgate stands by its products. .ther retailers, not so sure our nextell us more, guest. thank you for being here. tell us the news. .hat is going on with triclosan >> this chemical, we do not know what it does in humans, but it is causing some scary reactions and animals. a lot of companies are phasing it out of their products. colgate has it in one of their toothpastes. they claim this is one of the most rigorously tested
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toothpastes on the market. they have been responding to people on twitter and even a youtube video. a lot of consumers are upset. >> what does triclosan do? fluorides as a kind of and helps to clean the teeth. they are saying it is a differentiator in their products. countries banher triclosan? regulatedan has been all around the world. many european retailers and manufacturers have been phasing it out. who is merging with walgreens, they are committed to phasing out this chemical a few years ago. here in the states, walgreens allows its use. >> do we have definitive
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scientific evidence from various countries like the u.k. that say triclosan is bad for you? >> there is a growing body of scientific evidence that has shown that triclosan is a chemical that is hazardous at very low levels of exposure. it can interfere and disrupt the hormones in our bodies, testosterone, for example. these hormones play an important part in regulating our systems. you will have problems down the road like developmental disabilities, autism, infertility. even small levels of exposure can be harmful to public health. many major brands, including procter & gamble, have gotten it out of their toothpastes. colgate total continues to defend this hazardous chemical.
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independent,any maybe the american association of dentist's, the fda, isn't there someone who can say, this is safe or not safe? >> the fda has done a lot of testing. >> how long does this debate go back? >> 15 years ago, when colgate was first testing the product, it has to be screened by the fda. eight lot ofs on on a lot ofsored -- company-sponsored research. has this been tested by an objective scientific organization? definitive danno on the chemical -- definitive ban on the chemical. >> what kind of financial affect
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would have? answer.not know the we have been trying to ask colgate. it could have business implications. it could hurt their business. i do not know if taking out the chemical is very difficult. there is not necessarily one product a camera plate -- can replace this chemical. it could be a long process. said. heard what mike triclosan toothpaste in the u.k. what about stores here? >> retailers are pretty conscious about saying we will not carry products that have triclosan in them. when we stride to speak with walmart -- let me try to speak with walmart and target, they
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are waiting to see how this unfolds. to my knowledge, no one has said , we will no longer carry projects -- products that carry triclosan. >> what has been the reaction from retailers? >> we launched a mind the store campaign. to ensure the products they sell are safe and non-toxic. studies have shown that triclosan is hazardous at low levels of exposure. many major brands, or including johnson & johnson, have admitted to using this chemical. we are calling on top retailers to use their purchasing power and call on colgate to eliminate this unnecessary and dangerous chemical. the scientific evidence has shown that risks far outweigh the benefits. >> what has been the reaction
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from retailers? >> since we launched the campaign, walmart and target have announced policies to work with their suppliers to reduce, disclose, and work to eliminate dangerous chemicals in their supply chains. those companies have developed lists of over 1000 chemicals of concern. it is not clear whether triclosan is one of the chemicals. we are calling on walmart and target to add triclosan to their priority list. we are calling on walgreens to join them. >> i want to thank you very much. talking about triclosan and colgate. i will talk to the owner of a vehicle company that builds jeeps you can drive through
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snowstorms, and skill mountains. that is next on taking stock. ♪
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snowcapped mountains. mike collins joins us from detroit. tell people about american expedition vehicles. what kind of vehicles do you make? >> we make aftermarket parts for the jeep wrangler. we will be introducing parts on the ram pickup as well.
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>> if i could use some of these components, what kind of wrangler carpet together? click -- could i put together? >> we will put things like the suspension, front bumper, rear -- a lot ofan put things we can do. we can take a four-door wrangler and turn it into a pickup. >> described the double cap. -- describe the double cab, exact same feel the as the four-door wrangler. we cut the vehicle behind the back seat. we replace it with a pick up and. we stretch the vehicle 39
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inches. >> what kind of demand have you had for these vehicles? >> man has been fantastic. fantastic.as been -- it is probably a one to two month backlog. >> tell me about the capabilities in terms of traversing rivers and going up the side of mountains. >> jeep has made a fantastic vehicle in the wrangler, which came out in 2007. we just enhanced it. in terms of fording rivers, the clearance helps you. we have a snorkel that will allow the engine to get air intake from above the top of the
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windshield so that if you are fueling a river, water will not get into the air intake for the engine. it is a capable vehicle to start with. capability does this cost? >> some folks will start one part at a time and do the work themselves. our standard package, which would be front and rear bumpers, tire carrier, tires, wheels, 40,000t will be in the -- $14,000 range. some folks start out a few hundred dollars at a time. >> where does this all come together?
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>> we do what we call upfit the vehicle. we sell three parts to customers for every part we put on a vehicle. the do-it-yourself folks, that is great. if they want us to put the parts on the vehicle, that happens here just outside of detroit. >> your background is in finance . you have worked in private equity, worked for banks, how did you make this transition to this off-road vehicle? >> i business partner and i were involved in a lot of things. partner started american expedition vehicles in 19 97 and
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we came along and said, with a new addition wrangler, we would like to help you. we can bring some of the manufacturing over to detroit, you cannot get things done anywhere that you can get done in detroit. the combination has worked out well. it has been a great success for all of us. >> what about your expansion plans? building on our third in 3.5 years and we are looking for another one. we have the ram pickup we will be launching later this year. sales onantime, our the wrangler have exceeded 35% growth for each of the last five years. it is a good problem to have, but it is a problem we are dealing with and we are hiring. >> when mike collins goes off the road, what do you drive?
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lift witha 2.5 inch 35 inch all-terrain tires. it is a great everyday vehicle. i drive it on highways, but i take it off-road. vehiclegreat every day that is extremely capable, but thes a car you can drive on highway and feel very comfortable. >> what is the most outlandish ding someone has asked you to do to these vehicles? >> we like to stick to what we do. we consider our products to be a nice unified package that works well together. a lot of other folks do what we call snowflakes. our parts are designed to go together and work in harmony.
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we do not do a lot of crazy things. we make sure the vehicle works together well rather than to be unique and have something that is crazy. >> thank you very much. next, i will talk to the head winemaker of a long island vineyard. rolls-royce driving into the future with some high technology features. executive is going to be on bloomberg west. ♪
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>> this is "taking stock" on bloomberg. for itsand is known oceans and beaches, golf courses, and the hamptons. 1970, there were just six vineyards on long island. now there are over 60 licensed producers. i am joined by the head winemaker and the director of the long island long -- wine council. let's talk about the wine council. who would've thought there would be a wine council? >> the wine council's main focus is to promote the region. and represent the 60 members that we have. in the last 40 years, over 3000 acres, 500,000 cases. >> half a million cases by year.
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>> it seems like a lot, but it's not. >> where do you rank in terms of volume of production? >> most producers are 10,000 cases. >> tell us about the climate for growing grapes. >> the maritime climate, we are surrounded by the water. we get very little rainfall during the summer. the grapevines love it. >> tell us about james port. father.s founded by my we produce about 10 different varieties. leadersrt is one of the out there and producing high-quality wines. >> is the production, the growing of these different variety of grapes special to
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long island? >> i joke with my father all the time. we have a lot of pallets out there that want diversity. we have to figure out what really does work there for us. we are starting to horn in on different friday's the work best for us -- different varieties that works best for us. >> how these -- how do you describe the soil? >> it has a lot of good drainage. depending on where you are, that is the critical part. >> what about the cost of making wine? you have competition. real estate and tourists. >> that is the beauty of what we do, trying to protect the natural beauty of the area.
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on the is a big pressure area. we are trying to do things in there that most areas do not have the luxuries. we have the harvest east end which is about representing the east end. that is august 23. it is where the culmination of all of the wineries get together with the local chefs. >> give us a words about each of the bottles you brought. >> the one friday that works well if cap vernet from -- the ones variety that works well is franc.t we make a proprietor blend, we make about four or five of those. >> thank you very much, well done. he is the director of the long island wine council.
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thank you for taking stock. ♪
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