Latest / What the Flux / David Jones gets a revamp | The $150 billion aftermath of Trump & Musk's break up| Hermès Australia bags a profitable year

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David Jones gets a revamp | The $150 billion aftermath of Trump & Musk's break up| Hermès Australia bags a profitable year · What the Flux

• 0:05
  Speaker 1: This is what the Flux. I'm Brett and.
• 0:07
  Speaker 2: I'm just in as Monday, the ninth of June.
• 0:09
  Speaker 1: No rest for us today, Juzzy boy. Now get this one.
• 0:12
  Speaker 1: Australia is officially back in a per capita recession. While
• 0:15
  Speaker 1: GDP increased in the March quarter by zero point two percent,
• 0:19
  Speaker 1: it dropped by zero point two percent per person or
• 0:22
  Speaker 1: per capita in that quarter. And while this sounds bad,
• 0:25
  Speaker 1: it's just a technical measure and it might actually be
• 0:27
  Speaker 1: helpful for the RBA if it wants to justify another.
• 0:30
  Speaker 2: Drop thingers crossby Man. Speaking of the RBA dropping cash rates, now,
• 0:33
  Speaker 2: we know that when the cash rate drops, all lenders
• 0:36
  Speaker 2: start clamoring your business once again, which is why it
• 0:38
  Speaker 2: is such a good time to look at refinancing your homelan.
• 0:41
  Speaker 2: We cover it all in the Flux app, including script
• 0:44
  Speaker 2: for negotiating your homelan. Make sure it download the Flux
• 0:46
  Speaker 2: app and check it out.
• 0:47
  Speaker 1: Three highly informative stories today, Juzzy boy, let's do it
• 0:50
  Speaker 1: for our first. David Jones is in the red again,
• 0:54
  Speaker 1: but its private equity owners are going all in with
• 0:56
  Speaker 1: a one hundred and ninety million dollar debt boost.
• 0:59
  Speaker 2: A modern gloves for a very old name, b Man,
• 1:01
  Speaker 2: So tell me more.
• 1:02
  Speaker 1: Well, David Jones was founded in eighteen thirty eight and
• 1:05
  Speaker 1: is the oldest department store in Australia.
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  Speaker 2: Now you might remember it was acquired by Woolworth's Holdings,
• 1:09
  Speaker 2: a South African retailer, back in twenty fourteen for two
• 1:12
  Speaker 2: point one billion dollars.
• 1:13
  Speaker 1: Not the Woolworth's in Australia.
• 1:15
  Speaker 2: But be Man, it's fair to say Wooworth's Holdings, the
• 1:18
  Speaker 2: South African company, took it from coture to end of
• 1:21
  Speaker 2: season clearance racks. Yeah.
• 1:22
  Speaker 1: Then in twenty twenty two it was acquired by the
• 1:25
  Speaker 1: private equity company Anchorage Capital for one hundred million dollars.
• 1:28
  Speaker 2: And now David Jones is a private company, it doesn't
• 1:30
  Speaker 2: need to publicize its accounts anymore.
• 1:32
  Speaker 1: But filings with ACIK show that David Jones just slid
• 1:35
  Speaker 1: to a seventy four point four million dollar loss in
• 1:38
  Speaker 1: the twelve months to June twenty twenty.
• 1:40
  Speaker 2: Three, despite turning a two hundred and eighty nine million
• 1:43
  Speaker 2: dollar profit in the five months prior.
• 1:45
  Speaker 1: But Jaziboy Anchorage is not given up.
• 1:48
  Speaker 2: In fact, it's doubling down. Be Man, It's investing sixty
• 1:50
  Speaker 2: five million dollars into tech upgrades for David.
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  Speaker 1: Jones on top of a one hundred ninety million dollar
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  Speaker 1: debt facility.
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  Speaker 2: And that is a lot of money going into a
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  Speaker 2: company in a declining set of retail.
• 2:01
  Speaker 1: Yeah, so what is the key learning here?
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  Speaker 2: The department store business model ain't what she used to be.
• 2:05
  Speaker 1: In fact, Juzzy Boy, over the last two decades, the
• 2:08
  Speaker 1: entire segment has been in structural decline.
• 2:10
  Speaker 2: Department stores once the crown jewels of retail.
• 2:14
  Speaker 1: For Juzzy Boy. Another example in the US, Barney's New
• 2:16
  Speaker 1: York shut down in twenty nineteen after nearly a century
• 2:20
  Speaker 1: of selling luxury clothes.
• 2:21
  Speaker 2: Then there was Lord and Taylor, another department store in
• 2:24
  Speaker 2: the US, the shutdown after one hundred and ninety five years.
• 2:26
  Speaker 1: And Hudson's Bay, one of the oldest department stores in
• 2:28
  Speaker 1: the world, closed ninety six stores just last week.
• 2:31
  Speaker 2: Then we've got Macy's in Nordstroam. They've both shrunked their
• 2:34
  Speaker 2: store footprint and pivoted heavily to e commerce.
• 2:36
  Speaker 1: So David Jones isn't just facing a bad quarter. It's
• 2:39
  Speaker 1: up against a global shift in how people shop, and.
• 2:42
  Speaker 2: The man history suggests that not everyone makes it through.
• 2:45
  Speaker 1: For our second story, Tesla saw one hundred and fifty
• 2:48
  Speaker 1: billion US dollars wiped from its value a late last
• 2:51
  Speaker 1: week after Elon Musk and Donald Trump's bromance was officially over.
• 2:56
  Speaker 2: This could be bigger than Chris Rock and Will Smith
• 2:58
  Speaker 2: be Man. He's potentially more bruisy, So tell me more.
• 3:00
  Speaker 1: Well, juzzy boy. We know that Elon is the founder
• 3:03
  Speaker 1: of Tesla and part time internet troll YEP.
• 3:05
  Speaker 2: He's been a key part of Tesla's two hundred and
• 3:07
  Speaker 2: twenty x growth since it listed on the Nasdaq in
• 3:10
  Speaker 2: twenty ten, and late last year, when President Donald Trump
• 3:13
  Speaker 2: was re elected as the forty seventh president, Tesla investors
• 3:16
  Speaker 2: were frothened. That was because Trump and Musk were in
• 3:19
  Speaker 2: full bromance mode.
• 3:20
  Speaker 1: But as basically we all predicted, this brotherhood has come
• 3:24
  Speaker 1: to a very swift ending. After Musk criticized Trump's new Big, Bad,
• 3:28
  Speaker 1: Beautiful Bill yep.
• 3:29
  Speaker 2: Musk claimed it undid all of his doge government spending carts.
• 3:33
  Speaker 1: Then Trump tweeted back that Musk had Trump derangement syndrome,
• 3:37
  Speaker 1: and then.
• 3:38
  Speaker 2: There was a live tweeting match between the two of them, or.
• 3:40
  Speaker 1: As we like to call it insult Tennis.
• 3:42
  Speaker 2: Next minute, Tesla's share price filled fourteen percent.
• 3:45
  Speaker 1: And Juzzy boy. The worry isn't just brused egos here,
• 3:48
  Speaker 1: there's fear for what this may mean for Tesla.
• 3:51
  Speaker 2: Yeah. Trump even signaled he may terminate government contracts with
• 3:54
  Speaker 2: all of Musk's companies.
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  Speaker 1: So it's no surprise that Tesla had its biggest one
• 3:58
  Speaker 1: day fall ever.
• 4:00
  Speaker 2: So what is the key leading here?
• 4:01
  Speaker 1: When you're trying to build the future of any industry,
• 4:03
  Speaker 1: it does pay to stay friendly with the current government.
• 4:06
  Speaker 2: Aka the people writing the laws.
• 4:09
  Speaker 1: For example, Jazi Boyd, Tesla has been heavily fueled by
• 4:11
  Speaker 1: government love over the years.
• 4:13
  Speaker 2: Electric vehicle buyers received subsidies which help drive sales for
• 4:16
  Speaker 2: Tesla cars.
• 4:17
  Speaker 1: There were favorable conditions for Tesla as Trump pushed tariffs
• 4:20
  Speaker 1: on European and Chinese electric vehicle makers.
• 4:23
  Speaker 2: And then there have been big procurement deals like Tesla's
• 4:26
  Speaker 2: supplying government fleets.
• 4:27
  Speaker 1: They're on top of that, Tesla investors were hoping for
• 4:30
  Speaker 1: more loose regulation around self driving technology, and.
• 4:33
  Speaker 2: That's why Tesla's share price jumped nearly fifteen percent when
• 4:35
  Speaker 2: Trump was first elected.
• 4:37
  Speaker 1: And Tesla's share price jumped sixty two percent in the
• 4:40
  Speaker 1: thirty days after the election.
• 4:41
  Speaker 2: But all of this can go in an instant when
• 4:43
  Speaker 2: the bromance breaks.
• 4:44
  Speaker 1: Up, and if Trump creates more difficult conditions for Tesla,
• 4:47
  Speaker 1: it could chip away at Tesla's future revenue and market share.
• 4:50
  Speaker 1: For our third and final Storymez Australia is defying the
• 4:55
  Speaker 1: rise in cost of living after records says in Australia
• 4:58
  Speaker 1: because many people just can't stop buying damn Burken bags.
• 5:01
  Speaker 2: While some people are cutting back on brunch, be men.
• 5:03
  Speaker 2: Ermez customers are splashing four thousand dollars on a phone case.
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  Speaker 2: So what is going on here?
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  Speaker 1: Well? Ermez was founded in eighteen thirty seven in Paris
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  Speaker 1: and is known for its ultra luxury handbags, silk scarves
• 5:14
  Speaker 1: and its leather goods justin Boy.
• 5:15
  Speaker 2: And of course the famously unattainable Burken bag.
• 5:19
  Speaker 1: We'd be talking ranging from thirty thousand dollars to five
• 5:23
  Speaker 1: hundred thousand US dollars.
• 5:24
  Speaker 2: And be man who said cost of living crisis because
• 5:26
  Speaker 2: it certainly wasn't Umez customers.
• 5:28
  Speaker 1: We'll get this one. Ermez Australia racked up five hundred
• 5:31
  Speaker 1: and seventy eight million dollars in revenue in twenty twenty four,
• 5:34
  Speaker 1: and that.
• 5:34
  Speaker 2: Was a jump of twenty one percent from twenty twenty three.
• 5:37
  Speaker 1: Doll made one hundred and four point five million dollars
• 5:39
  Speaker 1: per Rofferini.
• 5:40
  Speaker 2: And b Man. Ermez has more than doubled its revenue
• 5:42
  Speaker 2: in Australia in just the last four years.
• 5:44
  Speaker 1: While other luxury brands are slowing down globally, Ermez continues
• 5:48
  Speaker 1: to ride high because.
• 5:48
  Speaker 2: Luxury isn't dead. It's just very very exclusive.
• 5:52
  Speaker 1: Interesting call. So what would you say is the key
• 5:54
  Speaker 1: learning here?
• 5:55
  Speaker 2: Most products get less desirable the more expensive they are,
• 5:58
  Speaker 2: but some luxury goods operate in.
• 5:59
  Speaker 1: A different world, into the concept of a veblen good,
• 6:03
  Speaker 1: a type of product where demand actually increases as the
• 6:06
  Speaker 1: price increases.
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  Speaker 2: The more exclusive and price it is, the more people
• 6:09
  Speaker 2: want it. In fact, the man Ames controls supply so
• 6:12
  Speaker 2: tightly the buyers often have to build up a purchase
• 6:15
  Speaker 2: history just to be offered a bag.
• 6:17
  Speaker 1: And not only are Ome's bags a status symbol, but
• 6:20
  Speaker 1: supposedly they're also a good investment as well.
• 6:22
  Speaker 2: Amezz's burken bags had an average annual increase in value
• 6:25
  Speaker 2: of fourteen point two percent between nineteen eighty and twenty fifteen.
• 6:29
  Speaker 1: That outperformed the S and P five hundred, which returned
• 6:31
  Speaker 1: an average of ten percent. So not only do Burke
• 6:33
  Speaker 1: and buyers get to sling a little bit of luxury
• 6:36
  Speaker 1: on their shoulder, but they get to sell it for
• 6:38
  Speaker 1: a great return.
• 6:39
  Speaker 2: If they ever take it off. Yep, Flex Am refinance
• 6:42
  Speaker 2: your homeland can say thousands of dollars every single year,
• 6:45
  Speaker 2: but the biggest thing we hear from the flexdam is
• 6:46
  Speaker 2: how do I even do it? That's why we've broken
• 6:48
  Speaker 2: it down in the Flux app. Make sure to check
• 6:50
  Speaker 2: it out in the Flex app to renegotiate your homeland.
• 6:52
  Speaker 1: Thanks for listening and we'll see you on Wednesday.