Latest / What the Flux / Myer's honeymoon is over | Kmart's bold plans | OpenAI's acquires unknown company for $6.5 billion

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Myer's honeymoon is over | Kmart's bold plans | OpenAI's acquires unknown company for $6.5 billion · What the Flux

• 0:05
  Speaker 1: This is what the Flux. I'm Brett and I'm Justin
• 0:07
  Speaker 1: and an undated twenty sixth of Bay Jazzy Boy.
• 0:10
  Speaker 2: Telstra has quietly removed some of the claims that made
• 0:12
  Speaker 2: about it to mobile coverage because apparently those claims were overstated.
• 0:16
  Speaker 2: You know how Telstra claims to provide coverage to ninety
• 0:19
  Speaker 2: eight point eight percent of Australias. Well, that coverage isn't
• 0:22
  Speaker 2: available on mobile phones, only on antenna's, which as far
• 0:25
  Speaker 2: as I know, nobody uses. So now Telster's wholesale customers
• 0:30
  Speaker 2: like Audin Woolworth's have all pulled the reference as well.
• 0:32
  Speaker 1: Pull out my antenna right now, be man, flux Man.
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  Speaker 3: Every single year you probably pay a loyalty tax to
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  Speaker 3: your bank, to your utilities provider, and even your internet
• 0:41
  Speaker 3: as well. That's because every year you stay with the
• 0:43
  Speaker 3: same provider, they jack up the prices. In this month's
• 0:46
  Speaker 3: Academy Getting a better Deal, we did you how to
• 0:48
  Speaker 3: stand up for yourself and save some serious cash. Make
• 0:50
  Speaker 3: sure to download the Flux app and check out the
• 0:52
  Speaker 3: academy this month.
• 0:53
  Speaker 2: Three high probability stories Today Juzzy Boy, Let's do it
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  Speaker 2: for our first. Meyer has worn that its second half
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  Speaker 2: is off to a bit of a wonky start and
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  Speaker 2: its nine hundred million dollar acquisition ain't delivering the goods.
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  Speaker 1: Thought these two would still be in the honeymoon period, Piphann,
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  Speaker 1: what is going on here?
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  Speaker 2: Well, Mayer is one of Australia's oldest department stores, dating
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  Speaker 2: back to nineteen hundred, pre federation.
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  Speaker 1: Abi Man. You may remember that earlier this year, Maya
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  Speaker 1: acquired apparel brands from Premier Investments for nine hundred million
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  Speaker 1: baccarunis I do so.
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  Speaker 2: Now they own over seven hundred retail stores with brands
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  Speaker 2: like Just Jean's, Dotty, Jjy's, All Your Favorites uh huh,
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  Speaker 2: and Jazyboy. Now, just sixteen weeks into the year, the
• 1:31
  Speaker 2: wedding glow is fading.
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  Speaker 1: Ye. Well, Maya's department store sales were up just one
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  Speaker 1: point nine percent. It's new retailers from apparel brands saw
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  Speaker 1: their revenue all three point nine percent.
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  Speaker 2: Not exactly love at first profit and lost statement and.
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  Speaker 1: B Man Meya blamed everything under the sun for their
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  Speaker 1: slower performance.
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  Speaker 2: Well, it was cost of living pressures.
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  Speaker 1: Then it was the May federal election.
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  Speaker 2: Then it was intense discounting, and finally.
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  Speaker 1: It was the issues with their warehouse and logistics, which
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  Speaker 1: still isn't resultd.
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  Speaker 2: So investors are now watching loosely to see if Maya's
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  Speaker 2: nine hundred million dollar acquisition strategy will pay off.
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  Speaker 1: And it's not so easy to ensure a smooth transition
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  Speaker 1: when your whole warehouse system is falling to pieces behind
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  Speaker 1: the scenes.
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  Speaker 2: So what is the key learning here?
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  Speaker 1: Retail might look flashy on the outside, behind the scenes,
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  Speaker 1: it's all about getting the basics.
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  Speaker 2: Right, and one of the most important basics a warehouse
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  Speaker 2: that actually works.
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  Speaker 1: You see, b Man Maya's fancy new distribution center was
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  Speaker 1: meant to be a game changer, but instead it has
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  Speaker 1: been a total disaster.
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  Speaker 2: They've had issues with stock trapped in.
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  Speaker 1: The warehouse AKAA, the Bermuda triangle of stock. They've had
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  Speaker 1: delayed deliveries, and they've had to resort to online orders
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  Speaker 1: being picked by instore Star from instore Stock and Juzyboit.
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  Speaker 2: Maya reckons those issues have already cost them about twelve
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  Speaker 2: million dollars in lost earnings, and that's just for the
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  Speaker 2: first half of twenty twenty five alone.
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  Speaker 1: And when you're trying to integrate a big acquisition like
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  Speaker 1: seven hundred news stores as well. A bungled warehouse is
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  Speaker 1: the last thing you need for our second story.
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  Speaker 2: Kmart's new boss wants to double its sales to twenty
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  Speaker 2: billion dollars and she is betting big on beauty, younger
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  Speaker 2: shoppers and Anko in order to get there.
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  Speaker 1: God bless Anko. And it's cheap, cheap air fryers. So
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  Speaker 1: tell me more.
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  Speaker 2: Well, Kmart is actually owned by the Kmart Group, which
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  Speaker 2: also runs Target and the Ancho brand.
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  Speaker 1: And Kmart Group is actually owned by West Farmers, the
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  Speaker 1: group that also owns Bunning's office works and a whole
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  Speaker 1: lot more.
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  Speaker 2: Now, jes it wait. West Farmer's introduced a new managing
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  Speaker 2: director for the Kmart Group in April this year, and
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  Speaker 2: she came in swinging.
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  Speaker 1: She announced grand plans to double kmart sales to twenty
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  Speaker 1: billion dollars in ten years.
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  Speaker 2: And okay, how is she planning to grow Kmart's revenue.
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  Speaker 1: Well, there's the standard stuff like expanding its online sales,
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  Speaker 1: focusing on younger shoppers, but one of the key drivers
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  Speaker 1: is expanding internationally. And be man, we're not talking about
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  Speaker 1: Kmart expanding internationally.
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  Speaker 2: I know, we're talking Anko itself as standalone brand.
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  Speaker 1: In fact, Beman Andko is already planning to have five
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  Speaker 1: standalone stores in the Philippines by the end of this
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  Speaker 1: year and then also expand NCO with partnerships. But be Man,
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  Speaker 1: the juiciest part is that Kmart's new MD doesn't just
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  Speaker 1: want twin tenty billion revenue.
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  Speaker 2: Nope, she's also planning for two billion dollars in profit two,
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  Speaker 2: which is a ten percent profit margin. Though what is
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  Speaker 2: the key learning here, Well, in retail, it's not just
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  Speaker 2: about how much stuff you sell, it's how fat your
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  Speaker 2: margin is.
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  Speaker 1: Most big retailers run on razor thin margins.
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  Speaker 2: For example, Coal's profit margin was two point six percent
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  Speaker 2: last year.
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  Speaker 1: JB Hygefire's was four point six percent.
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  Speaker 2: Meyer's profit was around one point six percent last year.
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  Speaker 1: The key to bigger profit margins, b Man home brands
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  Speaker 1: like Ancho.
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  Speaker 2: It means that Kmart doesn't have to share profits with suppliers.
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  Speaker 1: And by selling Ancho overseas, they aiming to scale those
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  Speaker 1: higher margin products globally.
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  Speaker 2: And joseybod Kmart isn't only pushing Ancho overseas.
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  Speaker 1: No. Ancho now makes up eighty five percent of kmart
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  Speaker 1: sales in Australia too.
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  Speaker 2: In fact, it sells over one billion items a year.
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  Speaker 1: That's a whole lot of collapsible storage cubes and ring lights.
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  Speaker 2: So with Ancho leading the charge for Kmart, it's not
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  Speaker 2: only helping Kmart grow it's revenue, but also it's profits.
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  Speaker 1: For our third and final story, open ai just spent
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  Speaker 1: six and a half billion US dollars acquiring us up
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  Speaker 1: with no product and no revenue, but everyone's excited. Big
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  Speaker 1: bold call by open Ai. So juzyboy, what is going
• 5:07
  Speaker 1: on here? Let's take a stroll down gadget, memory Lane,
• 5:09
  Speaker 1: go on, the.
• 5:10
  Speaker 2: iPhone, the Apple Watch, the iPad, all quite iconic gadgets
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  Speaker 2: and all.
• 5:14
  Speaker 1: Of these were designed by one man. Sir Johnny I've
• 5:17
  Speaker 1: aka Steve Jobs spiritual partner.
• 5:20
  Speaker 2: Yeah, he's been considered the guru of smartphone and tech
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  Speaker 2: design and Biman Ives left Apple in twenty nineteen and
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  Speaker 2: started a company called Io last year. And be man,
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  Speaker 2: it's not entirely.
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  Speaker 1: Clear what Io have or haven't built so far, but
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  Speaker 1: now open ai will acquire Io in a six and
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  Speaker 1: a half billion US dollar all stock deal.
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  Speaker 2: And juzy boy, this is open AI's biggest acquisition ever.
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  Speaker 1: Ives and the open AICEO say they're working on a
• 5:44
  Speaker 1: family of devices for the aiage.
• 5:46
  Speaker 2: And the first product is expected next year.
• 5:49
  Speaker 1: And while we don't have any details on the product,
• 5:51
  Speaker 1: we do know that open ai will bring over fifty
• 5:53
  Speaker 1: five engineers and designers from Io.
• 5:56
  Speaker 2: With many who help shape Apple's devices. So what is
• 5:58
  Speaker 2: the key learning here and Acqua higher is when a
• 6:01
  Speaker 2: company buys another company not just for its products, but
• 6:04
  Speaker 2: for its people.
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  Speaker 1: It's become pretty comedy tech, especially when you need a
• 6:07
  Speaker 1: shortcut building a top tier team. In this case, b Man,
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  Speaker 1: open Ai is buying access to one of the most
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  Speaker 1: iconic industrial designers of all time, and that's a huge
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  Speaker 1: advantage when trying to launch AI powered hardware devices.
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  Speaker 2: Particularly because open ai doesn't have that skill set right now.
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  Speaker 1: That alone sent Apple share price down two point three percent.
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  Speaker 2: Investors are clearly thinking, wait, what if this new crew
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  Speaker 2: actually does build the next iPhone but for AI. So
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  Speaker 2: only time will tell whether this acquisition was a stroke
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  Speaker 2: of genius or making a big bet on potential.
• 6:38
  Speaker 1: Alan Flex AMM If you feel like you're getting ripped
• 6:40
  Speaker 1: off left, right and center from an Internet provider, a
• 6:42
  Speaker 1: phone provider, even your lender, the Flex Academy this month
• 6:45
  Speaker 1: is your Bible. It'll give you the scripts on how
• 6:47
  Speaker 1: to communicate with them, how to negotiate with them, and
• 6:49
  Speaker 1: how to get a better deal. Make sure to download
• 6:51
  Speaker 1: the Flux app and check out in the Academy.
• 6:53
  Speaker 2: Thanks for listening and we'll see you on Wednesday.