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How XpresSpa Converted Airport Spas Into Test Centers: CEO Satzman · Bloomberg Intelligence

0:01
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
0:04
Speaker 1: with my co host of Bonnie Quinn. Every business day
0:06
Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,
0:10
Speaker 1: along with essential market moving news. Find the Bloomberg Markets
0:13
Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,
0:17
Speaker 1: and on Bloomberg dot com. This is Bloomberg Markets. I'm
0:20
Speaker 1: Carol Master in for Bonnie and Paul on this Wednesday.
0:23
Speaker 1: One of the industries we've covered a lot, and understandably so,
0:26
Speaker 1: throughout the pandemic is the hospitality industry, anything connected with
0:29
Speaker 1: traveling and tourism. Um. The airlines of course have been
0:34
Speaker 1: just shut down or closed dramatically. Uh. Their business is
0:38
Speaker 1: really just dropped as a result of the pandemic, and
0:41
Speaker 1: understandably so well. Our next guest and his company certainly
0:45
Speaker 1: plays into this. We're talking about the Express SPA Group
0:48
Speaker 1: tickers x sp A. They trade publicly. Uh. It's about
0:52
Speaker 1: a hundred and twelve million dollar market cap company. It
0:55
Speaker 1: is the world largest airport spat company. I've used them
0:57
Speaker 1: at an airport while traveling, and I'm sure you have two. Um,
1:01
Speaker 1: so let's get into what their business has been like
1:03
Speaker 1: and how they are dealing with the pandemic and what
1:05
Speaker 1: the future looks like. Doug Satsman is CEO of Express Spot,
1:08
Speaker 1: joining us on the phone in New York City. Doug,
1:11
Speaker 1: nice to have you here on Bloomberg. How are you,
1:14
Speaker 1: um great, good morning. Thanks care for having us on. Well,
1:17
Speaker 1: it's great to have you here. Tell me a little
1:19
Speaker 1: bit about what your world has been like. Take me
1:20
Speaker 1: back to March and what it's been like since then.
1:24
Speaker 1: So in March we all know what happened across our
1:28
Speaker 1: community and communities around the world. UM our core business
1:32
Speaker 1: has been airports. Spas were the largest global UH SPA
1:36
Speaker 1: operator in airports and we were deemed a non essential
1:39
Speaker 1: use appropriately so you know, by the end of March
1:42
Speaker 1: closed all of our spas down globally UH And then
1:46
Speaker 1: we had an idea from our chairman, Bruce Bernstein, could
1:49
Speaker 1: we offer COVID testing during this time and leverage the
1:52
Speaker 1: real estate we have in the spas. So we started
1:55
Speaker 1: a down and dirty project with a small group of
1:58
Speaker 1: people and in seventy five days we went from idea
2:01
Speaker 1: to concept to pilot and got our first one open
2:04
Speaker 1: in June and JFK Terminal four. And since then, we've
2:08
Speaker 1: been continuing to roll out express check clinics, which offer
2:14
Speaker 1: COVID testing for airport employees, T s A, agents and
2:18
Speaker 1: UH anyone who works for the airport as well as
2:20
Speaker 1: travelers UM, and we have been expanding around the country.
2:24
Speaker 1: We're focusing domestically first and then we can look broader, right,
2:28
Speaker 1: So like we're so what's your expectation moving forward? And
2:31
Speaker 1: and as you continue to I'm assuming branched out out.
2:34
Speaker 1: I know there was a headline, was it just yesterday
2:37
Speaker 1: or on Monday that you guys are going to start
2:39
Speaker 1: offering on site testing from select cities four NonStop flights.
2:42
Speaker 1: I think this was for Hawaii specifically. But how do
2:45
Speaker 1: you continue to kind of embrace the environment we are
2:48
Speaker 1: and kind of help your company as well as the
2:50
Speaker 1: airline industry kind of get back to normal. So what
2:53
Speaker 1: we're finding is it's the private companies that are leading
2:57
Speaker 1: the way trying to figure out the the best path
3:01
Speaker 1: for UM safe travel and returning consumer confidence. So it's
3:06
Speaker 1: the airlines, it's testing companies like US and some health
3:09
Speaker 1: app companies UM like the Common Paths, who we're partnering
3:14
Speaker 1: with to develop a process to partner with the airlines
3:17
Speaker 1: and destination cities or states UM and and to connect
3:22
Speaker 1: travelers through getting tested and then being able to convey
3:27
Speaker 1: their negative results and satisfy getting out of quarantine requirements
3:31
Speaker 1: or other requirements to be admitted into you know, a
3:35
Speaker 1: country or a state. We started with Hawaii becoming one
3:38
Speaker 1: of their trust to testing partners, and then we've had
3:41
Speaker 1: several recent announcements with United and with jet Blue and
3:45
Speaker 1: with Hawaiian Airlines where we have partnerships now with the
3:49
Speaker 1: three airlines to partner with them on select cities. Often
3:53
Speaker 1: we're focusing on Hawaii right now, but we're looking to
3:55
Speaker 1: Transatlantic destinations and and other destinations around the world. Um so.
4:00
Speaker 1: In fact, with jet Blue as an example, UM we
4:03
Speaker 1: are opening a second unit in Boston where we already
4:07
Speaker 1: have one express check, but we're opening a second one
4:09
Speaker 1: in their terminal UH to help facilitate Boston is being
4:13
Speaker 1: a hub for them to help open up more travel
4:18
Speaker 1: to more destinations and UH and there's other airlines we're
4:21
Speaker 1: speaking with as well. But these are the groups that
4:24
Speaker 1: are fueling the way. And then we're partnering with the
4:27
Speaker 1: airports to get either leverage existing real estate that we
4:31
Speaker 1: have from our SPA business, but more often than not,
4:33
Speaker 1: we're being offered new spaces that are more more convenient
4:36
Speaker 1: for travelers, like presecurity. I have to say the Investment
4:39
Speaker 1: Space has written that this has kind of created a
4:41
Speaker 1: resurgence and reincarnation for you guys as a company, and
4:45
Speaker 1: I do wonder, you know, how does this kind of
4:48
Speaker 1: factor into future longer term strategy at this point or
4:52
Speaker 1: is this just kind of a stop gap to get through. Uh? Well,
4:56
Speaker 1: it started as a stop gap to get through. You know,
5:00
Speaker 1: our our business was closed and this was a pivot
5:04
Speaker 1: that allowed us to serve the airport community, which where
5:08
Speaker 1: we've worked. But what's happened as we've learned through the
5:11
Speaker 1: medical side, we are we are developing a new concept
5:17
Speaker 1: UM that takes what we've learned from health and wellness,
5:19
Speaker 1: our history, what we've learned from medical and are developing
5:23
Speaker 1: it to launch next year, which will you know, continue
5:27
Speaker 1: with things like testing. It will run alongside Express check UM,
5:31
Speaker 1: it could run alongside Express spas, but in a post
5:34
Speaker 1: COVID world UM, things have definitely changed, and what travelers
5:38
Speaker 1: and employees are looking for are our new services that
5:42
Speaker 1: aren't offered at airports, and we're uniquely positioned to deliver
5:46
Speaker 1: that with our experience operating in the environment and what
5:49
Speaker 1: we've learned now working with doctors in our medical side right.
5:52
Speaker 1: And my understanding is you guys doing testing for things
5:55
Speaker 1: like the regular flu and mono and offering flu vaccines
5:59
Speaker 1: to which is which is pretty fat fascinating How quickly
6:01
Speaker 1: just got about twenty seconds here? Twenty five seconds? How quickly? Though?
6:04
Speaker 1: Do you you're not abaniting of the SPA business or
6:06
Speaker 1: are you? We haven't abandoned the SPA business, but we're
6:10
Speaker 1: watching traffic to continue up, and we've been successful in
6:14
Speaker 1: raising funds to help fuel future growth expansions um and
6:19
Speaker 1: to have a very solid balance sheet for investors to
6:22
Speaker 1: to stay in with us. We'll be fascinated to check
6:24
Speaker 1: in with you throughout one to uh see how it's
6:27
Speaker 1: all going, especially as you guys have pivoted dog. Doug Satsman,
6:31
Speaker 1: he is CEO of Express Spa on the phone in
6:33
Speaker 1: New York. That's stock by the way down in and
6:38
Speaker 1: I'm just going to put that out there, so we've
6:40
Speaker 1: got the perfect guest to talk about that. Specifically when
6:43
Speaker 1: it comes to investing in wine. He's got an interesting
6:46
Speaker 1: platform out there. Orv Goldman is with us CEO at
6:49
Speaker 1: Acker and he joins us on the phone in New York,
6:52
Speaker 1: or nice to have you here. Uh, you know, tell
6:54
Speaker 1: us a little bit about UM, because I've covered what
6:57
Speaker 1: you guys are up to over the last couple of years.
7:00
Speaker 1: Tell us about because you've got a new wine markets
7:02
Speaker 1: an analytics platform. Tell us a little bit about what
7:05
Speaker 1: you're doing. Okay, So what we wanted to do was
7:09
Speaker 1: we wanted to create a digital data and analytical platform
7:14
Speaker 1: to give people invested interested investing in wine, uh, a
7:20
Speaker 1: sophisticated tool to really analyze the wine market that does really,
7:26
Speaker 1: up to this point, has never existed. There have been
7:28
Speaker 1: just some generic wine indexes. But we created the most
7:34
Speaker 1: comprehensive wine indexing an analytical tool UM in the market.
7:39
Speaker 1: And it's kind of like a Bloomberg for wine. It
7:41
Speaker 1: almost sounds like it is hoping. Even that I had
7:45
Speaker 1: a thirty five years in financial markets that was very
7:48
Speaker 1: friendly with Michael at the beginning of my career. Yes,
7:52
Speaker 1: we we we did do it. We created a Bloomberg
7:54
Speaker 1: for wine. So before we get into exactly the analytics
7:58
Speaker 1: to involved in it, because I am curious about that
8:00
Speaker 1: and how it works. Tell me why wine is a
8:02
Speaker 1: good investment, So why it's very interesting. Wine is actually
8:07
Speaker 1: outside of the SMP. If you take all the asset classes,
8:12
Speaker 1: the second best performing asset class over time, and more importantly,
8:18
Speaker 1: it is about seven timeless volatile in terms of its
8:22
Speaker 1: annual returns than all the equity markets, So it is
8:27
Speaker 1: a relatively uh, nonvolatile, high performing asset. The average return
8:35
Speaker 1: of wine over fifteen years is almos almost nine and
8:38
Speaker 1: a half percent, and um, it's uh, you know for
8:44
Speaker 1: people looking to diversify, Uh, it's been a really well
8:49
Speaker 1: performing asset class and if you can there's a lot
8:52
Speaker 1: of smart money that's involved. And what we've been doing
8:55
Speaker 1: is providing a platform for the average consumer to take
8:59
Speaker 1: advantage of it. Tell me how it works, because if
9:01
Speaker 1: I go to acro wines dot Com, I can certainly
9:03
Speaker 1: shop and I can buy wine. But it's a lot
9:05
Speaker 1: more than that, is what you're saying. Correct, Yes, So
9:08
Speaker 1: it's a basically there's two things. Um, you can take
9:13
Speaker 1: any one of our two hundreds uh proprietary wine industries
9:18
Speaker 1: to analyze either the broad market or we've broken it
9:23
Speaker 1: down to looking at regions looking advantages, looking at specific
9:28
Speaker 1: producers and actually looking at any specific wine and you
9:33
Speaker 1: can literally compare their its performance against any other wine index,
9:40
Speaker 1: any other financial asset, and you could really get into
9:44
Speaker 1: the minutia if you will, uh in a very discrete
9:48
Speaker 1: way of analyzing uh a particular wine. So just like
9:53
Speaker 1: you can on a Bloomberg monel to do with equities,
9:55
Speaker 1: you can look at the broader markets, you can look
9:58
Speaker 1: at you know, sectors, and then you can look at
10:01
Speaker 1: specific stocks and you can compare them. And that's what
10:04
Speaker 1: you can now do with wine, which is interesting. So
10:07
Speaker 1: you know, when somebody invests in wine, do they actually
10:10
Speaker 1: you know, take possession of the bottles? Can they take
10:14
Speaker 1: possession of the bottles, do they own them? Can they
10:17
Speaker 1: drink them? Or can they sell them? Or they can
10:19
Speaker 1: do kind of all of that. They can do all
10:21
Speaker 1: of it. So a lot of so uh. You know,
10:24
Speaker 1: when you look at the market, there are uh, there
10:28
Speaker 1: is a large segment of the market where they from
10:32
Speaker 1: investment standpoint, people will buy wine and then have them
10:37
Speaker 1: professionally stored and over a period of time of five
10:41
Speaker 1: or ten years, and those people then ultimately sell them
10:45
Speaker 1: and pick up their capital gate right, and then there
10:49
Speaker 1: are those people that like to do that but also
10:52
Speaker 1: drink part of their seller and they can just access
10:55
Speaker 1: at any time they want from these professional storage of
11:00
Speaker 1: facilities and you just call up and say I want
11:02
Speaker 1: to drink this wine this week, and you pull it
11:04
Speaker 1: and send it to me. And that's that's really how
11:06
Speaker 1: it works. It's a combination of all so the data. Obviously,
11:09
Speaker 1: the analytics are only as good as the data. It's
11:12
Speaker 1: based on where is the data coming from at this
11:14
Speaker 1: point and how reliable, I mean, what kind of back
11:16
Speaker 1: testing can you do? Because wine can be so fickle.
11:19
Speaker 1: You can have a great brand, a great region, but
11:21
Speaker 1: you can have an off year and unfortunately, um or
11:24
Speaker 1: if I've only got about forty five seconds left, okay,
11:27
Speaker 1: so um, you can basically go through and look at
11:35
Speaker 1: that specific level of detail on the platform, right, so
11:39
Speaker 1: you're you're able to analyze that where you haven't been
11:43
Speaker 1: able to do that before. Interesting, But where are you
11:46
Speaker 1: getting all the data from? Just quickly, so the data
11:49
Speaker 1: I'm sorry, the data, uh comes for all the data
11:53
Speaker 1: and we did this specifically and rushing is that we
11:57
Speaker 1: have twenty years of actors all data, okay, and we
12:01
Speaker 1: represent this year, we were thirty of the global market historically,
12:06
Speaker 1: we're so we think it's very representative. We cleaned twenty
12:09
Speaker 1: years worth of data, got it, and we got it
12:12
Speaker 1: to we have uh, discrete parts of information about the
12:18
Speaker 1: data that has my apologies, we've got to run, but
12:21
Speaker 1: you've got to come back and do more because I
12:22
Speaker 1: find it fascinating. Irv Goldman he CEO at Acker check
12:25
Speaker 1: him out at acker wines dot com. So we've definitely
12:31
Speaker 1: covered the equity markets on this Wednesday, but let's get
12:34
Speaker 1: another check on what's going on when it comes to
12:36
Speaker 1: fixed income. Perfect guests to do that. Stephen Kane is
12:38
Speaker 1: Group Managing Director portfolio manager at tc W. They've got
12:43
Speaker 1: roughly two five billion dollars in assets under management that
12:47
Speaker 1: as of the end of the second quarter. He joins
12:50
Speaker 1: us on the phone in l A. Stephen, good to
12:52
Speaker 1: have you here with us. So getting ready just a
12:55
Speaker 1: few more days here in the trading, actually just today
12:58
Speaker 1: and tomorrow to wrap up what a year it's been.
13:02
Speaker 1: To say the least. When you look at the fixed
13:04
Speaker 1: income trade, do you anticipate that there will still be
13:08
Speaker 1: a very low rate environment and a lot of easy
13:10
Speaker 1: money slashing around? Uh? Well, first of all, thank you
13:15
Speaker 1: and good morning, thanks for having me on. And and um, yeah,
13:20
Speaker 1: I think the uh it is uh a good time
13:25
Speaker 1: to put in the rearview mirror. I uh was reading
13:28
Speaker 1: an article this morning actually that summed up pretty well
13:31
Speaker 1: that it's been a bowl market for risk assets and
13:35
Speaker 1: a bear market for humans. So it's our story. It's
13:38
Speaker 1: I've been quoting that story left and right because it
13:40
Speaker 1: has stayed with me. I think it ran last week. Um,
13:44
Speaker 1: that is that is right in a headline. Yeah, so
13:47
Speaker 1: we can we can certainly hope that ends the bear
13:50
Speaker 1: market for humans at a minimum. Um. But in terms
13:53
Speaker 1: of the financial markets and what we expect going forward,
13:57
Speaker 1: I think that um, certainly with rates, UM, I think
14:00
Speaker 1: the FAT is very committed to keeping the front end
14:03
Speaker 1: of the curve anchored and purchasing assets at a high rate.
14:08
Speaker 1: In so I think that certainly volatility and the treasury
14:13
Speaker 1: market is likely to be muted, though we do expect
14:15
Speaker 1: some upward drift at the long end of the curve
14:18
Speaker 1: as inflation pressures begin to build throughout the year. In
14:23
Speaker 1: terms of the credit markets, UM, you know, we've pretty
14:27
Speaker 1: much round tripped in terms of spreads from where we
14:30
Speaker 1: were a year ago. So investment grade spreads are abound
14:33
Speaker 1: ninety basis points, high yield spreads around fifty basis points.
14:38
Speaker 1: Is you know, if you if you went to sleep
14:40
Speaker 1: at the end of last year and woke up today,
14:42
Speaker 1: you'd think it was a very quiet year in as
14:45
Speaker 1: we know as anything but um is likely to be
14:50
Speaker 1: uh certainly less volatile, but we think they're still going
14:53
Speaker 1: to be quite a bit of turmoil and winners and
14:58
Speaker 1: losers um, you know, in the corporate sector, you know,
15:02
Speaker 1: leading to disparate returns. So we do think there's gonna
15:04
Speaker 1: be a lot of opportunity for active managers, though the
15:07
Speaker 1: overall markets like likely to be a lot less of volatile.
15:10
Speaker 1: It's like you were reading into Bloomberg this morning, I'm
15:12
Speaker 1: like so impressed, what's interesting, And just to give props
15:16
Speaker 1: where it's due. Michael Reagan of Bloomberg Business Week gets
15:19
Speaker 1: the story he did. It's been a great year for
15:21
Speaker 1: stocks in a bear market for humans. It's just has
15:23
Speaker 1: stayed with me since I've read it. And this whole
15:25
Speaker 1: idea of you know, investors just again and again ignoring
15:29
Speaker 1: the pain of the pandemic and betting on a future
15:31
Speaker 1: where companies rely less on labor. And that's something we
15:34
Speaker 1: just talked about with Sarah pons Act. Just this kind
15:36
Speaker 1: of human capital, it's just not as valuable, uh, and
15:40
Speaker 1: companies aren't valuing it as much. And you know the
15:43
Speaker 1: expectation that as a result, we might not have as
15:45
Speaker 1: much hiring and labors coming back to the workforce next year.
15:48
Speaker 1: And I do wonder what that could potentially mean in
15:51
Speaker 1: terms of economic momentum. Steve come Well, I think what
15:57
Speaker 1: it means is that while you may see the overall
16:00
Speaker 1: economy grow at a reasonable pace, you know, it may
16:03
Speaker 1: grow low single digits in aggregate, you're going to see
16:06
Speaker 1: certain sectors of the economy doing much better than others.
16:09
Speaker 1: And I think you're going to see some areas of
16:11
Speaker 1: the economy that are under stress right now. Travel, leisure,
16:16
Speaker 1: retail continue to face pressure, you know, even though the
16:19
Speaker 1: vaccines can to allow them to open up. So we
16:23
Speaker 1: think that's going to mean that credit work is going
16:25
Speaker 1: to be extremely important. It's going to be important to
16:28
Speaker 1: be in the right sectors of the fixed income market
16:30
Speaker 1: and the right credits as well. And we think another
16:33
Speaker 1: area of the fixed income markets and economy, they're going
16:37
Speaker 1: to be affected is commercial real estate? Um, what is
16:40
Speaker 1: that going to happen? I mean, I walk up and
16:41
Speaker 1: down and I know New York City is maybe a
16:43
Speaker 1: city unlike you know, no other, but man, the amount
16:46
Speaker 1: of empty space, especially retail space, um, is pretty remarkable.
16:50
Speaker 1: And is it Amazon is just gonna eat it all
16:53
Speaker 1: up and do distribution centers everywhere? I think not? But
16:55
Speaker 1: how do you see it? Well? We think, I mean
16:59
Speaker 1: the trail addition away from retail has been going on
17:03
Speaker 1: for some period of time and accelerated the trend to
17:07
Speaker 1: e commerce. And we're seeing, um, you know, the retail
17:11
Speaker 1: sector under quite a bit of stress and a lot
17:14
Speaker 1: of retailers, um, you know, going bankrupt, and we think
17:17
Speaker 1: that is going to lead to defaults and bankruptcies, you
17:20
Speaker 1: know in retail malls, particularly the B and C ones.
17:24
Speaker 1: I think the you know, the A class retail properties
17:27
Speaker 1: will find a way to repurpose their space and and
17:30
Speaker 1: uh stay uh, stay relevant if you will. But there
17:34
Speaker 1: is going to be quite a bit of stress in
17:36
Speaker 1: the in the retail area. And we also think in
17:38
Speaker 1: in the office area. The world from home friend, we
17:41
Speaker 1: think is one that's here to stay. And um, you're
17:44
Speaker 1: already beginning to see vacancies uh increase in some urban
17:50
Speaker 1: business districts, and we think that is also going to
17:52
Speaker 1: lead to some pressure and commercial real estates. I'm going
17:55
Speaker 1: to put out another story on Twitter that I think
17:56
Speaker 1: you might kind of interesting, and it talks about the
17:58
Speaker 1: big COVID changes in the world economy or only just beginning,
18:00
Speaker 1: and just kind of goes through some of them and
18:03
Speaker 1: the impact it will be by our and UH Curry
18:05
Speaker 1: and UH some of the other members of the Bloomberg team,
18:08
Speaker 1: which is I think again another must read. Steve Kane,
18:10
Speaker 1: thank you so much, Group Managing director of at TCW.
18:13
Speaker 1: Joining us on the phone from Los Angeles, and we're
18:17
Speaker 1: just getting ready to wrap up here on Bloomberg Markets.
18:20
Speaker 1: Carol Masser in for Paul and Vonnie, but we have
18:22
Speaker 1: a great guest to wrap up our program on this Wednesday,
18:26
Speaker 1: and it has to do with something known as offsite dining.
18:32
Speaker 1: I hadn't heard about this, but apparently it is a
18:35
Speaker 1: new thing. So let's talk about this because it's a
18:38
Speaker 1: growing thing and it's impacting certainly a market that we
18:42
Speaker 1: know has been really impacted by the pandemic specifically, So
18:47
Speaker 1: let's get into it with Michael montag montagon No excuse me,
18:52
Speaker 1: Michael montagon O. He is CEO of Kitchens United and
18:54
Speaker 1: he joins us on the phone in Los Angeles. Michael,
18:57
Speaker 1: it's nice to have you here with us. UM tell
19:00
Speaker 1: us remind our audience a little bit of what you
19:03
Speaker 1: are doing, because we've definitely talked about it here at Bloomberg,
19:05
Speaker 1: but remind our audience what you guys are off to
19:07
Speaker 1: and when it comes to this whole growing world of
19:10
Speaker 1: off premise dining. Thank you, Carol, and it's great to
19:14
Speaker 1: be here. Thank you for having me on UM. Yeah.
19:17
Speaker 1: Look are our business is focused on a tool to
19:22
Speaker 1: enable existing restaurant brands to capture what is a changing
19:26
Speaker 1: consumer preference towards off premise UM that entails for us
19:32
Speaker 1: UH providing a CAPEX lightway for restaurant brands to expand
19:36
Speaker 1: into new trade areas, which in our centers we have
19:40
Speaker 1: kitchen centers that generally have ten to fifteen restaurant brands
19:44
Speaker 1: that operate within them in their own four wall units.
19:47
Speaker 1: And part of that value proposition that we offer is
19:49
Speaker 1: not only a way to stand up a restaurant in
19:53
Speaker 1: a new trade area and in a fraction of the
19:55
Speaker 1: capex investment in time, but also while they cook their
19:58
Speaker 1: own food to ensure there is consistency and the quality
20:03
Speaker 1: of the cuisine. We handle most everything else, from cleaning
20:07
Speaker 1: and sanitization to management at the front of the house.
20:09
Speaker 1: And then we have a consumer marketing channel that enables
20:12
Speaker 1: consumers to order from more than one concept. So if
20:15
Speaker 1: you have different taste preferences within your household, whether that's
20:19
Speaker 1: you know, my son wanting pizza for the night, but
20:21
Speaker 1: my wife wanting sushi and and I wanting salad, you
20:24
Speaker 1: can order that under one ticket. And so we deliver
20:26
Speaker 1: a fair amount of volume to our restaurant partners that
20:29
Speaker 1: occupy our premises as well. Um. So that's the general
20:32
Speaker 1: business model and how what we're doing through this time
20:35
Speaker 1: to help enable restaurants to navigate these very challenging times.
20:40
Speaker 1: You know, and I know you have been raising capital
20:42
Speaker 1: as well in terms of, uh, you know, supporting your
20:45
Speaker 1: expansion plans. Tell us about the growth that you have
20:47
Speaker 1: been seeing, and I am curious about, particularly in the pandemic,
20:51
Speaker 1: what kind of growth you've seen. Yeah, Look, we're very
20:55
Speaker 1: fortunate that our facilities are full. Um, we have great
20:59
Speaker 1: restaurant nurs um that we operate hand in hand with
21:03
Speaker 1: and and they're doing quite well through this. Through this
21:06
Speaker 1: time period as well, we've been laser focused on our
21:10
Speaker 1: own unit economics and building a foundational business that can
21:13
Speaker 1: scale UM. At the same time, critical to that is
21:17
Speaker 1: making sure that our restaurant partners operate profitably within our
21:21
Speaker 1: sites as well. We are very fortunate that Google Ventures
21:27
Speaker 1: g V is the largest shareholder in the company, alongside
21:30
Speaker 1: you know, great blue chip investors like Fidelity Investments and
21:33
Speaker 1: large real estate funds like ours, our Reality and Difico
21:37
Speaker 1: West UM. And you know, as we continue to grow
21:40
Speaker 1: and scale our business, uh, you know, we intend to
21:43
Speaker 1: continue to lean on the capital markets to help fund
21:47
Speaker 1: our expansion as we enter into our serious ce rays
21:49
Speaker 1: in the middle part of the next year. So you're
21:51
Speaker 1: in Chicago, Pasadena, Scottsdale, Austin. If I'm looking at your
21:54
Speaker 1: website and reading it correctly, and to me it almost
21:57
Speaker 1: sounds like kind of a new hey, new version and
22:02
Speaker 1: innovative take on food courts. Yeah, exactly right. You know,
22:07
Speaker 1: our focus, you know, through our our existing facilities has
22:11
Speaker 1: been driving consumer preference UM to our restaurant brands UM
22:17
Speaker 1: in the way that consumers wanted and you know, this
22:20
Speaker 1: whole idea of off premise certainly has accelerated through COVID,
22:24
Speaker 1: but there's really nothing new. We are consider ourselves to
22:28
Speaker 1: be a pioneer in the industry being founded. Uh and
22:33
Speaker 1: you know part of that when we got into this,
22:35
Speaker 1: we saw the trends, the trends Worth Calgary every year
22:40
Speaker 1: for delivery for the years leading up to COVID. And
22:43
Speaker 1: you look at the trends elsewhere around the world, whether
22:46
Speaker 1: it's the Middle East or Asia, parts of Europe that
22:48
Speaker 1: have seen delivery penetration to the tune of plus, while
22:52
Speaker 1: we in the US have seen that, you know, not
22:54
Speaker 1: including drive around seven to and so there was there
22:59
Speaker 1: we were lagging the rest of the world. And clearly
23:01
Speaker 1: with the trends that we saw from retail over the
23:04
Speaker 1: past decade, that consumer preference for convenience and nomini channel,
23:09
Speaker 1: with the market power and growing strength of millennials and
23:14
Speaker 1: gen z um that there would be new ways that
23:17
Speaker 1: consumers would and new areas where consumers would like to
23:20
Speaker 1: consume their food that proved to be accelerated through COVID.
23:24
Speaker 1: UM it was definitely jarring uh too many UM. I
23:28
Speaker 1: think uh that as adoption curve stays the same. We're
23:32
Speaker 1: on a very steep slope of it, but you know,
23:36
Speaker 1: we have been a tool in that process where like
23:39
Speaker 1: you said on on what is more of a traditional
23:41
Speaker 1: food corp but one in a virtual nature that allows
23:44
Speaker 1: consumers to have choice and allows restaurant brands to drive
23:48
Speaker 1: the same volume through smaller flipmrints. Hey, listen, I do
23:50
Speaker 1: wonder Michael, and we've just got about a minute and
23:52
Speaker 1: a half left here. I mean, will you say yes
23:55
Speaker 1: to anybody in terms of restaurants or do you think
23:57
Speaker 1: about kind of the mix that you are offering at
24:00
Speaker 1: a specific location. You know, it's an excellent question, Carol.
24:04
Speaker 1: We're very data focused as a company, is not surprising
24:08
Speaker 1: when you're largist shareholders Google Ventures UM we we we
24:12
Speaker 1: we you know, tailor or curate our facilities in a
24:15
Speaker 1: way that we're providing ultimate choice to our end consumer,
24:19
Speaker 1: but also work with brands that we know can be
24:22
Speaker 1: successful in that particular trade area. And so yes, we
24:25
Speaker 1: are looking for a cohesive group of brands UM that
24:29
Speaker 1: are synergistic to each other and provide the end consumer,
24:33
Speaker 1: you know, ultimate choice and not to be cliche to
24:36
Speaker 1: our brand of Kitsch United mix, but you know a
24:39
Speaker 1: healthy mix of different options. That's really cool. Um, I
24:42
Speaker 1: don't see New York on it. It just quickly thirty seconds.
24:45
Speaker 1: Is New York something you guys would consider? Is that
24:47
Speaker 1: kind of just a tough market to come into very
24:50
Speaker 1: very quickly if you could. We absolutely are coming to
24:54
Speaker 1: New York City. We're under construction at a site in
24:58
Speaker 1: man h Anhattan and it's you. We're excited to serve
25:02
Speaker 1: the people in New York City very very soon. All right,
25:05
Speaker 1: very cool? Um, Michael, come back because I'd love to
25:07
Speaker 1: hear more on what you guys are doing in and
25:09
Speaker 1: hear more as you continue to grow. Michael Montagan. Oh,
25:12
Speaker 1: he is CEO at Kitchen's United. Really interesting take in
25:16
Speaker 1: terms of what they are doing and bringing different restaurant
25:19
Speaker 1: brands together under one roof. Joining us on the phone
25:21
Speaker 1: from Los Angeles. All right, that'll do it for this
25:25
Speaker 1: edition of Bloomberg Markets. Carol Masser in for Paul Sweeney
25:28
Speaker 1: and Bonnie Quinn. Thanks for listening to Bloomberg Markets podcast.
25:32
Speaker 1: You can subscribe and listen to interviews at Apple Podcasts
25:36
Speaker 1: or whatever a podcast platform you prefer. I'm Bonnie Quinn
25:39
Speaker 1: I'm on Twitter at Bonnie Quinn and Paul Sweeney. I'm
25:42
Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can
25:45
Speaker 1: always catch us worldwide at Bloomberg Radio