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Resilience Of The Restaurant Industry: Jim Hyatt · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day, we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
• 0:11
  Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
• 0:15
  Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. I want to talk
• 0:22
  Speaker 1: a little bit about the reopening trade. Um, what it's
• 0:25
  Speaker 1: like if you operate restaurants, especially around business areas, and
• 0:30
  Speaker 1: how difficult it can be to hire employees. For that,
• 0:34
  Speaker 1: we go to Jim Hyatt. He is the CEO of
• 0:36
  Speaker 1: California Pizza Kitchen. I know well because, Um, when I
• 0:40
  Speaker 1: worked at seven thirty one Lexington Avenue, there was one
• 0:42
  Speaker 1: around the corner that I went to all the time. Um, Jim,
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  Speaker 1: what's what's it like now after the most unprecedented business
• 0:51
  Speaker 1: event in our history? UM, I think it's safe to
• 0:55
  Speaker 1: say that, right, what's it like reopening your restaurants around then? Dream? Well,
• 1:02
  Speaker 1: come on and tell you. Yeah, it's kind of a
• 1:03
  Speaker 1: one two punch, right. I mean, covid UH gave us
• 1:06
  Speaker 1: an unprecedented challenge, clearly, and I think everybody's recovering through that.
• 1:12
  Speaker 1: I know, we're happy with how we're bouncing through that
• 1:15
  Speaker 1: and coming on the other side. But now you have
• 1:18
  Speaker 1: the staffing, which clearly is a struggle for the industry,
• 1:21
  Speaker 1: and it's a little different challenge maybe by state, so
• 1:25
  Speaker 1: they're not all equal in a way, but you know,
• 1:28
  Speaker 1: we're all weather through that too. It's got two or
• 1:30
  Speaker 1: three months probably and then it will calm down. But uh,
• 1:33
  Speaker 1: you know, the restaurant business is tough. Will but tell
• 1:36
  Speaker 1: us what the staffing is, like, I mean, is it
• 1:38
  Speaker 1: is it just too difficult to find people that are
• 1:41
  Speaker 1: willing to come in? Are they getting paid too much
• 1:43
  Speaker 1: to stay on unemployment benefits? Are the health concern still
• 1:47
  Speaker 1: holding you back? What's the staffing issue? Well, it's clearly
• 1:51
  Speaker 1: the money is keeping people on the sidelines a bit, right,
• 1:53
  Speaker 1: kind of a self self inflicted process there, I think,
• 1:57
  Speaker 1: kind of an unforced error maybe, but we've how to
• 2:00
  Speaker 1: deal with it, and each state is a little different.
• 2:02
  Speaker 1: We do have markets where we're fine. Um, we have
• 2:05
  Speaker 1: markets where when school let out, we got some servers back, right,
• 2:08
  Speaker 1: some of the college servers that we normally would employ
• 2:12
  Speaker 1: in our restaurants have come back to work with us
• 2:14
  Speaker 1: because uh, they enjoy where they are, and then others
• 2:17
  Speaker 1: where we have had to move people around frankly to
• 2:19
  Speaker 1: make sure we're covering shifts and taking care of consumers,
• 2:23
  Speaker 1: but it hasn't disrupted our operations by the time of
• 2:27
  Speaker 1: time of service or the times that we operate so
• 2:31
  Speaker 1: so far, I think c p K has weathered that
• 2:34
  Speaker 1: pretty well. But I think our starting point was really
• 2:36
  Speaker 1: pretty good. We're usually better than all the industry norms
• 2:40
  Speaker 1: on our retention numbers, so we maybe had a better
• 2:44
  Speaker 1: starting place than some of our restaurant friends. Hey, Jim,
• 2:47
  Speaker 1: I'd love to get a sense. I know you guys
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  Speaker 1: are you know, all over the place kind of the
• 2:51
  Speaker 1: regional side of the demand side of your business, and
• 2:55
  Speaker 1: we're in terms of you know, customer flow. Where are
• 2:58
  Speaker 1: you seeing to their strength and maybe where's it lagging
• 3:01
  Speaker 1: a little bit? Well, we were lagging a little bit
• 3:05
  Speaker 1: in California obviously because the restrictions. You know, we only
• 3:09
  Speaker 1: got our dining rooms back to kind of an unrestricted
• 3:13
  Speaker 1: level um last week actually, so that was a big
• 3:17
  Speaker 1: plus for us. And when you have the high number
• 3:19
  Speaker 1: of our the high percentage of restaurants that we have
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  Speaker 1: in the state of California. That was a challenge for us,
• 3:24
  Speaker 1: but we were fine and we're you know, we're over
• 3:27
  Speaker 1: our dred percent of nineteen sales and fighting to you know,
• 3:31
  Speaker 1: have good staffing where we need to operate. But uh,
• 3:35
  Speaker 1: it's clearly a tough environment right now, and that one
• 3:37
  Speaker 1: to punch that we kind of talked about earlier. But uh,
• 3:41
  Speaker 1: you know, we're gonna be fine. The restaurant industry is
• 3:44
  Speaker 1: gonna be fine. Will weather our way through this, and
• 3:46
  Speaker 1: we always have The restaurant space is not an easy space,
• 3:49
  Speaker 1: so it's no place for the timid. But what about pricing, Um,
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  Speaker 1: we've been reporting lately that food prices are at a
• 3:57
  Speaker 1: ten year high. Uh do you see that in your
• 4:00
  Speaker 1: input costs? Are you able to pass that through the consumers? Well,
• 4:04
  Speaker 1: we actually haven't passed it on the consumers in in
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  Speaker 1: a three year trend. We're really behind I think the
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  Speaker 1: norm out there. Of the price increasing that we've we've
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  Speaker 1: seen with our competitors, we feel like it's a very
• 4:17
  Speaker 1: difficult time to push that price along. Now, you know,
• 4:20
  Speaker 1: commodities are coming through the back door at a higher level,
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  Speaker 1: so we have to obviously respect that. But We're not
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  Speaker 1: an industry or a brand that's dependent on one one item,
• 4:31
  Speaker 1: and we're pretty blended on the menu. We're not you know,
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  Speaker 1: overly dependent on chicken or overly dependent on beef, or
• 4:37
  Speaker 1: overly dependent when corn goes crazy. So we have a
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  Speaker 1: very balanced menu and similar to what we're trying to
• 4:44
  Speaker 1: do now, we're launching even a new product, and we
• 4:46
  Speaker 1: haven't had any issues sourcing our products. We've had a
• 4:50
  Speaker 1: substitution here there because suppliers are challenged with staffing, which
• 4:55
  Speaker 1: is the effect again on the industry. But whether we're
• 4:58
  Speaker 1: delivering a new product now I like chickpea crusts, or
• 5:01
  Speaker 1: whether it's the old staples of our menu ingredients we've
• 5:05
  Speaker 1: actually whether that finds so far, we're you know, look,
• 5:09
  Speaker 1: pricing is gonna come. Chicken look like it started to
• 5:12
  Speaker 1: come down maybe today, even a little lower price. But
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  Speaker 1: on the other side, we're waiting on the fuel costs
• 5:18
  Speaker 1: to go back up, right, We're waiting at that price
• 5:20
  Speaker 1: to come back. Is it okay? Is it socially acceptable
• 5:24
  Speaker 1: for me to eat pineapple on my pizza? I love
• 5:28
  Speaker 1: a pizza Hawaii and people say it's a well, well,
• 5:35
  Speaker 1: you know what we find with innovation, which is what
• 5:37
  Speaker 1: we do. We bring innovation to the market. That's chickpea,
• 5:40
  Speaker 1: which we're inducing now. It's on top of our cauliflower
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  Speaker 1: crust uh that we introduced in and it's on top
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  Speaker 1: of my favorites and other customers favorites. I get emails,
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  Speaker 1: you know, all week long from customers when are you
• 5:54
  Speaker 1: going to bring back something, something, something, And we try
• 5:56
  Speaker 1: to do that. But it's about innovation and everybody. It's
• 6:00
  Speaker 1: a little twist whether you want pineapple on yours or
• 6:02
  Speaker 1: whether you want a plant based chicken product all right
• 6:06
  Speaker 1: on your barbecue chicken substitution. Yeah, all right, Jim, thanks
• 6:09
  Speaker 1: so much. Jim high a California pizza kitchen. I'm a
• 6:12
  Speaker 1: big fan of their Monterey, California store. It's good stuff
• 6:14
  Speaker 1: down there. All right. We are going to talk right
• 6:20
  Speaker 1: now to Tyler Cowen about his piece on what his
• 6:24
  Speaker 1: crypto friends get wrong. Tyler, I absolutely love this piece
• 6:28
  Speaker 1: and I've been I'm talking about it all day long,
• 6:30
  Speaker 1: especially for your take on um bitcoin versus the dollar,
• 6:36
  Speaker 1: or really bitcoin versus smaller poorer rivals of the dollar.
• 6:41
  Speaker 1: But let's talk first about the price move. What do
• 6:44
  Speaker 1: you make of the drop alo thirty dollars. I don't
• 6:47
  Speaker 1: think any day today move in the price of crypto
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  Speaker 1: means very much. We need to set it aside and
• 6:53
  Speaker 1: think about the longer term. I do absolutely think crypto
• 6:57
  Speaker 1: is here to stay. But the exaggerated claims I or
• 7:00
  Speaker 1: from crypto advocates like the US will go bankrupt, the
• 7:03
  Speaker 1: dollar will disappear. I just think all that is flat wrong.
• 7:07
  Speaker 1: Crypto will become a normal asset that will be great,
• 7:10
  Speaker 1: It will have its place under the sun. But we
• 7:12
  Speaker 1: should start thinking about it that way. So, Tyler, as
• 7:16
  Speaker 1: it relates to bitcoin per se, since that's the one
• 7:18
  Speaker 1: in the in the news today, do you buy the
• 7:22
  Speaker 1: argument or do you understand it or believe the argument
• 7:25
  Speaker 1: that it is a store of value all our gold.
• 7:29
  Speaker 1: It is a store of value, But it and other
• 7:31
  Speaker 1: crypto assets are also ways of pulling off a particular
• 7:35
  Speaker 1: kind of decentralized transaction that we can't do with any
• 7:39
  Speaker 1: other kind of asset, And we just don't know right
• 7:42
  Speaker 1: now how valuable that set of transactions will be in
• 7:45
  Speaker 1: the future. So it's like looking at a startup that's
• 7:47
  Speaker 1: priced every day in the market. Uh, the price is
• 7:50
  Speaker 1: incredibly volatile. It will be volatile for some while, but
• 7:54
  Speaker 1: at some point we'll figure out what it's worth, and
• 7:57
  Speaker 1: then it will still go up and down, but it
• 7:59
  Speaker 1: will be like you Facebook stock. Another asset you point out.
• 8:05
  Speaker 1: The piece that really hit home for me was that
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  Speaker 1: you say, if anything, crypto is more likely to hurt
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  Speaker 1: currencies of countries that are doing poorly, like Venezuela. Fiat
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  Speaker 1: currency won't just go away, so over the long run,
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  Speaker 1: crypto could actually boost the value of the dollar by
• 8:22
  Speaker 1: stifling the rise of potential competitors. This is the point
• 8:26
  Speaker 1: that Mike McGlone has been making for a while as well,
• 8:29
  Speaker 1: Um from Bloomberg Intelligence, and I noticed today that Mark
• 8:33
  Speaker 1: Hudmore was talking about the implications of the feds hawkish
• 8:36
  Speaker 1: turn saying that it permits other central banks to be
• 8:39
  Speaker 1: slightly more hawkish, even propels some in that direction, and
• 8:42
  Speaker 1: the marginal move toward liquid tighter liquidity globally is basically
• 8:47
  Speaker 1: going to hurt things like cryptos and meme stocks. What
• 8:52
  Speaker 1: do you what do you make of that that the
• 8:55
  Speaker 1: US is the world's strongest country. The more the internet
• 8:59
  Speaker 1: in the English slang which spread that actually helps the
• 9:02
  Speaker 1: relative soft power of the United States. Our government collects
• 9:06
  Speaker 1: taxes in terms of dollars, that really is not going
• 9:09
  Speaker 1: to change. So there's just no reason to bet against
• 9:12
  Speaker 1: the dollar. But if you're a small country or your
• 9:15
  Speaker 1: currency is if the crypto is a real competitor. So
• 9:19
  Speaker 1: you could imagine some kind of future world where the
• 9:22
  Speaker 1: dollar is still the central reserve currency, but some form
• 9:25
  Speaker 1: of crypto is another central form of currency for other purposes,
• 9:29
  Speaker 1: such as putting off these particular kinds of decentralized transactions,
• 9:33
  Speaker 1: and that makes the dollar in crypto the big winners. Uh.
• 9:37
  Speaker 1: Why why do you think China's cracking down, or at
• 9:41
  Speaker 1: least it looks like they are. I'm never sure any
• 9:45
  Speaker 1: outsider understands China. Uh, it seems to me they view
• 9:50
  Speaker 1: it as an alternative power center, as a way that
• 9:53
  Speaker 1: people can evade their capital controls get money out of
• 9:56
  Speaker 1: the country. Now, in the past, the CCP has been,
• 9:59
  Speaker 1: in fact the promulgator of those uses of crypto. But
• 10:03
  Speaker 1: at some point maybe power has become so centralized in
• 10:06
  Speaker 1: the CCP that they want to put an end to this,
• 10:09
  Speaker 1: just as they are checking the power of their national
• 10:12
  Speaker 1: tech companies. But I would say, we don't know, Tyler.
• 10:16
  Speaker 1: So if if for those that want a less volatile
• 10:19
  Speaker 1: crypto space is it's is the recommendation. Where is the
• 10:22
  Speaker 1: thought It'll just take time, we will get weight. It
• 10:26
  Speaker 1: will take time. It's not coming next week. I don't
• 10:28
  Speaker 1: even think it's coming next year. But at some point
• 10:32
  Speaker 1: there will be a shakeout and we will either figure
• 10:34
  Speaker 1: out exactly what we can use crypto for or decide
• 10:37
  Speaker 1: those uses won't work. And uh, it will be more stable. Yes,
• 10:42
  Speaker 1: And I mean your point is that's something to celebrate, right.
• 10:46
  Speaker 1: I mean, when we get to a point where Bitcoin
• 10:49
  Speaker 1: is rising only a few percent per year, that's actually
• 10:54
  Speaker 1: a good thing. Yes, it's not the utopian dreams of
• 10:58
  Speaker 1: many crypto backers, but crypto in some sense needs to
• 11:02
  Speaker 1: be normalized to survive. Most of our world is normal,
• 11:05
  Speaker 1: whether we like it or not. Our policymakers and sistunt
• 11:08
  Speaker 1: things being normal enough. They can whack crypto down in
• 11:11
  Speaker 1: a number of ways. And I think it's more likely
• 11:14
  Speaker 1: crypto will become another asset. That's fine. Hey, Tyler, thanks
• 11:18
  Speaker 1: so much for coming on and really appreciate getting your
• 11:20
  Speaker 1: perspective on this new asset class. I think investors are
• 11:25
  Speaker 1: really trying to get their arms around uh. And we
• 11:28
  Speaker 1: love bringing in formed opinion. To get some color on that,
• 11:30
  Speaker 1: Tyler cow and Bloomberg opinion calumnists for Bloomberg News. You
• 11:34
  Speaker 1: can read Tyler's work on all the Bloomberg opinion stuff
• 11:36
  Speaker 1: with Bloomberg dot Com, slash Opinion or OPI I n
• 11:39
  Speaker 1: go on the terminal. I saw and I thought a
• 11:44
  Speaker 1: fascinating story yesterday evening Goldman Sachs sees five point five
• 11:51
  Speaker 1: trillion dollars of cash sitting on the sidelines. A team
• 11:55
  Speaker 1: led by David cost In, the strategists there said that
• 11:59
  Speaker 1: they expect five hundred billion dollars to go back into
• 12:04
  Speaker 1: US stocks through year end, and a huge portion of
• 12:08
  Speaker 1: that is expected to be in corporate buybacks. I want
• 12:11
  Speaker 1: to bring in Lyle Heim body get his outlook. He
• 12:15
  Speaker 1: is a co founder of Granted Group Advisors out of Wilton, Connecticut,
• 12:18
  Speaker 1: and Lyle just I just thought it was interesting. You know,
• 12:21
  Speaker 1: there's there's at least one reason we could see stocks
• 12:23
  Speaker 1: and continue to rise this year. What do you see
• 12:27
  Speaker 1: in terms of an assent P five hundred outlook, Well,
• 12:31
  Speaker 1: we're looking right now the you know, just to give
• 12:33
  Speaker 1: a little context, the way we look at the world
• 12:35
  Speaker 1: is that you know, if you look at the historical
• 12:37
  Speaker 1: average of fifteen times earnings the PU ratio, that's what
• 12:41
  Speaker 1: it was for thirty years. But in the last ten years,
• 12:44
  Speaker 1: with interest rates going down the way they have, the
• 12:46
  Speaker 1: historical averages now eighteen, with the market trading right now
• 12:50
  Speaker 1: at around twenty times of price to earnings ratio, we
• 12:53
  Speaker 1: feel the markets are at least in the short term,
• 12:56
  Speaker 1: you know, fairly valued. You know. The real apprehension, uh
• 13:00
  Speaker 1: for us, at least here in the short term, is
• 13:03
  Speaker 1: that when you have you know, higher rates and higher
• 13:06
  Speaker 1: oil and higher taxes, that not necessarily a recipe for
• 13:11
  Speaker 1: a higher market, especially when you're treading at a But
• 13:14
  Speaker 1: I would say it fully that I don't think we're
• 13:16
  Speaker 1: you know, we're cheap, but I don't think we're expensive either,
• 13:20
  Speaker 1: So I think, you know, you know, the average target
• 13:23
  Speaker 1: on my first call system says the SMPS, you know,
• 13:28
  Speaker 1: the wall streets, looking for forty seven eight or something
• 13:32
  Speaker 1: like that in that range, which is about higher from here.
• 13:36
  Speaker 1: You know, I'm we're going to disagree with that. We
• 13:38
  Speaker 1: think that's a that's a bit high for a year
• 13:40
  Speaker 1: end target, and I think it'll I would think if
• 13:43
  Speaker 1: we get to that would that would be really a
• 13:48
  Speaker 1: little bit of a stretch. But on the other hand,
• 13:51
  Speaker 1: if we have any type of pullback, which we expect
• 13:53
  Speaker 1: in the short term of five or tem percent, that
• 13:56
  Speaker 1: also present a buying opportunity. The first thing we have
• 13:59
  Speaker 1: to do has upgrade you from a first call to
• 14:01
  Speaker 1: a Bloomberg will take care of that. Lyle, give us
• 14:04
  Speaker 1: a sense here, you know, there's a big debate in
• 14:06
  Speaker 1: the market. You know, do I stick with some of
• 14:09
  Speaker 1: these big growth names that've worked so well for me
• 14:11
  Speaker 1: over the really the last decade or so. Where do I,
• 14:14
  Speaker 1: you know, go with that rotation trade that has in
• 14:16
  Speaker 1: fact been working kind of reflation trade into some more
• 14:19
  Speaker 1: cyclical names, perhaps some you know the banks and think
• 14:21
  Speaker 1: things like that. What's your view, Yeah, I think that's
• 14:24
  Speaker 1: a great cause. When I was when I was speaking
• 14:26
  Speaker 1: with your eyes in the fall, you know, before Fier
• 14:29
  Speaker 1: came out with the vaccine, we were very bullish and
• 14:32
  Speaker 1: I was out emphatically pounding the table on energy, the
• 14:35
  Speaker 1: cyclicles and midcab value. I actually said that on in November.
• 14:40
  Speaker 1: I still think that's a pretty good play, and just
• 14:42
  Speaker 1: realized they've had a tremendous, tremendous move so I think
• 14:46
  Speaker 1: some of those names will continue to do well. I
• 14:48
  Speaker 1: still think because of we still think in straights a're
• 14:52
  Speaker 1: gonna go up slightly. I don't think anyone thinks that
• 14:54
  Speaker 1: we're going to go to three percent, but you know,
• 14:56
  Speaker 1: two percent seems to be the consensus on the tenure.
• 14:59
  Speaker 1: So I would think, you know, the banks and anything
• 15:02
  Speaker 1: that's interest rates sensatives should do pretty well. You know,
• 15:04
  Speaker 1: JP Morgan's had to pull back, but a big pullback.
• 15:07
  Speaker 1: I think, you know, cyclical stocks like Disney, UM, they'll
• 15:11
  Speaker 1: have some room on the upside because it's pulled back
• 15:13
  Speaker 1: from the high of two oh three. I think, you know,
• 15:16
  Speaker 1: those those are really pretty good names UH that I
• 15:19
  Speaker 1: would stick with in the short and the long term.
• 15:22
  Speaker 1: Woud it's got thirty seconds here? Um, Why are um
• 15:26
  Speaker 1: UH Pooled employer plans the hot topic in the thora
• 15:30
  Speaker 1: one K world? Well, that's that's that's another great topic.
• 15:33
  Speaker 1: You know. Pooled employer plans are essentially a bunch of
• 15:37
  Speaker 1: foreign case inside of one big foreign k. And what
• 15:40
  Speaker 1: in the purpose of these UH vehicles is not only
• 15:45
  Speaker 1: to reduce cost a little bit, but the big advantage
• 15:48
  Speaker 1: to the especially to the small employers that don't have
• 15:51
  Speaker 1: investment committees and it's usually a an owner or a
• 15:55
  Speaker 1: or a CEO, you know, signing papers that he doesn't
• 15:58
  Speaker 1: realize that he's signing, but they take on a lile
• 16:01
  Speaker 1: liability when someone goes into a PAP. So the g
• 16:03
  Speaker 1: G fore PEP is a turn where we can go
• 16:06
  Speaker 1: and where someone come in and say, you know, we're
• 16:09
  Speaker 1: going to absolve themselves from investment traduci ree responsibility and
• 16:13
  Speaker 1: operational producer responsibility. All they have to do is upload cable. Lyle,
• 16:16
  Speaker 1: thank you so much. We have to leave it there
• 16:17
  Speaker 1: just because the time we appreciate that. Lyle Hindball, co
• 16:20
  Speaker 1: founder granted Group Advisors. I think man, I represent a
• 16:27
  Speaker 1: small part of the population here that sees a little
• 16:29
  Speaker 1: bit of a silver lining um in the pandemic and
• 16:32
  Speaker 1: that maybe we've you know, upped our exercise game a
• 16:36
  Speaker 1: little bit. For me, I kind of got on this
• 16:38
  Speaker 1: peloton thing, um, and I'm actually exercising for the first
• 16:42
  Speaker 1: time and I can't even remember how long. So I
• 16:44
  Speaker 1: suspect there's some others out there like that that are
• 16:47
  Speaker 1: doing that as well as as you take a look
• 16:49
  Speaker 1: at something in the other direction, you have Yeah, I've
• 16:52
  Speaker 1: been um you know, testing out the amount of beers
• 16:55
  Speaker 1: per day I can drink and how many Netflix shows
• 16:58
  Speaker 1: I can watch. And he's a good place for the
• 17:01
  Speaker 1: for the beer part. All right, let's bring an afrom
• 17:03
  Speaker 1: almacas he's a CEO of Climber, uh and talk to
• 17:06
  Speaker 1: us about kind of just the exercise business, what the
• 17:09
  Speaker 1: trends are where we go from here. Averm, thanks so
• 17:12
  Speaker 1: much for joining us here. I love for you to
• 17:13
  Speaker 1: just kind of give us a thirty thousand over foot
• 17:16
  Speaker 1: overview of Climber. What are you guys doing? Thank you
• 17:21
  Speaker 1: for having me. First of all, Climber is a connected
• 17:24
  Speaker 1: fitness company, I mean so much like you you reference Peloton,
• 17:28
  Speaker 1: where it's kind of a community base that's got a screen.
• 17:31
  Speaker 1: The most important difference is that we use uh, you know,
• 17:35
  Speaker 1: kind of this vertical climbing modality which is really safe
• 17:40
  Speaker 1: and efficient for the body versus you know, sitting down
• 17:43
  Speaker 1: on a traditional exercise fike or rower. And so that's
• 17:48
  Speaker 1: that's really the core difference between what we're doing at
• 17:51
  Speaker 1: Climber and kind of a lot of the things in
• 17:52
  Speaker 1: the marketplace today. Hang on so it's a machine that
• 17:55
  Speaker 1: I could order to my home and like Paul does
• 17:58
  Speaker 1: with his peloton. I could because for me, briding a
• 18:02
  Speaker 1: bike is just super boring. But I love climbing. So
• 18:05
  Speaker 1: is that is that what we're talking about? Yeah? Yeah, so,
• 18:08
  Speaker 1: I mean, you know, my, my, the reason why I
• 18:11
  Speaker 1: started this was I never could understand why we as
• 18:15
  Speaker 1: a society we're sitting down to workout right, because most
• 18:18
  Speaker 1: of us will have stand up desk now, and you know,
• 18:20
  Speaker 1: different things like that. So it's just a different motion
• 18:24
  Speaker 1: where you know, you're kind of using your body's primal
• 18:28
  Speaker 1: crawling movement um rather than you know, sitting down and
• 18:33
  Speaker 1: and and doing a bicycle or a row or something
• 18:36
  Speaker 1: like that. So it really just starts with that difference
• 18:38
  Speaker 1: in modality um and and then it's all about the
• 18:42
  Speaker 1: community and the engagement and and all of that. Great
• 18:45
  Speaker 1: about so ever, give us a sense of kind of
• 18:48
  Speaker 1: how your business was impacted by the pandemic. We've heard
• 18:53
  Speaker 1: stories from again the Pelotons of the world where they
• 18:55
  Speaker 1: just had a surgeon demand talked to us about your business. Yeah,
• 18:59
  Speaker 1: Trium into some amount of demand. I think, you know,
• 19:01
  Speaker 1: Americans and and really everyone around the world has kind
• 19:04
  Speaker 1: of looked internally as a result of this pandemic and said, gosh,
• 19:08
  Speaker 1: you know, health and wellness and fitness or are just
• 19:11
  Speaker 1: so important and so uh we've also been beneficiaries of that. UM. Interestingly,
• 19:17
  Speaker 1: we we see a lot of people returning to gym's right,
• 19:21
  Speaker 1: and we see a lot of people looking for that
• 19:23
  Speaker 1: kind of community based environment where they're almost like a
• 19:27
  Speaker 1: congregation of sorts, you know, kind of getting together to
• 19:31
  Speaker 1: work out. And so uh, we do have kind of
• 19:34
  Speaker 1: a business to business side of our of of climber
• 19:37
  Speaker 1: as well, kind of in support of those those uh,
• 19:41
  Speaker 1: commercial facilities. You know. The interesting thing I was talking
• 19:44
  Speaker 1: to the guy who runs Future, which is UM, which
• 19:48
  Speaker 1: is a training It's like a trainer that you use
• 19:50
  Speaker 1: via FaceTime basically UM, and he said, there were a
• 19:54
  Speaker 1: lot of people who got on a peloton are got
• 19:58
  Speaker 1: climbers during the lockdown, but there were also a ton
• 20:01
  Speaker 1: of people who put on like the Freshman fifteen all
• 20:03
  Speaker 1: over again. I'm one of those people. UM. Are you
• 20:06
  Speaker 1: seeing more as as we need to re emerge into society,
• 20:11
  Speaker 1: you know, possibly in a bathing suit since it's summer.
• 20:14
  Speaker 1: Are are you seeing more and more people order your
• 20:17
  Speaker 1: machines or or or is it going the other way,
• 20:20
  Speaker 1: you know, because we can go outside. It's you know,
• 20:24
  Speaker 1: we're we're early days, so the demand curve here is
• 20:28
  Speaker 1: just exponential. And so we're just thrilled that, you know
• 20:32
  Speaker 1: that that people are kind of you know, charging ahead
• 20:35
  Speaker 1: and really thinking more about you know, health and wellness.
• 20:41
  Speaker 1: It's just it's kind of top of mind from wearables
• 20:43
  Speaker 1: and kind of tracking to the diet and and and
• 20:46
  Speaker 1: obviously exercises is just such a big part of it.
• 20:49
  Speaker 1: And so um, you know, we're we're pleased to be
• 20:53
  Speaker 1: kind of riding that wave and and think it will continue,
• 20:56
  Speaker 1: um as a result of this pandemic. All right, so
• 21:00
  Speaker 1: give us a sense of how your business, how you
• 21:03
  Speaker 1: think your business will do, what you may have to
• 21:06
  Speaker 1: change or adapt as the world does open up, as
• 21:09
  Speaker 1: people do go back to the gym's. How do you
• 21:11
  Speaker 1: envision that? Yeah, I mean I think, you know, frankly speaking,
• 21:16
  Speaker 1: I think people will return to gym, maybe not at
• 21:18
  Speaker 1: the same rate as they were pre pandemic, right, because
• 21:21
  Speaker 1: I think people are especially nervous with like huge gym's
• 21:25
  Speaker 1: when we think about like you know, big big floor gyms. Um,
• 21:29
  Speaker 1: but I think you know, that's where we can offer
• 21:32
  Speaker 1: you know, climbing as a modality to those to those
• 21:34
  Speaker 1: businesses as as a point of differentiation and innovation to
• 21:38
  Speaker 1: kind of welcome people back in UM. For us, it's
• 21:42
  Speaker 1: really been challenging, you know as a business, UM because
• 21:46
  Speaker 1: most of our products are made in Asia, UM just
• 21:51
  Speaker 1: from a supply chain standpoint, So, uh, just navigating that,
• 21:55
  Speaker 1: it's kind of super top of mind for us as
• 21:57
  Speaker 1: a business right now. Do you know? For me, I mean,
• 22:00
  Speaker 1: the machine looks awesome and I was reading reviews. Cleveland
• 22:03
  Speaker 1: Clinic says the movement can be challenging, but it's very effective. Um.
• 22:07
  Speaker 1: Uh the climber, I I think it would be sweet,
• 22:11
  Speaker 1: but I don't understand that the social part, Like I
• 22:14
  Speaker 1: just want to get on it and and work it.
• 22:16
  Speaker 1: But I know that Paul loves the instructors on peloton.
• 22:21
  Speaker 1: What's what's your social draw? What do people like to
• 22:23
  Speaker 1: climb together? Yeah? So, I mean you'll see everything on
• 22:28
  Speaker 1: the machine from the instructors, right, like where you have
• 22:31
  Speaker 1: different different styles of instruction, right, Some people like that
• 22:36
  Speaker 1: you know, motivational type of instructor. Some people like the
• 22:39
  Speaker 1: more quiet, maybe music driven instructor. And so you know
• 22:44
  Speaker 1: the video one demand is the is the key piece, uh,
• 22:48
  Speaker 1: you know, of the overall experience, kind of the social network.
• 22:51
  Speaker 1: I climb fastest when I'm terrified. So if you have
• 22:54
  Speaker 1: you know, like um, the CIA after me looking to
• 22:58
  Speaker 1: put a cap in me, that would that would motivate me. Alright, climber.
• 23:01
  Speaker 1: They're really fascinating stuff. Abraham el Elmakis talking about that.
• 23:06
  Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can
• 23:09
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• 23:13
  Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
• 23:17
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• 23:21
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• 23:24
  Speaker 1: us worldwide at Bloomberg Radio