Bloomberg Businessweek Weekend - October 17th, 2025

Summary

Bloomberg Businessweek Weekend Podcast – October 17, 2025

Overview

This episode of Bloomberg Businessweek Weekend, hosted by Carol Massar and Tim Stenovec, dives deep into the forces shaping today's complex economy, with a particular focus on insights from the C-suite at major companies. Topics include the ongoing US government shutdown and its impact, the influence of AI on real estate and industry, how tariffs are reshaping supply chains and margins, the "feminization" of wealth and the great transfer, and exclusive interviews ranging from industrial leaders to mayors tackling urban challenges and media personalities reinventing their fields.

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Key Discussion Points and Insights

1. State of the Economy: Government Shutdown, Fed Moves, and Corporate Indicators

Timestamps: 01:57–03:27

• Earnings season begins with major banks, notably JPMorgan Chase, reporting strong dealmaking and trading profits. However, leaders signal caution about consumers and cooling sectors.
• The ongoing US government shutdown, now in its third week, has left a gap in official economic data, pushing reliance on C-suite commentary to gauge macroeconomic trends.
• Fed Chair Jay Powell signals another quarter-point rate cut, adding to an uncertain policy backdrop.

Memorable Quote:

“We lean big time on VO from the C Suite for clues on the macro environment.” — Carol Massar (02:17)

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2. Big Banking: Warnings and Rivalries

Timestamps: 03:27–04:38

• Jamie Dimon, CEO of JPMorgan Chase, warns on risks lurking in the financial system after his bank’s losses from auto lender Tricolor Holdings, using the phrase: “There’s never just one problem or one cockroach.”
• Mark Lipschultz, CEO of Blue Owl Capital, counters by suggesting banks should examine their own loan books.

Memorable Quotes:

“When you see one cockroach, probably more, you know, and so we should...everyone should be forewarned on this one.” — Jamie Dimon via Carol Massar (03:35) “Jamie Dimon should be scouring his own books if he wants to squash more bugs.” — Carol Massar (04:01)

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3. Logistics Real Estate & AI: Prologis

Guest: Dan Letter, President & incoming CEO, Prologis
Timestamps: 04:38–13:24

• Prologis posted record leasing—62 million sq. ft. in Q3—indicating strong industrial real estate demand, especially among well-capitalized, large customers (Amazon, Home Depot, FedEx, etc.).
• Customers are shifting from caution to optimism, compelled to make long-term decisions despite macro uncertainty.
• Expansion is broad-based globally, with a focus on “build-to-suit” projects where properties are custom-built after contracts with clients.
• AI is profoundly affecting Prologis both operationally and by spurring demand for data centers. The company holds 5.2 GW of power for data center development.
• Labor shortages and higher construction costs (up to 25% above current market rents) challenge the pace of data center and warehouse growth.

Notable Quotes & Moments:

“We leased 62 million sq. ft.…the equivalent of leasing Central Park in Manhattan twice over again in one quarter.” — Dan Letter (04:42) “We see our customers actually getting off their back foot...moving from caution to optimism.” — Dan Letter (05:54) “AI is here and it’s big...the next wave in the modern economy is the digital economy. And AI and data centers are the logistics of that digital economy.” — Dan Letter (09:10) “The rent to build that next building is actually 25% higher than market rents today.” — Dan Letter (12:01)

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4. Fashion under Pressure: Levi Strauss Amid Tariffs

Guest: Harmeet Singh, Chief Financial & Growth Officer, Levi Strauss
Timestamps: 13:45–29:26

• Levi's reports four consecutive quarters of high single-digit growth and record gross margins, raising full-year guidance despite tariff pressures.
• The business is resilient across all consumer income levels—Blue Tab (premium), Red Tab (upper-income), and Signature (lower-income, Walmart).
• Tariffs from China and other regions are beginning to affect margins, but Levi’s diversified supply chain (mainly SE Asia, minimal China/India) lessens the impact.
• The company’s strategic pivot is to become more of a “denim lifestyle” retailer beyond just jeans.
• Geographic expansion, especially in China, is a growth priority; currently, only 2–3% of sales are from China, where the market is soft but brand affinity is strong.

Notable Quotes:

“Consumer strength really strong...That’s where we were able to raise the full year guidance.” — Harmeet Singh (13:45) “Our products are well segmented depending on the income profile...We’re leading with product innovation rather than price.” — Harmeet Singh (23:24) “The company that we are building...we will be a market leader...especially because the denim category is accelerating. We have seen the acceleration in the U.S. and outside, and that’s largely driven by the world becoming more casual.” — Harmeet Singh (25:04)

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5. Industrial Supply and Trade Risk: Fastenal

Guest: Daniel Flornis, CEO, Fastenal
Timestamps: 30:05–39:23

• Fastenal saw double-digit year-on-year growth, though missed some analyst targets due to weaker-than-expected pricing.
• The firm has been actively shifting supply chains beyond China and Taiwan, increasing sourcing from India, Bangkok, and even shipping through Canada/Mexico to avoid tariffs.
• The industrial environment remains sluggish; project delays persist and ISM PMI has stayed below 50 since late 2022.
• AI is driving strong demand for Fastenal’s offerings in data center construction and maintenance, while the company itself is adopting AI to improve efficiency.

Notable Quotes:

“It's reducing our customers’ exposure to any market...It’s diversifying your supply chain so your eggs are not all in one basket.” — Daniel Flornis (35:26) “Odd in the fact that...it’s just so damn fluid and there’s so many things that occur from week to week, month to month that are outside the norm, but the fundamentals still work.” — Daniel Flornis (39:07)

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6. Urban Renewal and Crime Reduction: Baltimore

Guest: Brandon Scott, Mayor of Baltimore
Timestamps: 40:02–54:40

• The federal shutdown makes citizens uneasy; over 12,000 Baltimoreans work for the government.
• Mayor Scott highlights a 30% reduction in homicides in a comprehensive crime prevention program. This involves targeting likely perpetrators/victims, leveraging community-based violence intervention, and attacking gun trafficking.
• Scott opposes deploying the National Guard, advocating instead for restoration of federal grant funding and community-based solutions.
• Emphasizes the importance of mayors in driving real change and calls for more localized, pragmatic leadership.
• Major investments ($4B+ inbound, $7B downtown planned) and continued focus on streamlining business and zoning reforms to attract business, especially in tech and life sciences.

Notable Quotes:

“We have the fewest amount of homicides through any October 7th on record today. That is a big change.” — Brandon Scott (46:12) “We go and we identify those who are most likely to be the victim or perpetrator of gun violence and…give them opportunities to change their life, and if not, we remove them via law enforcement.” — Brandon Scott (46:55) "If the president wants to help us, he should restore grants and funding that was cut to organizations that help." — Brandon Scott (48:41)

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7. The Great Wealth Shift: Women and "Sideways Inheritances"

Guest: Jamie McGira, Head of U.S. Wealth Advisory & Retirement, BlackRock
Timestamps: 55:35–64:58

• Wealth transfer dynamics are shifting: more women are inheriting vast assets due to divorce or succession, with women now controlling $365B in the world’s 500 richest fortunes.
• 70% of women leave their husband's financial advisor within a year of divorce or death, demanding new approaches to wealth management.
• Women are often (contrary to stereotype) moderate to aggressive investors and increasingly value “purpose” alongside profit—including impact investing, philanthropy, and values-based allocations.
• The big picture: women currently control 30% of global wealth; this is expected to rise to 50% by 2030 and 70% by 2070.

Memorable Quotes:

"They want to be served differently. 70% of women leave their husband's financial advisor after a divorce or a death within one year.” — Jamie McGira (59:29) “The majority of them were actually moderate to aggressive because they saw the power…of actually gaining wealth through the capital markets.” — Jamie McGira (55:17) “It’s not time in the market or timing the market, it’s time in the markets.” — Jamie McGira (63:47)

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8. Screen Time & Cultural Impact: Chef Courtney Storer (“The Bear”) and Lucy Guo (Scale AI, Passes)

Guests: Courtney Storer (The Bear); Lucy Guo (Scale AI, Passes)
Timestamps: 69:03–80:14

• Courtney Storer describes role as both culinary consultant and hands-on coach for actors (no hand doubles—real culinary skill). Emphasizes authenticity, teamwork, and the high-pressure yet camaraderie-rich reality of kitchen life.
• Lucy Guo discusses Passes, a platform for creators (without adult content), its strong retention, organic growth, and insights into entrepreneurial success. Advocates for a short stint in college for networking, and practical skill acquisition. She’s optimistic about AI, seeing it as a tool to empower rather than replace human ingenuity.

Notable Quotes:

"Everything you see on the show we run it like an actual restaurant." — Courtney Storer (69:27) “I learn so much about who I am as an individual by the challenge of, you know, running restaurants...I’ve learned so much from every single person that I’ve been in a kitchen with.” — Courtney Storer (65:16) “Anyone can make money. It’s more so like the amount of people willing to put in the time to make the content.” — Lucy Guo (75:44) “I think that we should view AI as our co-pilot and not something that's going to replace us.” — Lucy Guo (79:52)

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Timeline of Key Segments

| Timestamp | Topic/Guest | |---------------|--------------------------------------------------------------| | 01:57 | Economic overview; reliance on C-Suite voices | | 03:27 | Jamie Dimon, banks, risk, and rivalries | | 04:38 | Dan Letter (Prologis); logistics real estate & AI | | 13:45 | Harmeet Singh (Levi Strauss); fashion, tariffs, supply chain | | 30:05 | Daniel Flornis (Fastenal); industrial supply, AI, tariffs | | 40:02 | Brandon Scott (Mayor of Baltimore); crime, governance | | 55:35 | Jamie McGira (BlackRock); women, wealth, and investing | | 69:03 | Screen Time highlights: Courtney Storer, Lucy Guo |

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Notable Quotes (with Speaker and Timestamp)

• “There’s never just one problem or one cockroach.” – Jamie Dimon via Carol Massar (03:35)
• “AI and data centers are the logistics of that digital economy.” – Dan Letter (09:10)
• “Our future is going to be about denim lifestyle.” – Harmeet Singh (24:37)
• “It's reducing our customers' exposure to any market... diversifying your supply chain.” – Daniel Flornis (35:26)
• “We have the fewest amount of homicides through any October 7th on record today.” – Brandon Scott (46:12)
• “70% of women leave their husband's financial advisor after a divorce or a death within one year.” – Jamie McGira (59:30)
• “I think that we should view AI as our co-pilot and not something that's going to replace us.” – Lucy Guo (79:52)
• “Everything you see on the show we run it like an actual restaurant.” – Courtney Storer (69:27)

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Takeaways

• C-suite perspectives are vital when government data is lacking, especially during periods of uncertainty.
• AI is transforming every sector—from warehousing to apparel, to industrial supply.
• Tariffs and supply chain realignment are reshaping margins, strategies, and global sourcing.
• Women’s control of wealth is growing rapidly, with shifting behaviors and expectations for financial services.
• City leadership and “on-the-ground” pragmatism are crucial in tackling complex issues like urban crime.
• Authenticity, adaptability, and innovation—whether in kitchens, wealth management, or creator economies—are the new hallmarks of success.

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This summary captures the major stories and voices featured in the Bloomberg Businessweek Weekend episode for October 17th, 2025, highlighting economic trends, business evolution, and the people at the forefront of today’s biggest challenges and opportunities.

Transcript

[Tim Stenovec]

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[Tim Stenovec (advertisement and host segments)]

Week Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Massar and Tim Stenevc on Bloomberg Radio.

[Carol Massar]

Hi everyone. Welcome to the Bloomberg Businessweek Week Weekend podcast. Earnings season is underway in the U.S. it kicked off with the big banks this past week. Also, Fed Chair Jay Powell signaled the US Central bank is on track to deliver another quarter point interest rate cut later on this month. And then there's the U.S. government shutdown, now in its third week. You can read all about [e-mail] and on the Bloomberg and you know about that government shutdown that meant another week without U.S. economic data from the U.S. government. And so we lean big time on VO from the C Suite for clues on the macro environment. This hour we'll hear from the CFO of Levi Strauss and the CEO of the industrial supplies company Fastenal. They've got great reads on the US Economy. And the C Suite is really where we start this hour with one CEO in particular and one voice on Wall street that we all Pay attention to. JPMorgan Chase CEO Jamie Dimon, JP Morgan and the other big banks as we mentioned reported earnings this week and generally speaking all appear to be in good dealmaking is back and trading profits are booming. And yet there were warnings from executives that have tempered the mood on consumers and some signs of sectors that are cooling. A warning too from Jamie Dimon who used his bank's losses from auto lender Tricolor holdings to say there's never just one problem or one cockroach in his own words equipped some of his non bank rivals have taken as a shot at them.

[Dan Letter]

You know we think we're okay and.

[Harmeet Singh]

Other stuff but I, my, my antenna.

[Carol Massar]

Goes up when things like that happen.

[Harmeet Singh]

And I shouldn't say this but when.

[Dan Letter]

You see one cockroach probably more, you.

[Harmeet Singh]

Know and so we, we should everyone.

[Jamie McGira]

Should be forewarned on this one.

[Carol Massar]

That's JP Morgan's Jamie Dimon. Now Blue Owl Capital boss Mark Lipschultz fired back. He came on Bloomberg. He said the issue was in loans that banks led. So Jamie Dimon should be scouring his own books if he wants to squash more bugs. Read more about the back and forth it' on the Bloomberg [e-mail] other companies kicking off earnings too this week. And it's kind of no surprise. AI artificial intelligence. Talk about that. Has been dominating earnings conversations for the past year and that includes AI in the real estate market. Prologis develops and manages logistical warehouses for the biggest companies out there. With more than 1.3 billion square feet in 20 countries, Prologis reported better than expected quarterly earnings this past week, boosted its forecast and discussed data center opportunities. Dan Letter is president and incoming CEO of prologis. He takes over as CEO in January. He joined Bloomberg's David Gora and me.

[Dan Letter]

Coming off this earnings call. This was certainly a topic for us. We had a tremendous quarter. As a matter of fact, we broke a record this quarter for leasing. We leased 62 million square feet of space throughout our 1.3 billion square foot foot portfolio. And you think about that in context. 62 million square feet is the equivalent of leasing Central park in Manhattan twice over again in one quarter. So our team working tirelessly around the world leased 1 million square feet a business day during the third quarter. And certainly these macro business trends are telling by our customers who are the front line of the economy.

[Tim Stenovec]

You look at the softer data and there is still some anxiety among a lot of business leaders about where things are headed. Maybe that's restricting them from making some of the capex expenditures that they would have other otherwise. You're detailing for us very strong numbers. And I wonder what that says to you just about the capacity of these business leaders to look through or past the uncertainty surrounding policy, including trade policy. Just give us a sense of the moment that we're in right now, as you understand it from talking to your customers about how they're feeling about the business climate going forward.

[Dan Letter]

Sure. It's a great question. One of the things we're most proud of at Prologis is our customer franchise. We have unique proprietary data and we have unique relationships. Just given the size and scale of these relationships and after what has really been two to three years of uncertainty going back to rate hikes two and a half years ago, we see our customers actually getting off their back foot. What we've seen over this last quarter is actually customers moving from caution to optimism.

[Carol Massar]

Wow. Why? Because things are getting settled in terms of trade tariff. Like, what is it that has calmed some of your customers?

[Dan Letter]

I think our customers realized after a couple of sluggish years of not making many decisions that they have to make long term decisions. And that's what they do when they do business with Prologis. And they have to look through the short term noise in order to ensure that they're positioned for growth going forward.

[Carol Massar]

So you're talking about Amazon, Home Depot, FedEx, UPS, Giga, cloud technology. I mean, these are some of your big customers. So you're talking about these guys are feeling more sure about the outlook than maybe they did over the last couple of years.

[Dan Letter]

Yeah, precisely. As a matter of fact, coming out of a cycle, we're really in just a classic real estate cycle right now. And what you're seeing typically at this point point in the cycle is it's the big, well capitalized customers that lead the way out of this part of the cycle.

[Tim Stenovec]

This is a basic question you'll forgive me for, but when we talk about warehouses, what are we, what are we talking about? Are these just simply places to store stuff or are they places where there's a lot of movement, a lot of products coming, coming in and out? When we talk about sort of the bread and butter of your business, what are you, what are you building? What are you leasing out?

[Dan Letter]

Yeah, thanks for that question. We own nearly 6,000 buildings. These buildings are located in 20 countries in markets that represent about 78% of the world GDP. As a matter of fact, in 2024, we had the equivalent of nearly 3% of the world GDP go through these buildings. Our focus in building this portfolio, curating this portfolio over the last 42 years is having the highest quality, best located logistics, real estate close to consumers.

[Carol Massar]

So where are you geographically building out the most and you know, where are you looking to kind of increase your square footage or buy properties or buy land?

[Dan Letter]

Well, the way we've set this organization up is our teams are calibrated to look for good deals around the world and we're heavily focused certainly this year on build the suits with our customers. We're actually going to, we're on track for maybe our highest build to suit volume ever. And what does that mean? That means we have a contract in place with these customers before we start building for them. And we're seeing that broad based across most of the sectors as well as geographies spread throughout the world.

[Tim Stenovec]

I bet you can't do an interview without being asked about AI, so forgive me, we're going to do it. I want to ask about it in two ways. The first is sort of how it's changing the way that you conduct your business. And then the second question is picking up on what Carol said, you looking at the demand for data centers, maybe changing your business tack as well. Where do you see opportunity as this revolution, as it's called, continues and there's the need for, for more space for, for processing all of this data?

[Dan Letter]

Yeah, it's AI is, is, is here and it's, it's, it's big and it's big. At prologis, certainly we have all sorts of different operational and tools that we're building to make our teams more efficient and to be able to help them move faster. But when you think of AI and Prologis, we announced today we now have 5.2 gigawatts of power either secured or in the advanced stages of being secured in sites, mostly tier 1, tier 2 sites in the United States and then the tier 1 markets called flapd or the Double M in Europe. So prologis is now we've long been in the higher and better use business but again, given that footprint, we have close to these consumers. Well, the next wave in the modern economy is the digital economy. And AI and data centers are the logistics of that digital economy.

[Carol Massar]

We're talking about Dan Letter. He's president prologis. He is incoming president, incoming CEO, excuse me, takes over that spot come January. Wait, Dan, so, so give me an idea just to have. Explain your business. How much is logistical warehousing right now? How much is data center and where do you see the most growth going forward? Especially on a day where Metta, Microsoft, BlackRock, there's more all doing data center, you know, deals. And it feels like a lot's happening in Texas to point that out as well. So give us an idea of your mix today and where the growth is happening.

[Dan Letter]

Well, I look at our growth in our base portfolio. We own or control 14,000 acres of land close to these consumption centers that I mentioned. We can build out another 240 million square feet out of that land bank. That's a tremendous amount of space. And when it comes to data centers, this power that we've secured, we've long been in the higher and better use business. Think about the fact that logistics and warehouses is typically the cheapest house on the block. We've always been in the business of optimizing that real estate value for our investors. And data centers are certainly a trend right now that we're able to capitalize on given the footprint and the raw material that we own and control.

[Tim Stenovec]

Just want to note a headline here across the Bloomberg terminal that a judge has blocked federal firings during the government shutdown for now. We were talking about that a few moments ago as we were talking about the beige book from the Federal Reserve, Dan, and what that was telling us about the state of this economy. And one thing therein is how difficult it is to find workers, particularly workers to do construction. And I think a theme to the AI story is amid all of this demand, it's hard to get folks to build the data centers that we need to buffet, all of it. And I wonder if your company is dealing with that as well. Just the difficulty of kind of keeping pace with how fast all this is moving.

[Dan Letter]

Yeah, thanks for that question. I think about that as we look at what is the replacement cost rent to build the next marginal building, whether it's logistics or data centers. And we look at that right now and the cost, the rent to build that next building is actually 25% higher than market rents today. And then I look at that relative to our in place rents today, it's actually nearly 45%. And the one of the key issues is the cost to build are getting that much more expensive and labor is certainly a factor there.

[Carol Massar]

Interesting. Hey, one thing just to follow on going back to Datacenter, in your build out you talked about also the acquisition of 5.2 gigawatts of power. It's a lot. How much though is in terms of the build out for data centers? You've got to track it with having access to power and does that slow some of the build out? Just got about 30 seconds.

[Dan Letter]

You know, this 5.2 gigawatts that we're quoting is just a portion of the universe of opportunities we actually have given our size and scale with our 6,000 buildings as 14,000 acres of land. We already own this land in these buildings at logistics basis and so we brought in in house expertise. We have a very large energy business. We've got 1 gigawatt of power that will be generating off our rooftops by the end of 2025. So we've been building that energy capability that gives us just a better relationship with the power companies.

[Jamie McGira]

Yeah.

[Dan Letter]

And, and so we're in great shape there.

[Carol Massar]

That was Dan Letter, President and incoming CEO of prologis, along with Bloomberg's David Gore, who will join us a little bit later on as well. Still ahead on Bloomberg businessweek, is the head to toe denim lifestyle paying off in the age of tariffs? We hear from the CFO of the company that started it all, Levi Strauss.

[Harmeet Singh]

Consumer strength really strong. That's where we were able to raise the full year guidance and our product pipeline hasn't been stronger. Now if you go outside the US International business was up in the high single digit and so Asia had a strong quarter consumer, strong Europe had a decent quarter consumer in a better place and so is Latin America.

[Carol Massar]

You're listening to Bloomberg businessweek. This is Bloomberg.

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[Carol Massar]

Well, earlier this month Levi Strauss raised its full year outlook, warned that tariffs are starting to bite as well. The company's gross margin improved due to higher prices and a larger volume of sales through more profitable channels. So is the head to toe denim lifestyle paying off? Levi Strauss Chief Financial and Chief Growth Officer Harmeet Singh expects accelerated growth, expanding margins and consumer resilience to overcome tariff uncertainty. He joined me alongside Bloomberg Senior Equities Reporter Bailey Lipschultz.

[Harmeet Singh]

We had a real strong quarter, four consecutive quarters of high single digit growth and record gross margins as well as the fact that we were able to raise our full year guidance as well as gross margin and EPS expectations. Overall as a company we're a stronger and higher performing company defined by accelerated growth, expanding margins and higher return on invested capital. To your question about the consumer, the consumer is largely being resilient. You know our products are really well segmented. You know we have Blue Tab which is our premium high pinnacle product and that's doing well. We've introduced that in the us so far so good. We have a Red Tab product that is basically marketed to consumers who earn between 100,000 and over. And that's, you know, based on our results, really done well. And then we have, you know, a signature product sold through Wal Mart that again had a banner quota and that's for, you know, lower income consumers. So consumer strength really strong. That's where we were able to raise the full year guidance and our product pipeline hasn't been stronger. Now if you go outside the U.S. an international business was up in the high single digit. And so Asia had a strong quarter consumer, strong. Europe had a decent quarter consumer in a better place and so is Latin America.

[Carol Massar]

Well, I'm just going to lay it out for you. I think I bought my first pair of Levi's in a long time just a couple of months ago. And my daughter, who's 22, so much younger than me, has been buying Levi's for a while. So Billy, I mean, they're back. I go into the store in downtown in, in the village and yeah, it's packed.

[Tim Stenovec]

Well, you get a partnership with Beyonce. All the marketing you guys are spending in terms of targeting both young and old, older generations. But Harmeet, I want to ask about tariffs. So Levi expects tariffs from China about 30% but increased expectations to 20% from the rest of the world. Where are you sourcing your jeans materials? Is it more, are you more exposed to that doubling in terms of, are you getting materials from Vietnam in place of China?

[Harmeet Singh]

Yeah. So overall we're taking a holistic approach as we are able to offset the tariff impact. You know, as you think about this year, we raised guidance in the top line and the bottom line and gross margin. So, you know, we've been able to withstand that. To your specific question, Bailey, we source about 1%. We import into the US from China, a little over a percent from India, most of and Vietnam is in the mid to high single digits. So most of our imports are from the Southeast Asian countries. Think Bangladesh, think Pakistan and the rest of Asia. The way we think about our supply chain is fairly well diversified. We import from about 20 countries into the U.S. 60% of our businesses outside the U.S. and so we are well positioned to mitigate and offset tariffs in the way we are thinking about the holistic approach given that volume is driving a big piece of our, you know, revenue momentum and we have tenured vendor relationships, we're working with our vendors, we're looking at different cost efficiencies across our organization as well as, you know, being very thoughtful about pricing.

[Carol Massar]

So let me just ask you though, you guys, did you know, you mentioned you raised your full year outlook. You did warn that tariffs are starting to bite. Profit, profitability to measure by gross margins improve. So these are the good stuff. But again, that tariffs are starting to bite me. Can you tell us what that means? What the bite of tariffs when, when, how much, you know, any color around that.

[Harmeet Singh]

Sure. So, you know, overall, you know, we were able to raise top line and bottom line guidance despite absorbing tariffs and so we are able to mitigate it. To the question about tariffs, you know, tariffs were introduced on Liberation Day. We normally buy our products, you know, six months in advance. And so, you know, we are working through, you know, our efforts and we've got different levers to kind of position it. So you take quarter three, the, the quarter quarter we just reported, gross margins are record. So we're able to offset tariffs because we've got other things working for us, you know, as we grow our women's business, our direct to consumer business and international, all of which are accretive to gross margins and allow us to, you know, mitigate and offset some of the tariff exposure. Quarter four, we did guide gross margins to be slightly down versus a year ago and had it not been for tariffs, you know, we would have grown gross margins. But overall, as we think about the year, we will report again another year of record gross margin. So we are working on levers for 2026. The good news is we'll end the year stronger and we believe we're well positioned to have another strong year in 2026.

[Tim Stenovec]

And Carol, we've talked with a good friend, Peter Atwater for quite some time about that K shaped recovery where people who are well off are doing much better than those really in the bottom quintile harmeet when you look at your goods, when you look at the ability to raise prices from the impact of tariffs, which products are you able to more easily raise prices where you aren't going to see consumers push away. And how are you thinking about that strategy as it relates to say the jeans that you do sell through a Walmart where you don't have that gross margin going direct to consumer and you do have likely, at least when we look at the data, a consumer who's feeling the pinch of inflation, broadly speaking.

[Harmeet Singh]

Yeah. And so the first thing Bailey to your question is our products are well segmented depending on the income profile of different consumers. I talk blue tab, red tab and signature. Signature is what's sold into the lower income consumer. We've been very thoughtful about pricing. We're leading with product innovation rather than price and so we're doing what we can to maintain a price point. It was evident in quarter three. Signature, for example, I think is up in the low double digits for the year. As we think about, you know, our other products, the good news for us is our product pipeline has never been stronger. You know, leading with lose and Baggy while at the same time selling a lot of slim and skinny, both for him and her. You know, we've got wonderful, you know, waist up product. Think trucker jackets, think linen shirts, et cetera, et cetera. And so as a company, we're making this pivot to be more of a denim lifestyle retailer going forward. Our past was all about denim. Our future is going to be about denim lifestyle.

[Carol Massar]

I just want to know, do you really have a pair of Baggy Barrel jeans? I can't get my head around them. I'm trying, I'm trying. I'm just, I haven't done it. I haven't done it. Harmy, what I do want to ask you too is you guys have had kind of a mission, a goal to get to 10 billion in sales by 2027. I think you may have adjusted a little bit. I think also a 15% EBIT margin. Could you reach 15% in the next few years even if sales have not hit that 10 billion?

[Lucy Guo]

You know, talk to us a little.

[Carol Massar]

Bit about that mission.

[Harmeet Singh]

Yeah, no, you know, we gave out the expectation of 10 billion and 15% on our investor day in the middle of June 2022. Since then, you know, there's been a lot of change and a lot of uncertainty as a company. We have kind of, you know, navigated our way through uncertainty. We haven't given our new date on the 10 billion and the 20 and the, and the 15%. Our thinking is probably do that sometime next year. But to your question, the company that we are building and the company that has got the foundation given where we're ending this year. So you take 2025, we'll end at about 6% organic growth. Last year it was 3%. The year before that it was flat. You were thinking EBIT margins. This year we land about mid elevens. Last year it was in the mid tens. The previous year it was about nine. So we have seen a steady progress and our view is we probably get to the 15% faster than we get to the 10 billion. But, but really a company that is steadily delivering mid single digit growth in a category that probably grows a little, you know, south of that. So our view is that we will be a market leaders now. In the US number one in men's, number one in women's and really resonating with the youth. And so the question is if you're able to stay at, you know, and implement our strategies, our view is we can continue to be market leader and probably pick up a little bit of share, especially because the denim category is accelerating. We have seen the acceleration in the U.S. we've seen the acceleration outside and that's largely driven by the world becoming more casual.

[Carol Massar]

Yeah, I have more jeans in my wardrobe than I've ever had in like since high school. Like it's really kind of wild. Anyway, Billy, I know you've got another.

[Tim Stenovec]

Question I was just going to ask. In terms of geographic expansion, when you think about China, what's going on with China and also what products do the Chinese consumers want? Is it that high end good or is it more of a bargain purchase?

[Harmeet Singh]

So China for us is still underpenetrated. China represents about 2 or 3% of our business. You know, our business in China has been slow and soft. The Chinese consumer right now is going through a bit of a macro uncertain climate. But the good news for us is they love the brand. Brand equity scores are really solid. We think China can be, you know, a business that grows double digit over the long term. But to your specific question, the Chinese consumer is fairly discerning on the brands he or she gravitate to. There is a high end consumer as well as a consumer that like the mid market consumer, what we call the core products. So if you think about our Asia strategy, we really, you know, our products are relevant for the mid market consumer while we also offer products for the higher premium end consumer. 30% of the Asian denim category is premium. And you know, premium. For example, our highest pinnacle product is largely Japanese, you know, fabric, Japanese denim and inspired by vision. So that's what we are selling and I think over time we'll be able to start growing our China business back into in the low double digit range.

[Tim Stenovec]

Interesting. Seth, I will say, Carol, I know you mentioned you have more jeans than ever. I have been buying the Sherpa jackets, the denim jackets like crazy. I don't know why. I have three of them in different colors.

[Carol Massar]

I bought a bunch of denim jackets.

[Tim Stenovec]

That's what I mean. I'd like, I don't wear jeans, I wear chinos. But I wear the denim jackets like crazy.

[Carol Massar]

I know. I just, I don't know.

[Lucy Guo]

I love it.

[Carol Massar]

I love it. I say everybody, I work every morning.

[Harmeet Singh]

Yeah. And Bailey and Carol, now we've got the blue tab, it's, it's a, it's fuller jacket. You can definitely wear it to office depending on the, on the, on the, you know, dress environment at Bloomberg. I walked in here fairly casual so, you know, something that we are not beginning to offer which should make your wardrobe at some stage.

[Carol Massar]

Our thanks to Harmeet Singh, chief financial and growth officer at Levi Strauss, Bloomberg senior equities reporter Bailey Lipschultz joining me there as well. Coming up on Bloomberg businessweek, more from the C suite and another clue on the US Economy. Amid a lack of government data, the CEO of industrial supplier Fastenal weighs in. That's coming up. This is Bloomberg.

[Tim Stenovec (advertisement and host segments)]

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[Carol Massar]

Well, earlier we talked about logistical real estate, you know, warehouses and such. And now we're talking about another essential part of the US Economy, industrial suppliers, which are often a bellwether for how companies are dealing with shocks the to supply chain or tariffs. Earlier this week, Fastenal reported third quarter earnings per share and operating income that were slightly below expectations. Analysts note that pricing during the quarter was weaker than expected and marks the second straight quarter of soft pricing. Bloomberg's David Gore and I spoke with Daniel Flornis. He's CEO of Fastenal. We talked about how his company is handling tariffs and pricing concerns for the company's customers.

[Tim Stenovec]

We had a really good quarter. We had a double digit quarter. We hadn't seen that for a couple years. Double digit growth. Sorry and pleased with the outcome. One of the challenges we had this year was there's a lot of fluidity around tariffs and what it means for pricing and we will raise price to address costs in our customer supply chain. We really don't want to raise more than that because we believe it impairs our ability to grow as fast as we'd like. And you know, coming into the quarter we estimated, you know, X for, for impact of pricing came in a little bit less. We lowered our number for the fourth, fourth quarter. But the most important aspect is on a price cost basis we are neutral and that's what we aspire to be. We'd rather just grow. Just one more question on pricing in terms of expectations, would you want to raise pricing? Like do you get the sense that consumers and customers would push back just given how you've been shifting into bigger customer Spend much more money. Yeah, customers always push back on pricing. Doesn't matter the size. Customer we will, we are having conversations with our customer. We will be doing some price increases in Q4. I suspect we'll be doing some price increases as we move into 2026. But again, our first discussion with the customer, they understand it, they're willing to move on price. Our first discussion is always what are alternatives to this product? That maybe doesn't mean we have to raise your prices 5%. Maybe it means it only has to be 2, and we'd rather go to 2 because that's what, that's what a supply chain partner does. Well then how do tariffs fit into this? Just given that according to analysts across the street, when we look at certain industries now is when we're going to see tariffs showing up in the third quarter in guidance as it go as it relates to 2026. What are you seeing and how are you kind of attacking or addressing any pressures from tariffs? Yeah, so for us, tariffs have been in the, in the equation since the, you know, early part of the second quarter, a little bit of first quarter. I think in the individual that handles pricing historically, he will provide us an update once a month. He had gotten the point where he was not only providing us updates, he, he was up to video number 14 as of July that he was serving out to the field, giving them guidance into what we were seeing in our supply chain. And, and so we've been adding price as we've gone through the year and these have been discussions with customers and I hope that answers your question. No, I think it does. But I think the big thing is are you mitigating the impact of tariffs? Are you shifting your supply chain? Is the expectation that you can have some kind of knock on effect as it relates to pricing if we do continue to see threats from the president going after countries like China or others? So how is that impacting when you look at your supply chain and when you look at the potential for pricing impacts in 2026? We've been moving supply chain around the planet in earnest since 2017, 2018. Time frame, as our name would imply, we sell a lot of Fasters and most of the Fasters in North America come from either mainland China or Taiwan. And the automotive industry took the production there back in the 50s and 60s, actually took it to Japan and South Korea and it migrated from there. If I look at our resources, we now have a sourcing team in Shanghai, but we have a sourcing team in Bangkok. We have a sourcing team in northern India. And we have worked to diversify our supplier base around the planet and a little bit more in North America, but really around the planet. So to have diversity in supply so you're not caught off guard by some price change or a tariff change. In addition to that, we've taken supply chains coming into North America, which traditionally came in through the west coast of the United States, and then we would redistribute from there. We have moved supply chains so they're bringing product directly into the west coast of Canada or the west coast of Mexico because those two countries represent about 14% of our revenue. Now. You bypass the tariff, however, it's more expensive to break shipments down over in Asia and bring them in, but it's a lot less than a tariff.

[Carol Massar]

One of the things I want to ask you, you know, you talk about supply chains is the end game. Is it about though largely reducing your exposure to China, which has been a pretty big one.

[Tim Stenovec]

It's reducing our customers exposure to any market, in this case China and or Taiwan, but to any market that are on the receiving end of some of the political winds and create an unstable supply base for our customer here. It happens to be China. Another month it might be a different country. Another year, it might be a different country. It's diversifying your supply chain so your eggs are not all in one basket.

[Carol Massar]

Got to be ready. So whichever. Yeah, whichever way the winds blow. Hey, one of the things I want to ask you just big broadly, the earnings update today, you talked about the industrial environment still sluggish. We've heard similar commentary on this persistent sluggishness elsewhere from manufacturers, as well as caution around project delays. At what point does this become something more worrying than just sluggishness for us?

[Tim Stenovec]

It's been sluggish since November of 2022.

[Carol Massar]

Okay.

[Tim Stenovec]

When the we really key on what the Industrial Institute for Supply Management puts out the PMI index. And that's been sub 50, which really plays into our customer base. Other than January and February of this year, that's been sub 50 since November of 2022. So we've been in a sluggish economy for a long time from our perspective. And other than living through the first part of it where you had customers that were downshifting, what reason our growth is shining through in different way? A, I think we're executing at a higher level, but B, once you get through that downshifting now you're just. Even if your customers are at a subdued level, you can grow in that kind of environment. And that's what's shining through in our numbers right now.

[Carol Massar]

All right, one thing I want to ask you because as you would imagine, I don't know how much of this is pervasive in your world, but AI is like the nonstop conversation that we are having. Certainly when it comes to activity and market impact. To what extent is I may be sucking up the oxygen in the economy, Are you seeing any signs of that or your world they're going to still need what you guys supply no matter what's going on with the spend and enthusiasm?

[Tim Stenovec]

Well, first off, we have a lot of, we have a meaningful improvement in our revenue as it relates to things like data centers because we sell into a wide range of, of customer needs and end market needs, whether that is the actual construction. I visited many data centers being built where we have people on site there after it's built. We're supplying into that facility with things like air handling and maintenance equipment in the case of customers that sell into that sector. That's actually a strong business for us right now. And then as an organization, we're increasingly making use of AI in our own business and how we go to market and how we help our employees be more efficient in what they do. And Dan, about 45 seconds here with in with keeping in mind data center construction. Where are those products sourced from? Are those also heavily sourced from China and exposed to tariffs or are they different supply chain altogether there? You know they're, it's mostly a different supply chain source but it depends on the component. If it's facility maintenance types, products, they're coming from anywhere on the globe and so they're, they're subject to the same type of issues any product would have. But a lot of the components, I know a lot of the manufacturers that we sell into, I visited one about a year ago in Michigan where they were purposely avoiding China and they're selling directly into the data centers.

[Carol Massar]

You've been at Fastenal for a long time. You've seen different cycles. How do you describe this one? And again, just got about 20 seconds. If you could be very quickly, very quick.

[Tim Stenovec]

Ooh, odd in the fact that similar what we saw in 18, but odd with the fact of it's just so damn fluid and there's so many things that occur from week to week, month to month that are outside the norm, but the fundamentals still work.

[Carol Massar]

That was Daniel Flornis, CEO of Fastenal joining us from Minnesota along with Bloomberg News correspondent and host of the Bloomberg Big Take, David Gora. By the way, this past week, bank of America removed fastenal from its US1 list, which represents the bank's best investment. B of A also lowered its price target on the stock to $48 from $49 a share, but kept its buy rating on the stock. Meantime, Barclays also lowered its price target to 45 from $49 a share. That wraps up our first hour of the weekend edition of Bloomberg Businessweek from Bloomberg Radio. Ahead in the next 60 minutes, a government shutdown, chronic crime and more, how the mayor of Baltimore is managing.

[Brandon Scott]

We go and we identify those who are most likely to be the victim or perpetrator of gun violence and we focus on them. We give them opportunities to change their life and if not, we remove them via law enforcement. And that's how we're driving down violence. We're focusing on guns and the flow of guns into our city, going after gun traffickers, those who are using guns, having arrested them at my direction, with the police department, turning them over to our state's attorney and our attorney general.

[Carol Massar]

Also, sideways inheritances and the transfer of money, wealth and influence from men to women.

[Jamie McGira]

Women, as you say, they do things differently, right? And they want to do things differently. And oftentimes when they're getting a hold of this wealth, right, when wealth is passing to them, either their parents and family or through their spouses, they want to do it differently. They want to be served differently. 70% of women leave their husband's financial advisor after a divorce or a death within one year.

[Carol Massar]

Plus, the culinary producer behind all the food action in the Emmy Award winning Hit the Bear and the youngest female self made billionaire in the world.

[Lucy Guo]

That's all ahead.

[Carol Massar]

This is Bloomberg businessweek. I'm Carol Massar.

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[Carol Massar]

We're back here on Bloomberg Businessweek. Tim is off this week, but we've got plenty ahead in this second hour of our weekend edition of Bloomberg Businessweek, including the Mayor of Baltimore on how he is fighting gun violence in his city. Then the great transfer of wealth, sideways inheritances, the feminization of wealth. Whatever you might call it, women are increasingly in charge when it comes to money, power and influence. Also we've got two of Bloomberg Business Week's screen time ones to watch. The chef and the culinary producer behind the Emmy award winning Hit the Bear and then the youngest female self made billionaire in the world and what she's doing with passes. We begin though with a view from the ground up. And that's why we always always love talking to mayors around the country. They are the ones on the ground in cities and towns across the United States making the decisions that affect the lives of people in their communities and hearing from people in their communities. Now, cities are especially in the spotlight as President Trump slams of the United States major cities and threatens to send in the National Guard, a policy that has faced resistance from Democratic governors, mayors and some federal judges. Tim and I spoke with Baltimore Mayor Brandon Scott about how he is tackling crime in his city without the National Guard and how his residents are doing amid the government shutdown.

[Brandon Scott]

Well, there's a lot of my constituents unease right when you're thinking about over 12,000 Baltimoreans work for the federal government, either directly or on contract. And then when you think about what that's going to mean for them and their families, they're just not at ease right now. And folks want to go to work. They want their government to be working. And of course, then all our residents who depend on programming and things that are just going to be out there that may not be having a direct impact as of yet by the shutdown, but as it continues and goes on, it would be.

[Carol Massar]

What do you consider, what do you consider your biggest problem in running the city? I mean, Baltimore, you know, we've reported about it a lot. It is the fourth most dangerous according to U.S. news & World Report this summer, ranking Baltimore the fourth most dangerous city in the country behind Memphis, Oakland and St. Louis based on FBI data. They look at property crime, they look at murders per capita. But what do you as mayor, I'm sure there's a lot that's on your plate. What's top of mind?

[Brandon Scott]

Well, listen, violence has always topped my it's the reason why I got into office. And we understand that we have a long way to go. But I know you guys know here Bloomberg radio, the many years that we were number one on that list. And as you and I are talking today, I think it's the moat and the conversation around Baltimore and violence has shifted significantly. We have the fewest amount of homicides through any October 7th on record today. That is a big change. When I said 2021, laying out our conference violence prevention plan that we were going to reduce homicide by 15% from one year to the next, people literally laughed. Right now it's down 30% from last year. And last year was a record reduction for us. We're going to continue that.

[Carol Massar]

How did you do it?

[Brandon Scott]

We did it throughout our comprehensive plan.

[Carol Massar]

Which is what?

[Brandon Scott]

Which is a bunch of things. One, first and foremost, we go and we identify those who are most likely to be the victim or perpetrator of gun violence. And we focus on them. We give them opportunities to change their life, and if not, we remove them via law enforcement. And that's how we're driving down violence. We're focusing on guns and the flow of guns into our city. Going after gun traffickers, those who are using guns, having arrested them at my direction, with the police department, turning them over to our state's attorney and our attorney general. We have historic levels of investment into community violence intervention, where we have people who used to be on the other side of the law going out and preventing conflicts from escalating into violence. All of it. We're going after gun violence manufacturers, people.

[Carol Massar]

Who understand where the problem is. And you're pulling them in to help you pull them in.

[Brandon Scott]

They were the problem, and now they're part of the solution. And what better way to do that?

[Carol Massar]

How do you get those people to do that?

[Brandon Scott]

Well, easy, first and foremost, many people who have made that mistake don't want people coming behind them to make that. And they know that we're growing this network of community violence intervention workers in our city. So the word is out that we want to give people a second chance to be a part of solving a problem that they once were causing.

[Tim Stenovec (advertisement and host segments)]

The city, though in the crosshairs of the president, he called it a hellhole. Last month, UN Governor Wes Moore said that law enforcement from the state will patrol some areas. Has that begun?

[Brandon Scott]

Yeah, that's begun. And that's. The governor is actually restarting something that was ended by his predecessor. Think about it like this. You would not find any other state police department in any state in this country not operating at all. In his only major city, that's Baltimore City, was the only jurisdiction in Maryland that Maryland State Police did not operate in. The governor's restarting that. We're grateful for that support and to continue that work.

[Tim Stenovec (advertisement and host segments)]

Are you open to the president sending National Guard troops to the city?

[Brandon Scott]

No, we've been very clear about that.

[Tim Stenovec (advertisement and host segments)]

Why not?

[Brandon Scott]

We have. We know how to reduce violence in Baltimore. We have reduced violence to its lowest levels ever recorded on record, even lower than the president's first term. The way that we have done it, in partnership with our community, with our police department, with our state's attorney, our attorney general, and our federal law enforcement partners who work beside us each and every day, that's how we should continue that work. If the president wants to help us, he should restore grants and funding that was cut to organizations that help in that restore grants. I mean, funding cut from the law Enforcement agencies. This president has had the biggest reduction in funding for federal law enforcement agencies they should be restoring.

[Carol Massar]

What funding are you not getting as a result?

[Brandon Scott]

For us we have not been directly impacted as of yet. It's our partner organizations like for example lifebridge Helps that runs the center for Hope. There's a part of our CVI network that has programming around CVI's community violence intervention. They lost a $500,000 grant. The same thing for living classrooms. That's big work that is going to be not happening. Whether it be a hospital based response, our community based responders we a victim assistance for young people getting those young people the services they need that helps to prevent violence as well.

[Tim Stenovec (advertisement and host segments)]

What will you do though if the President sends troops to the city?

[Brandon Scott]

Well listening we'll be prepared to take whatever action that we can be illegal others alongside our governor and our team based on when, what and how the President does something, if he does anything. But what we hope the president does is to continue to support those agents that are already working in our city doing and, and let them do their work and let the law enforcement partnership that has driven results this far carry us all the way.

[Tim Stenovec (advertisement and host segments)]

But even though crime has improved, even though you shared statistics that show they're the best that they've, they've ever been. Like Carol mentioned this, this, your city is still on a list that you don't, that you don't want to be on. So I get to say to people out there who are saying well I would feel more comfortable if there were an increased law enforcement presence and, and that could include federal troops.

[Brandon Scott]

Well, we had the National Guard in Baltimore in 2015 following the unrest of Freddie Gray. It's one of the most violent years ever. It didn't help. Right. We have to remember this is not what those folks signed up to do. Allow those folks who sign up to go after a gun, traffickers, murderers, robbers, carjackings to do their work and allow the other people to do their work and listen, there are other lists. You know there are many of these lists. We were on some lists on some lists we weren't on. Al the list that we want to be on is the list of who has the largest reductions. And you will be hard pressed to find a city in this country that's had a sustainable long term reduction like Baltimore's had From September of 2022, I mean 2023 until now.

[Carol Massar]

What do you see as what's wrong with politics today? What do you think is wrong with what some say is the Democratic Party not very clear in its mission and kind of stepping up.

[Brandon Scott]

Well, very simply, I think that.

[Carol Massar]

And I ask you because I think there's a lot. Forgive me, but there's a lot of folks who think there are politicians who've become career politicians and things haven't changed, and we need some change.

[Brandon Scott]

Well, I think that what folks have to understand is that for me, and I say this about the Democratic Party all the time, more recently, they have to let the folks that are closest to the problem be out front and part of the solution. Meaning they need to listen to mayors. The mayors are the ones that have to solve the problems. The mayors are the ones that have to meet the people in the grocery store. And we've proven in city after city after city, we know how to drive down crime. And you have to talk to people where they are. We have to get out of being up in the sky with pie in the sky. Talk to people in real sense, real things that impact them and explain to them how these things are going to make their communities better.

[Carol Massar]

How long do you want to be mayor?

[Brandon Scott]

I want to be mayor for as long as the residents of Baltimore will have me. This will be my second term, believe it or not. I've been in elected office since 2011, and this is. I've been in City hall since 2007.

[Tim Stenovec (advertisement and host segments)]

But you are a young man right now.

[Brandon Scott]

Yes, a youngish man. I'm 41. I'll be 40, 42 on my birthday. But this is about making my city better. I got into this service because I saw someone get shot at.7 years old and no one cared. And wanting to drive down that violence, to have vacant housing be at its lowest point in my lifetime in Baltimore. Something we're proud of, but we're not celebrating. We have a lot of work to do, and we're going to do it.

[Carol Massar]

The reason I go back there is I do think we talk about this in media, that there isn't a lot of, you know, local publications anymore. A lot of newspapers have shut down. And so we get kind of the high and the.

[Brandon Scott]

Yeah, we don't need that.

[Carol Massar]

That view, but we don't. It's why we love talking to mayors. But often people are mayors, and then they move up and they go to governor and then they go to Congress and stuff. So I'm just curious, how long do you want to stay on that local level?

[Brandon Scott]

Well, everyone knows the end game. Everyone knows I don't want to be governor, and everyone in Baltimore knows that I'll be quite okay if being the mayor of Baltimore is the last elected office I ever had. This is my dream job as a child. I will hold it as long as the residents of Baltimore will allow me to do so. As long as I'm living within term limits.

[Tim Stenovec (advertisement and host segments)]

Before we let you go because you have a train to catch to get home.

[Tim Stenovec]

Yes.

[Tim Stenovec (advertisement and host segments)]

And we want to be respectful of your time. The attracting and retaining business to the city, we know that's a economic development is a way to improve cities. What are you doing right now to say Baltimore is open for business?

[Brandon Scott]

Yeah. I think that you have to understand we had a $4 billion of investment into Baltimore. We have $7 billion investment coming to downtown Baltimore. Whether it's T. Rowe Price's new headquarters or Under Armour's new headquarters. Everyone knows throughout downtown Rise plan. We are open for business in the city of Baltimore. Reforming our permit process and reforming our zoning code. All, all the things that we need to do to help grow business in Baltimore, especially in the tech and life sciences industry that has taken off out of Hopkins and out of the University of Maryland, putting a lot of money and a lot of tech businesses out into the efil.

[Carol Massar]

Any signs that we're headed towards a recession?

[Brandon Scott]

Well, we'll see. We know that with terrorists and all the other things going, we just have to all be mindful of what's happening and prepare as we're doing our budgets. I've been talking to my brother and sister, the mayors, to make sure that we're being responsible right now because we do not know yet what is to come.

[Carol Massar]

That was Baltimore Mayor Brandon Scott. You're listening to Bloomberg Businessweek. Coming up, how women are joining the billionaire ranks.

[Jamie McGira]

The majority of them were actually moderate to aggressive because they saw the power of not just gaining wealth through working or through transition, but actually gaining wealth through the capital markets. Right. Investing in items that will and securities and portfolios that will actually help them grow their portfolio. Private markets is a great example again for a financial advisor to play that role and help a and coach and guide a woman and how she thinks about her portfolio across public and private. You know, women oftentimes want to.

[Carol Massar]

This is Bloomberg.

[Tim Stenovec (advertisement and host segments)]

This is the Bloomberg Business Week daily podcast. Listen live each weekday starting at 2pm.

[Tim Stenovec]

Eastern on Apple CarPlay and Android Auto.

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[Tim Stenovec]

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[Tim Stenovec]

Play Bloomberg.

[Carol Massar]

1130 Wall street is experiencing a new type of wealth transfer. More than a dozen women in the world's 500 richest people have become Billionaires after the death of a spouse. That's the highest number ever. These so called sideways inheritances are increasingly shaping global business as women take over huge empires from finance to consumer goods and gambling. Today, those women oversee record fortunes totaling $365 billion, roughly tripling since 2016, according to the Bloomberg Billionaires Index. The changes are creating huge implications for how vast sums are invested. Bloomberg's Matt Miller and I spoke with Jamie McGira. She's head of U.S. wealth advisory and head of retirement at BlackRock. It's the world's largest fund manager which notched a record $13.5 trillion in assets. BlackRock reporting earnings this past week. So we get an update on that number. We talked with Jamie though about the ways women are reshaping the investment industry. You know, we are talking about the environment generally. So let's start there. I know we did that over the summer when we talked because BlackRock just sees so much in terms of the funds it oversees and the flows. And the flows continue to grow. But that doesn't mean the flows are always going in the same places. What can you give us insight in terms of where money is going and where money is going out of.

[Jamie McGira]

Yeah, so first of all, excellent to be here. And you started by talking about flows. I'm going to take a gender perspective on flows.

[Carol Massar]

Yeah.

[Jamie McGira]

And talk to you a little bit about where we see money going globally with women. And so women more and more are earning wealth, they're acquiring wealth, they're owning wealth, they're playing a larger role in capital markets. They are investing and benefiting from these capital markets. And we think there's no better sign of hope in the future than having people invest and grow along the capital market.

[Carol Massar]

Is it because they're earning in it themselves and they're having some say, or is it also in terms of couples because they are often breadwinners as well, that they also have a say at the table?

[Jamie McGira]

Yeah. So it's both. Right. So when you think about women, women are more often now becoming breadwinners, primary breadwinners, quite often they're also contributing to household along with their spouses. They're earning more money, but they're also acquiring. And you mentioned the wealth transfer. You know, we think about that in two ways. There's the intergenerational wealth transfer where they're gaining assets maybe from their parents as they pass away. But the more interesting one is this horizontal transfer. Right. So if a spouse passes away or if there's a divorce, women are acquiring assets in that way. And they need financial advisors to help. They're reshaping the industry. And women have just not been served in the way they need to be served in the past.

[Carol Massar]

You think about that, right, with Melinda Gates. You think about it with Jeff Bezos.

[Tim Stenovec]

No one died in the Gates.

[Carol Massar]

No, but I'm just saying there was big divorces.

[Brandon Scott]

Oh, I got you. Yeah.

[Carol Massar]

Had significant players, certainly in wealth overall, but also in philanthropy.

[Jamie McGira]

Yes, yes.

[Tim Stenovec]

Actually, Cerule estimates that globally, $124 trillion will change hands in this silver tsunami. And then the. And then their current forecasts are that 54 trillion will be passed to spouses first before it goes down another generation.

[Brandon Scott]

So.

[Tim Stenovec]

So 40% of those spousal transfers will be to women. So this is what Sally Krawcheck calls the feminization of wealth. And the idea is that when are the important idea, I think here for you, for your industry, is that when women get hold of this money, they often don't stick with their same wealth managers. They often say, you know what, I'm going to go with someone else now. So what do you do if you want to get hold of a piece of that pie?

[Jamie McGira]

Yeah. So maybe I might even just dimensionalize what you, you mentioned, because I think about it in percentages. So today, let's call it women responsible and controlling 30% of the world's wealth. That will be 50% by 2030. That will be 70% by 2070. So these are big numbers.

[Carol Massar]

Amazing.

[Jamie McGira]

Big numbers.

[Lucy Guo]

Yeah.

[Jamie McGira]

And women, as you say, they do things differently. Right. And they want to do things differently. And oftentimes when they're getting a hold of this wealth, right. When wealth is passing to them, either through their parents and family or through their spouses, they want to do it differently. They want to be served differently. 70% of women leave their husband's financial advisor after a divorce or a death within one year.

[Carol Massar]

Wow.

[Jamie McGira]

70%.

[Carol Massar]

Why is that?

[Jamie McGira]

Because they oftentimes felt, not heard, not part of the conversation, not at the table and making decisions. You know, there's a lot of misconceptions around women. Right. People think women aren't engaged with finances. Just not true. A third of US households have women as the primary financial decision maker. People think women, or call women perhaps a bit risk averse.

[Carol Massar]

Well, that's what I wanted to ask you. Are women risk averse? Like, give me an idea when they. Were you talking about investments? I mean, we've been thinking about the AI trade or private assets. Are they risk averse? So we did A study to make generalization? No, but I'm curious if there are.

[Jamie McGira]

So, okay, so not a monolith. Right? Women are very different. All my friends are different than me. We all do different things and need different things. But generally speaking, speaking, we did a study with 2500 female investors. When we talked to them about their risk tolerance, the majority of them were actually moderate to aggressive because they saw the power of not just gaining wealth through working or through transition, but actually gaining wealth through the capital markets. Right. Investing in items that will. And securities and portfolios that will actually help them grow their portfolio. Private markets is a great example, again, for a financial advisor to play that role and help a. And coach and guide a woman and how she thinks about her portfolio across public and private. Last time we were together, we talked about direct indexing and the role of taxes or, you know, women oftentimes want to. You're laughing.

[Tim Stenovec]

Gets me excited. Direct index. Yeah.

[Carol Massar]

You know what?

[Tim Stenovec]

I anchored the ETF show for a long time, and that's a big part of that discussion as well. You know what? It's not just women. Obviously, kids are going to get hold of a lot of this money. And I think. I'm not sure about women, but I know with younger people, they want to do more impact investing than their parents did or their grandparents did. So is that also a key to try? Because I'm thinking from the perspective of a wealth manager who wants more business.

[Lucy Guo]

Right.

[Tim Stenovec]

So what I need to do is say, hey, I can. I can set up some direct indexing for you, and I can help you make an impact with the money you invest. It's not just to make more money. You're also going to change some part of the world that you want to. Is that the case?

[Carol Massar]

It is.

[Jamie McGira]

And I like to use the word purpose because actually impact has many different meanings. And so if I'm a financial advisor and I'm working with a younger client or a woman, I'm going to be talking to, by the way, men too.

[Carol Massar]

Right.

[Jamie McGira]

It's not just about the impact you're having. You could invest in a way that maybe aligns with your values. Maybe you have certain values that are important to you to hold in that portfolio.

[Tim Stenovec]

I love motorcycles, so I would want to buy holding.

[Carol Massar]

There we go.

[Tim Stenovec]

Ducati stuff.

[Carol Massar]

But, you know, I often wonder about that because, you know, if you care about the environment, but if an. If an investment doesn't pay, do people. Are people doing that because they believe in it, but it may not return as much as something else?

[Jamie McGira]

I'm going to give you an answer that will be terribly unfulfilling. It depends.

[Carol Massar]

Okay.

[Jamie McGira]

Right. So there are people. And by the way, let's step away from the portfolio for a moment and say, what about philanthropy? This is where I come back to purpose. Right. People are looking to put their money to good cause and that might be philanthropic, it might be impact in their portfolio. It might be aligning with the values I have. It might also be sending my children to school or helping my elderly parents.

[Carol Massar]

Right.

[Jamie McGira]

Or starting a new business. Right. How about that for purpose?

[Tim Stenovec]

Or shielding your money from taxes.

[Tim Stenovec (advertisement and host segments)]

Right.

[Tim Stenovec]

I mean, I guess I'd be willing to take somewhat of a loss by putting my money into a philanthropic vehicle, especially if it's compared to a much bigger loss by giving it away to Uncle Sam and state and local and federal taxes.

[Carol Massar]

Yeah.

[Jamie McGira]

And again, that's where you look at.

[Carol Massar]

Things in a vacuum. You have to look at them. Right.

[Jamie McGira]

Overall holistic wealth planning. And again, the role of a financial advisor is critical there.

[Carol Massar]

Got to ask you, just in general, when you look at this environment and we talk a lot about a bubble right now, I don't know what is, what is your take on it? What are you or what are the conversations you're having with clients about how they feel about. Are they a little nervous?

[Dan Letter]

Yeah.

[Carol Massar]

About that trade?

[Jamie McGira]

Yeah, we talk about, I mean, we talk to clients, advisors and clients, institutions globally all the time. Look, the markets are the markets and there are long term investors that need to just keep staying with the markets. We talk about, it's not time in the market or timing the markets, it's time in the markets. The other thing though is you just have to acknowledge that there's uncertainty out there. Right. There is volatility. There are things going on in the markets that again, everyday people, let's take it to America and Americans. Everyday people need professional advice. They need someone they can trust that will help them navigate that through professionally managed solutions or through advice. But there is uncertainty out there. But again, we come back to it's time in the market, not timing the market.

[Carol Massar]

20 seconds, Jamie. I mean, are more people feeling comfortable putting money to work? Are they after kind of a nice bounce from the April lows or they're like, I'm good, I'm done. I want to be a little bit more conservative.

[Jamie McGira]

Just quickly now we are seeing, we are seeing flows into portfolios in ways that are across.

[Carol Massar]

I said blackrock was up a trillion dollars since the summer.

[Jamie McGira]

We talk, we are having the best conversations we have ever been having with financial advisors, institutions and wealth managers across the world. People are very interested.

[Carol Massar]

That was Jamie McGarra, head of U.S. wealth Advisory and head of retirement over at BlackRock, Bloomberg's Matt Miller joining us as well there too. Still ahead on Bloomberg Businessweek, a recipe for success when it comes to storytelling, we've got the chef and culinary producer of the Emmy award winning FX hit the Bear.

[Lucy Guo]

There is so much camaraderie, chemistry, teamwork in kitchens that gets you coming back every day. I learn so much about who I am as an individual by the challenge of, you know, running restaurants, line cooking. Not only do I develop my skills as like an actual chef, but I think as a person I I've learned so much from every single person that I've been in a kitchen with.

[Carol Massar]

And exclusive access to influencers without the nudity. It's the latest venture from the youngest female self made billionaire in the world.

[Lucy Guo]

Anyone can make money. It's more so like the amount of people that are willing to put in the time to make the content right. It's just like how many people are willing to work hard to make that income. And when you just look like really every career on this planet, there's a limited amount of people willing to put into effort. And we see that the people that are willing to put into effort to like churn out content are the ones succeeding.

[Carol Massar]

More of our favorite conversations at this month's Screen Time event. They're coming up next when Bloomberg Businessweek continues.

[Tim Stenovec (advertisement and host segments)]

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[Carol Massar]

So we wanted to wrap up this hour by bringing back some of our favorite conversations from this month's Bloomberg Screen Time event held recently in Hollywood, California. And that brings us to a chef and a culinary producer of the Emmy Award winning hit FX show the Bear. She is on Bloomberg businessweek Screen Time Ones to Watch list. She is Courtney's storer and she sat down with Tim and me to talk about her world culinary producer deals with.

[Lucy Guo]

Kind of macro and micro issues of the show. So I work very closely with Christopher who is the creator of the Bear, also my brother and then you know, the the writing team and I kind of kind of help inform some of the character development based on my own personal experience. And then every day on the show I'm there. I do work hand in hand with my culinary team and we do all the food. We cook it. We don't have food stylists so everything you see on the show we run it like an actual restaurant. So we have a full team. But I'm also there to help Sort of work with, you know, the film department, set decoration, props, to make sure we are as accurate as possible. And it kind of. I wear a lot of different hats, so wherever they need me, I go. But I definitely use the script to inform the direction of the food. And then I'm responsible to work with the cast to kind of bring those things to life. And as you see on the show, these actors are actually cooking, so we don't use hand doubles like they're doing it.

[Carol Massar]

There are such a thing as hand doubles in cooking?

[Lucy Guo]

Of course. Yeah.

[Carol Massar]

All right, so, okay, first of all, it's like the food is. I mean, I don't want to say it because the actors on the show are incredible, but it's like the main actor. So how hard is it to do what you do? It's actually, it's.

[Lucy Guo]

It's challenging, but it's very fun because I'm coming from the real restaurant world. I'm a chef. You know, I've been a chef here in Los Angeles for many years. I've been in the restaurant world forever. And I think bringing these things to life takes a lot of, like, information of all the restaurants that I've been in. And then doing it on camera and then having it not only look great, but time and temperature sensitive wise, we shoot very, very fast. So it really is a team effort to be like, this is the end. Ish. And getting everybody in the loop of how and when to shoot it, when it looks perfect.

[Carol Massar]

You don't want things melting or mushing or like.

[Lucy Guo]

Right, yeah.

[Tim Stenovec (advertisement and host segments)]

So you have this background as a chef. You have a background. A chef. You have background in culinary training?

[Jamie McGira]

Yes.

[Tim Stenovec (advertisement and host segments)]

Matty Matheson, of course, is an actual chef. Jeremy Allen White did go to a couple weeks of culinary training.

[Carol Massar]

Yeah, IO did too.

[Lucy Guo]

Yes. IO went, Liza went. They all spent time with me directly here in Los Angeles in my kitchen, my catering kitchen, where we trained to work on some specifics for the show that would be done on camera. As you see, you know, Tina's character, she's filleting Bronzino in culinary school and she's left handed. So how we filmed that scene and how she had to practice that scene, it's like we have to actually apply these skills so that they read on camera. And it's been so helpful for their own journey to actually experience culinary school. Working with chefs, staging in restaurants and then actually doing it on camera really helps them get it right.

[Tim Stenovec (advertisement and host segments)]

Go ahead.

[Carol Massar]

What were they like in the beginning?

[Lucy Guo]

Like, was it. Was it like. I think everyone Well, I think there was crazy. I mean, I was very. She loves food. So, like, I feel like Jeremy, IO, Lionel, you know, Liza. They all have passion for food.

[Carol Massar]

Okay.

[Lucy Guo]

So that helps. And they were eager to get it right.

[Carol Massar]

I don't want you to disown.

[Lucy Guo]

Yes.

[Carol Massar]

I just know. But I'm just.

[Lucy Guo]

They. They've come a long way.

[Carol Massar]

It's a different skill.

[Lucy Guo]

Yes, they've come a long way, and I see the effort that they put in each season. And remember, now we're going into our fifth season, so we practice before we go to film each. Each year. So they're building their skills as we go.

[Tim Stenovec (advertisement and host segments)]

So my wife worked in kitchen, so we would watch the show together, and she'd be like, this is what it's actually like. The masking tape on labeling things. And, like, we actually drank out of those, like, to go containers.

[Lucy Guo]

We call them delis.

[Tim Stenovec (advertisement and host segments)]

Okay. That's what it's like. I worked at Taco Bell, so I have no idea what it's like. It's important, but it's not like this at all. But I gotta tell you, like, after watching a few episodes of the first season, and I'm like, who wants to do this? The pressure is crazy. You're getting paid a fraction. It's like. It's like the pressure of being a brain surgeon without any of the pay.

[Lucy Guo]

Yeah.

[Tim Stenovec (advertisement and host segments)]

And the hours are worse.

[Lucy Guo]

Yeah. I think that's a really good question. And I think what the show does kind of do a really good job at is show some of the difficulties and some of the wonderful things. Like, there is so much camaraderie, chemistry, teamwork in kitchens that gets you coming back every day. I learn so much about who I am as an individual by the challenge of, you know, running restaurants, line cooking. Not only do I develop my skills as, like, an actual chef, but I think as a person, I've learned so much from every single person that I've been in a kitchen with. And that's from the porters to the dishwashers to the front of house host to, you know, the head chef. There is always something to learn in kitchens, and it's fun. It's actually quite fun. It's stressful. Yes. But there is a reason that people come back every day.

[Carol Massar]

All right, so tell us something where something got burned or went wrong.

[Lucy Guo]

Does that happen a lot in. On the show?

[Carol Massar]

Yeah. Well, when you're, like, going through. Because timing is so important.

[Lucy Guo]

Of course. Of course. There's a lot of setting each other up for success, and I have to say like without my culinary team, we are very diligently working to make the best of everyone's time that is working alongside us. And there's a huge incredible camera department that we're, you know, being mindful of them holding these heavy cameras and you know, getting it right. So we practice a lot before we actually shoot. There is a lot of work on the pre production side before we have cameras rolling. It's really important that we come and like bring our A game because we don't want things to burn, of course, like we have to redo dishes if ice cream melts or something like that. But we make sure we're prepared to set up everybody for service.

[Carol Massar]

So it's like anything else in terms like you just.

[Lucy Guo]

Absolutely.

[Carol Massar]

Everybody's on their A game.

[Lucy Guo]

We treat it like service. We treat it like a dinner service.

[Carol Massar]

Do you want to change your job?

[Tim Stenovec (advertisement and host segments)]

Yeah. No, I don't think it's in my DNA. Yeah, yeah.

[Lucy Guo]

I can't do it. I think you'd be surprised though. I think some of my best cooks never cooked a day in their life.

[Carol Massar]

Really?

[Lucy Guo]

Yeah.

[Carol Massar]

That's Courtney Storer, chef and culinary producer of the Bear and on the Bloomberg Business Week Screen Time ones to watch list. Also included in that group is the youngest female self made billionaire in the world. She is the co founder of Scale AI which after a multi billion dollar investment from Meta platforms valued the company at more than $29 billion. That's not all that she's doing though right now. She is also the founder and CEO of Passes, which helps social media influencers diversify their income streams. Think exclusive photos, dms, video calls, live streams and more. She checked in with Tim and me, all from Bloomberg Screen Time.

[Lucy Guo]

Anyone can join a platform as long as they're not creating new content.

[Carol Massar]

So that's it. That's the dividing line.

[Lucy Guo]

That's the dividing line.

[Carol Massar]

So talk to us about your growth that you're seeing on the platform in terms of people, you know, wanting to be on it, staying on it. Talk to us about some of the velocity that you're seeing.

[Lucy Guo]

Yeah, definitely. Well, with creators that make over 5,000amonth, we have near 100% retention, which is really exciting. We see in forex growth from 2023 to, I mean 2024 to 2025 and hopefully we'll see more of that, which is exciting. And then we have crossed nine figures in earnings for creators, which is also very exciting. So those are just like high level numbers I can share with you guys today.

[Tim Stenovec (advertisement and host segments)]

Well, some of the reporting around OnlyFans, for example, has has shown that like there's a small number of people who make the vast majority of the money on the platform. Is it more evenly distributed on passes?

[Lucy Guo]

I would definitely say it's more evenly distributed but I would also say that like our top, like let's say 30% of creators make the majority of the GMV.

[Tim Stenovec (advertisement and host segments)]

That's so that's a challenge for people who are trying to get in.

[Lucy Guo]

I mean I would say that anyone can make money. It's more so like the amount of people that are willing to put in the time to make the content. Right. It's just like how many people are willing to work hard to make that income. And when you just look like really every career on this planet there's a limited amount of people willing to put into effort. And we see that the people that are willing to put in the effort to like churn out content are the ones succeeding.

[Carol Massar]

Lucy, how do you bring or attract people to the platform? What do you guys have to do?

[Lucy Guo]

So a lot of it is organic, so word of mouth. A lot of creators just talk about like how much they love the platform and how much they've made and people hear about it so they end up joining. Other than that, we do a lot of social media, we do a lot of events because we think that it's a relationships driven business where I think there's like platform retention but there's also emotional retention and that motion retention comes like people to people connections and the creator economy. Most retention is a very real thing. I would say it's potentially stronger than platform retention. So we work on a lot of face to face interactions with creators as well.

[Tim Stenovec (advertisement and host segments)]

You dropped out of Carnegie Mellon for a Thiel Fellowship. Obviously in hindsight it was the right move. You went on to co create scale AI. Incredible success there. I'm just curious though about your view of higher education. Having participated in it for a short time and then left. How do you think higher education has to change to prepare the next generation of leaders, to prepare the next generation of entrepreneurs.

[Lucy Guo]

Yeah. So I think that with higher education. Well, first my view on higher education is that I actually encourage everyone to college for one to two years. Not because I think you're going to be learning a lot in your classes, but because I think there's no period of time in your life that you're going to be thrown into where you're going to be in a high density of intellectual individuals that all have no friends. Like if you think about it, even when you graduate college and you go enter the job force. Most of the people at the company that you're about to work for already have friends. So it's harder to break into a social scene. Versus college is the only period in your life where literally everyone in a freshman class knows nobody.

[Carol Massar]

Right, Like a grand social experiment.

[Lucy Guo]

Exactly. Yeah. And it's a high density network of people that are just as intellectually intelligent as you. And I think college is really where you find your future co founders, your future hires, etc. Because when you're starting a company, for example, who is going to turn down a multi million dollar offer to join you? And the most talented people, like the most talented engineers are getting those straight out of college right now. Only people that like really believe in you because they have that emotional connection. So I really encourage everyone to go to college and meet as many talented people as they can the first one to two years. In terms of how I see college moving on towards the future, I think from my own personal experience, I do think that we could be learning a lot more practical skills that we can actually use in the job force. So for example, when I studying computer science at Carnegie Mellon, a lot of it was very theoretical math and I felt like I learned the most about product sense, about actually like making apps, et cetera through hackathons that I was attending every few weeks.

[Carol Massar]

It's almost like the concept of trade schools somewhere with higher education, there's something there. What's your 20 seconds on AI in terms of.

[Jamie McGira]

Yeah.

[Lucy Guo]

So the impact it's going to have on our world, for sure.

[Carol Massar]

Bad or indifferent?

[Lucy Guo]

I'm excited. Excited. I think that with every technological innovation, things have improved in the world for everybody. I think that we should view AI as our co pilot and not something that's going to replace us. It's going to help us be better at our jobs.

[Tim Stenovec (advertisement and host segments)]

You're not scared?

[Lucy Guo]

No.

[Tim Stenovec (advertisement and host segments)]

Should we be scared?

[Lucy Guo]

No.

[Tim Stenovec (advertisement and host segments)]

All right.

[Carol Massar]

Our thanks to Lucy Go, founder and CEO of Passes and co founder of Scale AI. And that wraps up the weekend edition of Bloomberg businessweek from Bloomberg Radio. Thank you so much for joining us. Be sure to tune in to Bloomberg Business Week daily Monday through Friday starting at 2pm Wall street time on Bloomberg T Bloomberg Radio and on Sirius XM channel 121. You can listen to us also on Apple CarPlay and Android Auto. It's free in the Apple App Store or on Google Play. You can also watch our daily broadcast on YouTube. Just search Bloomberg podcasts. We're simulcast on Bloomberg originals [e-mail] originals and streaming platforms including Roku, Amazon Fire TV, Samsung TV plus and more. Find our Bloomberg Businessweek Daily podcast, Apple or wherever you get your podcasts and always check out the latest edition of the magazine. It is available on [e-mail] and always on the Bloomberg Terminal. I'm Carol Massar. Tim will be back next week. Have a good and safe weekend everyone.

[Tim Stenovec (advertisement and host segments)]

This is the Bloomberg Business Week Daily Podcast, available on Apple, Spotify and anywhere else you get your podcasts. Listen live Weekday afternoon from 2 to 5pm Eastern on Bloomberg.com, the iHeartRadio app, TuneIn and the Bloomberg Business App.

[Tim Stenovec]

You can also watch us live Every.

[Tim Stenovec (advertisement and host segments)]

Weekday on YouTube and always on the Bloomberg Terminal.

[Carol Massar]

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