Seabiscuit and the chinese products. Who arewith the people familiar with this. I love the story. This is the resurgence of the chinese and a private equity in china. We will see much more and do they want the crown jewels . Center. Is a sensitive itll be interesting to see what emerges from this. It is not clear whether they will make a bid, according to people there. They are examining it and they have had talks with their partners. Read is difficult to across for the United States and we have other companies that make for a huge difference. Manus, you are watching out for burberry. They have beaten analyst estimates. Like what came out it said they were converted and football is lower. Once they engage did you engage with burberry, whether that is from the shop and the online, that is conversion. The word is, in marketing terms, that the converging ratio is higher. If you can do that digitally, you are absolutely a winner. Click and collect luxury styles. Ins go to carolina hide perilous. You are watching hollande. Francois hollandes room was packed with eager journalists. They were putting up questions on his personal life. He was there to sell a vision of where the economy was headed. Instead, it was question after question about the future of his first lady at about his alleged affair with the french actress. That was all he got. Questions on that. He was desperately trying to focus on the fiscal headlines. I will be back with much more on the story in a few moments. I was fascinated. Said, the first lady of france if held you imagine brings a completely new first lady to the u. S. . Fiery andegations are im going to try to be careful. Lets the claire best lets be claire lets be clear about this, there are allegations. Asked to be honest in public and that is the whole point. That is just my opinion. It is a scandal. Knows that this is more expensive. The beige book will set the tenor. And creditof finance a china is dropping. There is a record decline in new credit. There are other elements at play and not just valuation. We will keep an eye on those. Germany is disappointing in the final reading of gdp and there are a lot of accusations that germany needs to do more to rebalance what is going on with the rest of europe. Here. Ew came overall, there are nice characters in United States of america. Or curiosity, run all renault and burberry numbers are doing nicely. You are getting a lift up there and burberry reports not a bad christmas. Digital is doing better and those two grants are not necessarily highly correlated. They have recovered their overall sales in the sales dropped 53 in china and there was a recovery in that situation. 98. 5 and the stock is up 10 . You see their december total 288. 8. Ise to lets look at the african expansion plan. Burberry my print. Print. T see, ins do happen, francine. Things do happen. The ceo says he is open to talks. Here is james breton, the chief investment officer. Am fascinated by the biscuit story. The Chinese Company is looking at europe. Will we see more of this . I think we will. We have an environment and lows costs. Investors will be adjusting the evaluations. Those violations are interested in the industrial logic is not about making dad companies better. Companies better. Beyond this, you are getting a brand that people know and are squeezing out. What does the biscuit mean for a Chinese Equity Firm . They have a lot of cash to deploy. They have large amounts of cash to pay for the commitment and we did to find a home. Inevitably, private equity is saying, what companies can we reasonable a discernment of the capital the ploy. Which companies will pay adequate cash flow. You get a typical account of the company and the cash flows are stable. You want them to be reasonably sustained. You do not get an Aggressive Central Bank tightening. If that happens, a lot of the equity deals that are premised on expectations and lowcost financing will be finding this more difficult. Thank you so much for now. James is staying with us. Here is a look at what is coming up on on the move. Sticking your hand in the cookie jar, a chinese firm may be mulling a takeover of biscuits. This is on the move on bloomberg television. Buyout from a Chinese Equity Firm. For are exploring a ba did United Biscuits. What exactly else do we know . Me know that they might want our favorite digestive biscuits. I capital firm has 6. 8 billion to play with and is examining a aided for united this gets. Biscuit. That this will result in a bid. Blackstone in 061 bought the company for 1. 6 billion pounds. You may have heard of this brand. It was 400 Million Pounds. It will not be the first time a Chinese Company took an interest in the company. They attempted to sell the whole company to the Bright Food Group in shanghai. Interesting. Not this specific story. The broader story. The Chinese Equity Firms are looking to buy established western brands that have a big presence in developed markets. The interesting part is the food sector. This could have legs. Thank you for that. We are back with the chief investment officer. We have heard a lot about the fact that the chinese firms are looking at buying some european firms and some u. K. Once. Talk to me about biscuits. This seems to be an Industry Group that is going against all of the trends that we are seeing. Obsessed with how many calories we consume. Can a Biscuit Maker be a good value . Absolutely. Good and rans been a lean and efficient operation. I do not think the Chinese Companies are saying that this is a great food company, they are saying it is a reliable source of cash flow yields. This is a world where we can get access to credit and leverage. That seems to be at stake here and the valuation of United Biscuits is less than luxury companies. Think that this has considerable legs behind the drive forward into emerging markets. Downside risks, and my point of view, then upside risks. Luxury goods are more appropriate to look at and what types we should be playing for. Some of the bigger food groups are always trying to be more healthy. Absolutely. They cut down on what consumers want. Source of where calories come from. It is sugar and fat. Economies, there are opportunities to produce a diet that has a higher wattage the a fat and be more healthy dan the western diet. There may not be healthrelated concerns. They have concerns about what the place will be. Pharmaceuticals and the valuation of pharmaceuticals. I think about roche and pfizer. Novartis. Ther have the price you pay to participate is far less than is requed now. Are you surprised when you the cost of acquisitions . I was not surprised. Company to inuity other had the roaming majority of equity deals and to be in the open market, to form a hospital hostile takeover, it is not clear to me that the Chinese Companies can make shareholder returns so much more. That is unproven. Thank you. Lets have a look at luxury. Burberry. Manus cranny has been going over the numbers. They are doing well because of online offerings. This is a compelling christmas time. Has taken thewho concept of going into the store, connecting with you, and converting it. This is the critical aspect behind the numbers. Storese engaging and the , you come back to the website. When you go back to the website, that is the critical part of the strategy. It is doubledigit growth in china. The market was looking for this. Innovation, we talked about the beauty aspects and we will talk about it more later in the program. They have launched their beauty contribute 114 Million Pounds over 2014. Think of it this way. If you can take a Regent Street style store, compress it down, switch around and take a beauty product, that is what Christopher Bailey will take to guide through. It is all about beauty and aspirations. Belting and the top of the ftse is touching levels that you have not seen since october. It is 53 of the normal day of business. Thank you so much. And it at luxury space seems to be opening, in terms of innovation. We have a service that is high end and it is going in the beauty sector. Critical and i worry about valuations in the burberry story. Considereople should to cut back propositions instead of adding to them. Grandeur oft the luxury goods and burberry has in delaying the online opportunities well ahead of sales capacity. About wherery burberry is going to go. To me, that could include considerable investments. Interesting. Is it a stock you like . We have held it and we have been keen on it. A lot of this should have been anticipated to lighten the load. We talk about burberry and it has been a successful time. May be different to of other luxury retailers. They have made mistakes in their past. They took their brand downmarket and they felt that that was the way to get praise. The market did not want to be there. They rethought that strategy and that is where they came. Management ander high success. Contrast, i feel that there are plenty of luxury Good Companies that are really pricey and there is a huge amount of expectation moving forward. Whereot see why are the engine for real growth will come from. Goods might move down. Thank you so much. The chief investment officer. We will be talking a little bit about france. Francois hollande faces the public. We will hear with the president has to say about 2014 and, his alleged affair. Welcome back to on the move. Here are companies on the move. Sales jumped 10 . Released andll be Japan Airlines is investigating preflight maintenance. The instinct comes after a fire on a jet spurred a grounding of the global feet. The ceo says that he is open to merger talks. He says that he will contemplate controls of the m bb eight business. Combination the that led to the loss of 800 drops. The french president held his much anticipated News Conference yesterday and laid out policies while remaining very vague on the difficult times in his private life. He promised to clear it out before his Upcoming Trip to the United States. Precisely. We are not getting any details about the affair and i was there in this beautiful palace. A sea ofd velvet and journalists that were desperate to ask him about his private life. He was asked about the vision he has for france and the end of the speech had the question about the first lady. He was asked if she was still his first lady. They are not married. They have all these allegations of an affair. He dodged the question. Everybody in their personal life goes through ordeals and that is the case for me. These are painful moments. I have a principal that says that private manners are dealt in private. That respect everybody. No clear answer about if his partner will remain as first lady. He will give us clarity in advance of his trip to the United States and he is clearly not sticking by her and did not give a clear answer as to if she would remain his first lady. He has that inkling that we could have a new first lady soon. It was cryptic. There are all these rumors that she will be carrying his child child. What did he say about the French Economy . There is far more clarity there. He supported a packed that they discussed and he promised cuts to labor than 30 billion euros of cuts. He also promised to overhaul regulations to simplify them. In return, he wants companies to start hiring and 50,000 new jobs this year alone. The lobbies for business say spending, they will add one million jobs later. Thank you so much. Rance indeed. It is difficult to reconcile the pensions and protecting jobs in an economy that is dependent upon the private sector. There are concerns across europe that there is too much. Ureaucracy and red tape more particularly on france, i do worry that they do not have the ability to get a budget right. Thank you so much for that. We are back in two. Welcome back. We are in bloombergs European Headquarters in london and we are 30 minutes into the trading day. Lets see how things are shaping up. You can see that the dax is gaining one percent. We had some good news and Global Growth forecast are what investors are focusing on overall. This means a bunch more stocks rising today. Lets have a look at currencies. We are expecting a speech later on from george osborne. These are the Bloomberg Top headlines. There is a growth in the world there. You expect that the world trade will gain. Expanding and we had it up 0. 4 in 2012. Are doingys traders libor interviews. In the past six weeks, there has been a global investigation. Estimatesed analyst and joining me now is william from the s p capital and our markets editor who has been following the story. They be what the analysts were looking for in asia. Currency and are they launched a beauty box, a prototype store, before christmas. It is something that focused on in the news release and they around bring revenue at 100 Million Pounds. Judy is going to be a component of the bottom line. Why . Because it brings you in younger and brings you in as a brand. It improves the brand. You have a 5000 pound winter i have toare departure,ms of the this is a good set of numbers and he beat estimates. If you look at the online and we stick with beauty and the margins, you have to spend a lot of money to get it and get it distributed. Ok. Yeah. I think they are making it and a lot of it is coming out a theyree business and taking it under ownership, rather than franchise. It is a margin that is not different than the company margins. And for a a lot of it number of years, burberry had pretty good sales growth and pretty good store growth, in terms of count. The problem, as we see it, is that keeping and getting the ingins to where they were 2007 or 2008. We talk a lot about technology with burberry. They digitally advanced and we know all the pluses. What are they not doing 100 in your view . I think they are blocking and tackling. More strongly enforcing the branch and not necessarily trading higher sales for lower margins. We like their growth and we would rather see it in more profitable and highermargin areas. , halfe of the other names of their sales come from the big goods and the outerwear. These are the teachers that are selling the most. We are looking at the overall picture and their margins are the lowest in the industry. They are much lower than swatch. Even lower than m and h. What do they need to do . What are they going to do to resolve that . Well, onetime items, if you half, theye first saw margins decline and we do not see that kind of decline in the second half of the year. We see a wide decline in currency and supply chain issues that they have. They are not finding any way to offset those and the margins are going to be down stop it is a question of how much. What is your favorite . You cover them. That order. Other three that are non burberry, we have eyes on. It is a mystery. You think of the six flags and the plastic watches and they have high end watches. If i buy a watch what am i buying . A lot of people share the same perception as you of swatch. Is just a small part of their products and all they did is watches. They make 100 million in profits in franks. Francs. China slows down and the gifting process slows down hard and soft luxury, where is your view, in terms of china and where does that translate with hard and soft. Where do i want to be . You want to be in the hard luxury and that is where our luxury recommendations are more biased. We like it because they are not doing it well with the stores. They are doing it well with Traditional Jewelry and making expenses with manufacturing on swatch and, you know, keeps putting Investment Assets into manufacturing, themselves. It is why they dominate that. Thank you so much. The consumer Equity Analyst and our man and manus cranny. Losing 100 million making the smallest phone. What draws innovators. Elliott gotkine reports. There was a time when the economy was more famous for oranges. Now, case in point, this is a greenhouse growing mushrooms and is used to be a tractor. Now, you have israels inventor and arguably, the most famous innovator. He came north of tel aviv and we saw what he is up to now. He is not flashy. His best inventions are. And is a very excited huge capacity of one megabyte. 1993 and we went public. Which other product i am the inventor of the usb stick. This is the first usb stick that was put on the market. It was a global hit. His next that was not. The smallest phone in the world. Even a funky charging station could not save mode you from the all conquering iphone. His main focus is komi go. Has a suspicious usb stick. It has more tv channels and services. He says that money does not motivate him and that position is held by the hundred million teabags from the sale of m system. Hopefully, we will make this world focused and better. To die with no money and my ical. That seems unlikely. Some Companies Might fail. Do not bet against him picking in other big winner. We look at the nba and american basketball. Stay with us. In london, this is on the move. We are us dreaming live. The pulse is coming up. Coanchor. Ned by my we will talking a lot about sport. We will kick off thes the show later on. The football club, as a business will be joining us. He see football developing and where is it going next . We have a big focus. And the fone team will be joining us. These are global businesses. They have been guided and we have a few of his sport and the sport in general. Through a massive rule change. Will that reenter life in the liven the reen business. Ryan will be joining us and we will talk to you about plenty more in the focus of the pulse. I am looking forward to it. We will learn so much in extreme minutes from now. In 16 minutes from now. Here is some companies on the move. Traffic withstomer french sales being up 10 or down. Has appointed a new chief Financial Officer and they will pay a dividend of . 30 a share. That is the first since 2008. They will have poorly profits next month and a rebound from the government bankruptcy. Most in six weeks after the company saw shares grow beyond their target. The sedans in the Fourth Quarter are above their previous guidance. Hoops hops the pond this week. The Brooklyn Nets will be in london. We have the continuing push to glow go global. How are sports teams making money . Lets take a look at the Brooklyn Nets. They have not been successful on the court. 15wins 15 wins and 22 losses. They have been successful and aggressive in promoting themselves as a global franchise. Theyre playing against the atlanta hawks. They will go to china and russia and have three international players. They give people in other countries their own countrymen to look at and they have a russian owner. They can make a push into russia. The way they are trying to monetize things is say that they are not just an american team. They are a global team. We were talking to an analyst and this is what he had to say. Look at it from a business perspective and building the brand. Can they build a halo around the team that speaks to audiences all over the world . We advocate being global. Mikaelrogram off program off\ take a look at the Berkeley Center in brooklyn. The naming rights are owned by a british bank. Obviously, they want a way to conversely, if they do nothing else with this trip to validate the International Status of coming to london where barclays is headquartered, i think the ceo would say that this is a useful trip. If you look at the money they get, like the tv rights, it is a lot of money and the merchandise they sell, all the kids pooled and shared with all 30 teams in the league. The money they get to keep to themselves is from sponsors. If they have a Global Growth of the pie and advertisers, that is the way to help. We are also looking at football or soccer. A lot of these Football League clubs are already very popular in asia. Yeah. You know. That is the case in asia. A few look, there is a different issue. A specific one that is situated within the premier league. Over the years, what we have seen in the primary leak is billionaire owners pumping in hundreds of millions of dollars on several years back, they bought trophy players to win, win, win. They put the Balance Sheets at risk and hoped that they would get the big prize to charge more for tickets. Arsenal resisted that and we will talk to tom fox. Years, hefor several had a marketing problem. He had to go to stand and say, it is not just about this the first year in eight that they are at the top of the table and could win. It is not just about winning. It is about winning on solid ground and that is a difficult selling point in the pop. To win. Teams want we will talk about how he goes about selling arsenal and what that means to the bottom line and their business outside of the u. K. And the home market. Thank you so much. Stay with on the move. In london, this is on the move. Commercial aircraft distributor in the world. Bloomberg gives us an inside look at the surprising business with the cheap seats. Iran across this and call for you. In california. Worlds largest airplane sheet repair center. Ofhas tens of thousands airplane seats stacked to the roof. It is a leak a unique thing that you just stumble across. We have 12 people most of these guys have been here 15 years or more. They know the seats pretty well. Andt is a case of business it is tremendously less expensive to refurbish an existing seat. New seats are five or six times more expensive. You guys compete with American Companies . The five and see the five refurbishor see spurs, of which we call ourselves one of them. We do largescale. We configure seats based on the roots that they are doing. Is a tendency to go and a seating configuration they pack people and. You sit there and you get out and you can still stand up. How much would a set of three seats cost . A couple thousand dollars. You are talking six figures per plane. Yes. You have to restore the seats and has to do survive 16 ges of force. Your body gives up long before the seat does. It is overkill for a reason. Anything else that has struck you . We were buying interiors from south america. Wereticed that the seats drilled and places in case you want to stuff some marching powder. You see that from time to time. What wet the nature of do. Lets check in with our markets editor. Indices, thet the world bank is putting water on the fire. They are sending warnings and they are saying that there is a nice even quantitative easing withdrawal. E me the money money. Theyre talking about europe they are whereat america was 1. 5 years ago. They are not quite sure where to go and, if pushed in the right direction, they can be made to travel. With that in mind, europe is up and running and that is the main thing. The have not upgraded japan or the United States of america. What they are saying is that there is a health warning. They say that growth is where we needed. It is a little bit below expectations. This is for all of 2013. You are watching a little bit of m and day. A. M a ban a brand that we all know. United escaped. Biscuits. The blackstone and equity bought the snack part of the business for 4 billion pounds. They will bid. What we dont know if that will translate into a bed itself. So much for now. Stay with bloomberg tv. We will be back with the pulse that is next. In the meantime, you can follow all of us on twitter. The big names in sport come to bloomberg. We are going to talk to the people leading red bull and arsenal to commercial and sporting success. Getting personal. Attemptsh president s to jumpstart the economy are overshadowed by his affair. Shares in the uks largest luxury goods maker surged as its digital presence delivers. Good morning. You are watching the pulse. We are live from bloombergs