Latest / What the Flux / David Jones loses its luxury brands | Meta's shares boom after its AI agent | Mbappé dumps Nike for On

Transcript

David Jones loses its luxury brands | Meta's shares boom after its AI agent | Mbappé dumps Nike for On · What the Flux

• 0:05
  Speaker 1: This is What The Flux, I'm Brett, and I'm Justin,
• 0:07
  Speaker 1: and it's Wednesday the 23rd of September. Jazzy boy, there
• 0:09
  Speaker 1: aren't too many things in life guaranteed. Death, taxes, Nick
• 0:12
  Speaker 1: Dacos winning the Brownlow medal, and a rate rise next week.
• 0:15
  Speaker 1: They're all almost locked in. All of the big four
• 0:18
  Speaker 1: banks are now forecasting a rate rise next Tuesday. And now,
• 0:21
  Speaker 1: they're not just talking about a rate rise next week,
• 0:23
  Speaker 1: but also two more potentially by March next year. Absolutely.
• 0:27
  Speaker 1: It's getting close to the end of September, which means
• 0:28
  Speaker 1: it is the time to start looking at how you spend,
• 0:31
  Speaker 1: how you save, and what you want to do with
• 0:32
  Speaker 1: your money for this month. Now, if it's too hard
• 0:34
  Speaker 1: to do that all on your own, the Flux app
• 0:36
  Speaker 1: in under 30 seconds can track your spending, your saving,
• 0:39
  Speaker 1: and help you understand where all your money went this month.
• 0:41
  Speaker 1: So make sure to download the Flux app and check
• 0:43
  Speaker 1: out the budgeting tool. Three sensational stories today, Jazzy Boy.
• 0:46
  Speaker 1: Let's do it. For our first, David Jones is losing
• 0:48
  Speaker 1: its luxury glow-up with Gucci Dior and Chanel shoes all
• 0:52
  Speaker 1: walking out the door over unpaid bills. David Jones getting
• 0:55
  Speaker 1: dumped by the designers, B-Man, so tell me more. So
• 0:58
  Speaker 1: a quick fashion history lesson, Jazzy Boy. David Jones is
• 1:00
  Speaker 1: Australia's oldest department store, 188 years young. It was acquired
• 1:05
  Speaker 1: by the South African Woolworths Group in 2014 for 2.1
• 1:07
  Speaker 1: billion dollars. And after more than a decade of decline,
• 1:11
  Speaker 1: it was sold to private equity firm Anchorage Capital for
• 1:13
  Speaker 1: just over $ 100 million in 2023. A lazy 94% decline
• 1:17
  Speaker 1: in value, one hell of a markdown. And there was
• 1:20
  Speaker 1: hope that Anchorage would give David Jones the glow up
• 1:22
  Speaker 1: it desperately needed. But now, B-Man, Dior and Gucci have
• 1:25
  Speaker 1: both walked out of their supply deals with DJs in
• 1:28
  Speaker 1: the handbag and shoe categories. Why is that? Because David
• 1:31
  Speaker 1: Jones has asked suppliers to accept a 20-week repayment plan
• 1:35
  Speaker 1: just to keep their stock flowing before Christmas. And B-Man,
• 1:37
  Speaker 1: it looks like David Jones thought it had a little
• 1:40
  Speaker 1: more bargaining power than it actually did. Interesting call. So
• 1:42
  Speaker 1: what's the key learning here? Slow paying your suppliers might
• 1:45
  Speaker 1: buy you time, but it can cost you the entire relationship.
• 1:48
  Speaker 1: And that's exactly what happened here. DJs asked for a
• 1:51
  Speaker 1: 20-week repayment program just to restock for summer. And as
• 1:53
  Speaker 1: a result, a number of previous DJ brands, including Upside
• 1:56
  Speaker 1: RM Williams have stopped supplying DJs altogether. And then there's
• 2:00
  Speaker 1: Accent Group, which distributes UGG and Doc Martens. Yep, they
• 2:03
  Speaker 1: stopped supplying DJs entirely in July this year. And why
• 2:06
  Speaker 1: was that? Because Accent Group's unpaid stock exposure to David
• 2:09
  Speaker 1: Jones hit $ 2 million last year before finally being repaid.
• 2:13
  Speaker 1: And now Accent will only supply DJs on a cash-on-delivery basis.
• 2:16
  Speaker 1: In other words, show me the money, then I'll show
• 2:18
  Speaker 1: you the UGGs. So Jazzy Boy, when a retailer stretches
• 2:21
  Speaker 1: payments out, suppliers start trading that account as a liability
• 2:25
  Speaker 1: and not so much as a partner. For our second story,
• 2:28
  Speaker 1: Metashare prices jumped 11% in a single day, which is
• 2:31
  Speaker 1: its biggest pop since early 2025 after its new AI
• 2:34
  Speaker 1: agent hit number one on the US App Store. Zach
• 2:36
  Speaker 1: plotting his next way to suck every bit of info
• 2:39
  Speaker 1: out of you. Tell me more. Okay, so Meta is
• 2:41
  Speaker 1: obviously the parent of Facebook, Instagram and WhatsApp. As well
• 2:44
  Speaker 1: as the lesser known investments it made in Oculus headsets
• 2:47
  Speaker 1: and the short-lived Metaverse. But B-Man, over the past couple
• 2:50
  Speaker 1: of years, Meta's been spending tens of billions on AI infrastructure.
• 2:54
  Speaker 1: And nobody really knew where it was heading. No, no, no.
• 2:56
  Speaker 1: But two weeks ago, Meta released its AI personal assistant
• 2:59
  Speaker 1: called Muse in the US. And it has rocketed to
• 3:02
  Speaker 1: number one on the US App Store. Can't stop, will
• 3:04
  Speaker 1: not stop. Next minute, Meta's share price jumped 11% after
• 3:08
  Speaker 1: investors licked their lips with all the potential money-making opportunities.
• 3:11
  Speaker 1: In fact, Jazzy Boy, some Wall Street investors believe Muse
• 3:14
  Speaker 1: could add nearly $ 30 billion in revenue for Meta by 2030.
• 3:19
  Speaker 1: And what does Muse actually do? Well, obviously not available
• 3:22
  Speaker 1: in Australia just yet, but supposedly you can send emails,
• 3:25
  Speaker 1: book travel, shop online, fill in forms. So it's kind
• 3:28
  Speaker 1: of less interactive chatbot and more agent with workflows. Sounds
• 3:31
  Speaker 1: like it, yep. And B-Man, while Meta does have paid
• 3:33
  Speaker 1: subscription options, it seems that subscriptions aren't really where the
• 3:37
  Speaker 1: juicy opportunity lies. So what's the key learning here? Giving
• 3:40
  Speaker 1: something away for free isn't usually generosity with tech companies.
• 3:43
  Speaker 1: It's usually the first move in a much bigger game.
• 3:46
  Speaker 1: Right now, part man, part bot, Zach, isn't charging most
• 3:50
  Speaker 1: Muse users anything. No, he's giving away free tokens, free compute.
• 3:54
  Speaker 1: And that sounds like a terrible business model until you
• 3:56
  Speaker 1: look at where the money actually comes from. Exactly. His
• 3:59
  Speaker 1: framing was that Muse should, quote, make you money and
• 4:02
  Speaker 1: save you money. We know that Meta already has over
• 4:04
  Speaker 1: 10 million active advertisers running ads across Facebook each month.
• 4:08
  Speaker 1: So Muse doesn't necessarily need to charge businesses 20 bucks
• 4:11
  Speaker 1: a month for the product if it can convince them
• 4:13
  Speaker 1: to drop another few hundred bucks into Meta ads. And
• 4:15
  Speaker 1: if your AI agent starts finding products, recommending them, even
• 4:18
  Speaker 1: buying them for you eventually, Meta could take a little
• 4:21
  Speaker 1: clip along the way too. It's the same logic as
• 4:23
  Speaker 1: Google giving away Gmail and search for free, then making
• 4:26
  Speaker 1: a lazy 264 billion US dollars a year from ads
• 4:29
  Speaker 1: around that ecosystem. And Clearly, investors are excited, much more
• 4:32
  Speaker 1: excited than they were about the metaverse. For our third
• 4:36
  Speaker 1: and final story, Kylian Mbappe has dumped Nike after 20
• 4:40
  Speaker 1: years to become the face of ON, the Swiss sneaker
• 4:43
  Speaker 1: brand that is coming for football. Quite a newsflash there,
• 4:45
  Speaker 1: Jazzy Boy. First it was Fetty, now it's Mbappe. Yeah.
• 4:48
  Speaker 1: on is not messing around tell me more okay so
• 4:51
  Speaker 1: on is the swiss sneaker brand that was founded in
• 4:53
  Speaker 1: 2010 the founder was a former professional triathlete who wanted
• 4:57
  Speaker 1: to find a shoe that felt like running on clouds
• 5:00
  Speaker 1: and when he couldn't find one he created on and
• 5:03
  Speaker 1: on really took off after roger federer became an investor
• 5:06
  Speaker 1: and ambassador and that was back in 2019 and they
• 5:08
  Speaker 1: meant the fed train actually helped design the shoes and
• 5:11
  Speaker 1: has equity in the company which is absolutely Absolutely exploded. Yep.
• 5:14
  Speaker 1: On's revenue has grown more than 11 times since 2019
• 5:17
  Speaker 1: to over 3.8 billion US dollars. And now On assigned
• 5:20
  Speaker 1: Kylian Mbappe the World Cup's all-time top goal scorer. And
• 5:24
  Speaker 1: Nike has officially lost its star striker. But here's where
• 5:27
  Speaker 1: things get juicy, B-Man, because the deal isn't just a
• 5:29
  Speaker 1: paycheck for Mbappe. On confirmed it actually includes both cash
• 5:33
  Speaker 1: and equity. And Jazzy Boy, this is On's first cracking
• 5:35
  Speaker 1: to soccer, aka football, which has long been owned by
• 5:38
  Speaker 1: Nike and Adidas. And given Mbappe's popularity and 136 million
• 5:42
  Speaker 1: Instagram followers, On is licking its lips at the potential.
• 5:45
  Speaker 1: So what's the key learning here? The best endorsement deal
• 5:47
  Speaker 1: isn't always a paycheck. It's being on the cap table.
• 5:50
  Speaker 1: These days, some of the mega deals aren't just throwing
• 5:52
  Speaker 1: a large suitcase of cash at sports people and celebrities.
• 5:55
  Speaker 1: It also includes equity. And that changes the incentive completely.
• 5:58
  Speaker 1: Go on. Well, Mbappé now wants On to actually win,
• 6:02
  Speaker 1: not just cashing in a large check. And Jazzy Boy
• 6:04
  Speaker 1: On learnt the success of this equity model when it
• 6:06
  Speaker 1: signed Fedde back in 2019. Yep, at the time, Roger
• 6:09
  Speaker 1: Federer gained a 3% stake in On through his endorsement,
• 6:12
  Speaker 1: but also by investing. It was a $ 50 million investment
• 6:15
  Speaker 1: at the time, but it's believed to have turned into
• 6:17
  Speaker 1: $ 500 million now. And that's more than Federer made in
• 6:21
  Speaker 1: 18 years as an ambassador for Nike. So clearly, Kylian
• 6:24
  Speaker 1: Mbappé wants to take On into the world of soccer.
• 6:26
  Speaker 1: And with 270 million amateur soccer players worldwide, that is
• 6:30
  Speaker 1: a lot of potential feet to fit. Yep. FluxFam, at
• 6:33
  Speaker 1: the end of the month, everybody should be doing their
• 6:36
  Speaker 1: financial reconciliation. And in the Flux app, you can do
• 6:38
  Speaker 1: it in under 30 seconds. Tracks your spending, your saving,
• 6:40
  Speaker 1: and categorizes it so you know exactly where all your
• 6:43
  Speaker 1: money's gone this month. Make sure to download the Flux
• 6:45
  Speaker 1: app and check out the budgeting tool. Thanks for listening,
• 6:47
  Speaker 1: and we'll see you on Friday.