Latest / What the Flux / Myer's major merger | Zip Co shares up 10% | Volkswagen's worker strike

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Myer's major merger | Zip Co shares up 10% | Volkswagen's worker strike · What the Flux

• 0:05
  Speaker 1: This is what the flux. I'm brttman, I'm justin and
• 0:08
  Speaker 1: it's Wednesday, this thirtieth of Bucktober does the boy. You
• 0:10
  Speaker 1: may think that Halloween is the spookiest thing going around
• 0:13
  Speaker 1: this week, but there is something a little bit spooky
• 0:16
  Speaker 1: app Zombie Companies. That's companies showing signs of financial distress
• 0:20
  Speaker 1: but managing not to collapse.
• 0:21
  Speaker 2: Now.
• 0:21
  Speaker 1: According to KPMG Australia, the number of ASX listed zombies
• 0:25
  Speaker 1: has spiked by thirty one percent in just the last
• 0:27
  Speaker 1: six months. And I'm calling this one chabooki shaboogiesh woogie
• 0:31
  Speaker 1: fox fam.
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  Speaker 2: Did you know the ASX two hundred has returned eight
• 0:34
  Speaker 2: point one percent in twenty twenty four so far, And
• 0:36
  Speaker 2: I must say it is quite surprising to see who
• 0:38
  Speaker 2: some of the winners are and some of the losers.
• 0:40
  Speaker 2: We have it all covered in the Flux out to
• 0:42
  Speaker 2: make sure to download the app and find out who
• 0:44
  Speaker 2: is leading the charge.
• 0:45
  Speaker 1: Three dulcet tone stories today Juzzy Boy for our first.
• 0:50
  Speaker 1: Maya is the new owner of Just Jeans, JJ's and
• 0:53
  Speaker 1: Dotty clothing brands after agreeing to merge with parts of
• 0:57
  Speaker 1: Premiere Investments.
• 0:58
  Speaker 2: Wowe department sort more Maya, So tell me what's going
• 1:01
  Speaker 2: on here? Be man So does it? Wait? We know?
• 1:02
  Speaker 1: Maya is the department store that's been selling men's and
• 1:04
  Speaker 1: women's clothing since nineteen hundred, if you don't mind.
• 1:07
  Speaker 2: And while Maya and David Jones were pretty invincible back
• 1:10
  Speaker 2: in the day, the last fifteen years have been much
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  Speaker 2: less kind.
• 1:13
  Speaker 1: Now DOESI wait? We know that Maya listed on the
• 1:15
  Speaker 1: ASX at evaluation of two point two billion dollars in
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  Speaker 1: two thousand and nine, but has dropped by about sixty
• 1:20
  Speaker 1: six percent since then.
• 1:22
  Speaker 2: The Beman Meyer is now working hard to claw back
• 1:24
  Speaker 2: its relevance and revenue yep.
• 1:27
  Speaker 1: It has announced that it's going to merge with certain
• 1:29
  Speaker 1: parts of Premier Investment's business.
• 1:31
  Speaker 2: Basically, myyle now own brands like Just Jeans, JJ's, Dotty.
• 1:35
  Speaker 1: Don't you dever forget Portman's and Jackie E.
• 1:37
  Speaker 2: And in exchange, Maya will give Premier Investors roughly thirty
• 1:41
  Speaker 2: percent of Maya shares plus a little eighty two million
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  Speaker 2: bucks in cash.
• 1:45
  Speaker 1: And when you whack the Maya one loyalty program onto
• 1:47
  Speaker 1: these brands, you can start to understand the opportunity for Maya.
• 1:50
  Speaker 2: The v Man. Off the back of this news, Premier
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  Speaker 2: investors share price jump more than twelve percent and Maya's
• 1:55
  Speaker 2: dropped by one percent.
• 1:55
  Speaker 1: Oh interesting, seems like investors were really quite pleased to
• 1:59
  Speaker 1: dish off these brands.
• 2:00
  Speaker 2: So true, So what is the key learning here?
• 2:02
  Speaker 1: One company's trash maybe another company's treasure.
• 2:05
  Speaker 2: You see, b Man, Well, brands like just Jean's and JJ's.
• 2:08
  Speaker 2: They may lack glamour, they still wake in close to
• 2:11
  Speaker 2: eight hundred million dollars in revenue over the last financial year.
• 2:14
  Speaker 1: It means that Maya can now offer its loyalty program
• 2:17
  Speaker 1: to millions of more Australians.
• 2:18
  Speaker 2: Get this, b Man. My's loyalty program called Maya One
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  Speaker 2: has more than ten million members right now and one
• 2:23
  Speaker 2: of the.
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  Speaker 1: Key items on Maya's new CEO's wish list is to
• 2:26
  Speaker 1: improve the loyalty program.
• 2:27
  Speaker 2: If you remember, she came from Quantus and built its
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  Speaker 2: loyalty program into a seriously big business.
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  Speaker 1: So she's already poached to executives from Quantus's loyalty program
• 2:35
  Speaker 1: over to Maya.
• 2:36
  Speaker 2: And snagged five new brands into Meyer's portfolio.
• 2:39
  Speaker 1: And with this new merger, the Maya board and investors
• 2:42
  Speaker 1: are hoping that the new CEO can revitalize their loyalty
• 2:45
  Speaker 1: program and bring in the big bucks with a bit
• 2:48
  Speaker 1: of glamour. For our second story, Zipco has seen the
• 2:51
  Speaker 1: chair price jump more than ten percent after announcing its
• 2:54
  Speaker 1: focus on profitability. Is paying off.
• 2:57
  Speaker 2: Zip bouncing back harder than a Black Friday shopper turning
• 3:00
  Speaker 2: for Cyber Monday. So what is going on?
• 3:02
  Speaker 1: Some background, juzzy boy. Zip Co was founded in twenty thirteen,
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  Speaker 1: as of course, one of the og buy now, pay
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  Speaker 1: later companies in Australia.
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  Speaker 2: Even slightly before after pay.
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  Speaker 1: I know now. Since then it's grown to over six
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  Speaker 1: million customers around the world. That man, it hasn't been
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  Speaker 1: all daffidils and rainbows for zip Now. It went on
• 3:17
  Speaker 1: a bit of an acquisition spree between around twenty sixteen
• 3:20
  Speaker 1: and twenty twenty two. They acquired by Now pay, Lata
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  Speaker 1: providers and other FinTechs as well.
• 3:24
  Speaker 2: We're talking Spotty in the Middle East, Twister in Europe.
• 3:27
  Speaker 2: Don't you forget ye old pocketbook here in Australia. But
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  Speaker 2: then boom, interest rate shut up and investors suddenly cared
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  Speaker 2: a whole lot more about profits rather than promises.
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  Speaker 1: Zip shares drop from twelve dollars thirty five all the
• 3:38
  Speaker 1: way down to twenty seven cents, about a nine eight
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  Speaker 1: percent drop.
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  Speaker 2: Wow. But over the past two years, ZIP has cut
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  Speaker 2: the fat and focused solely on its Australia and New Zealand.
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  Speaker 1: Business and also growing in the US.
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  Speaker 2: And now Zip's announced a quarterly ebitdat of nearly thirty
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  Speaker 2: two millions macaroni.
• 3:52
  Speaker 1: And Juzzy Boy. Off the back of this news, ZIP
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  Speaker 1: share prices jump more than ten.
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  Speaker 2: Percent and grown more than eight times in the past
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  Speaker 2: twelve months.
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  Speaker 1: Largely off the back of that U growth and their
• 4:00
  Speaker 1: excess spread growing by over six percent in Australia.
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  Speaker 2: So what is the key landing here?
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  Speaker 1: Excess spread is the margin a financial company earns after
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  Speaker 1: covering its borrowing costs. Now, Zip doesn't just magically pullcash
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  Speaker 1: from thin air. It borrows from banks and lenders and
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  Speaker 1: fund managers.
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  Speaker 2: So a growing excess spread means they're either managing their
• 4:19
  Speaker 2: borrowing rates well, or.
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  Speaker 1: They're increasing the interest rate on their products, or a
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  Speaker 1: mix of boats and jay Boy with zip code now profitable.
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  Speaker 1: It's clearly got investors quite relieve.
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  Speaker 2: Yeah, because it means in a lower interest rate environment,
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  Speaker 2: it's excess spread should.
• 4:32
  Speaker 1: Be even wider, meaning even better margins.
• 4:35
  Speaker 2: For our third and final story, Volkswagen is looking to
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  Speaker 2: cut thousands of jobs as part of a major cost
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  Speaker 2: cutting overhaul. But they've got one major speed bump in
• 4:44
  Speaker 2: the way.
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  Speaker 1: Oh, jusey boy. Clearly it's not the best of days
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  Speaker 1: for old Volkswagen. What is happening right here?
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  Speaker 2: So Volkswagen or Volkswagen, Yes, the German car company that
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  Speaker 2: was founded back in nineteen thirty seven.
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  Speaker 1: It's been most well known for the iconic beet Or car,
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  Speaker 1: and in twenty sixteen to twenty seventeen it was the
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  Speaker 1: largest car maker worldwide.
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  Speaker 2: But lately, b Man Volkswagen has been doing it quite hard.
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  Speaker 1: We're talking the enormous cost of transitioning to electric vehicle as.
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  Speaker 2: Well as intense competition from Chinese car makers.
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  Speaker 1: Indeed, and now jazy boy, Volkswagen is allegedly planned to
• 5:13
  Speaker 1: shut down at least three factories in Germany and lay
• 5:15
  Speaker 1: off tens of thousands of employees.
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  Speaker 2: All part of a major cost cutting initiative to revamp
• 5:20
  Speaker 2: the company. But be man, stop right there, because Volkswagen's
• 5:24
  Speaker 2: workers council isn't just letting this slide and they're putting
• 5:26
  Speaker 2: up a fight against this decision.
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  Speaker 1: They've been in some hectic negotiations with Volkswagen to protect employees.
• 5:32
  Speaker 2: They've even threatened for all employees to strike if their
• 5:34
  Speaker 2: needs aren't met.
• 5:35
  Speaker 1: So what is the key learning here?
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  Speaker 2: Poor labor relations can be impactful enough to destabilize a
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  Speaker 2: whole company.
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  Speaker 1: Yeap Labor relations is basically a relationship between company management
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  Speaker 1: and its workers.
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  Speaker 2: Who are often represented by the unions and be Man.
• 5:49
  Speaker 2: With Volkswagen facing serious financial challenges, it can often amplify
• 5:53
  Speaker 2: its conflict with its employees. In fact, be Man, we
• 5:55
  Speaker 2: saw something quite similar happened back in twenty nineteen with
• 5:58
  Speaker 2: General Motors.
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  Speaker 1: YEA, forty eight thousand employees went on strike over issues
• 6:02
  Speaker 1: like job security and better pay. And that strike went
• 6:04
  Speaker 1: for over forty days. And get this ended up costing
• 6:07
  Speaker 1: General Motors over two billion US dollars and Jesse Wait,
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  Speaker 1: Volkswagen's bound to cop some financial damage through this conflict,
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  Speaker 1: but we'll have to wait and see just how bad
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  Speaker 1: it all is.
• 6:16
  Speaker 2: Bucks Out. The ASX has returned eight point one percent
• 6:18
  Speaker 2: for the first nine months of this year, and there
• 6:20
  Speaker 2: is one particular stuff that has searched. If you want
• 6:24
  Speaker 2: to know more about what's going on and where the
• 6:26
  Speaker 2: key movers are. Make sure to download the flucks app
• 6:28
  Speaker 2: and check out the best and worst performing sectors on
• 6:30
  Speaker 2: the ASX, and.
• 6:31
  Speaker 1: No doubt about it, you'll be winning at money.
• 6:34
  Speaker 2: Thanks for listening and we'll see you on Fridays.