Transcripts For BLOOMBERG Taking Stock With Pimm Fox 20140416

From my radio cohost. Thank you so much. Shares of yahoo are rising in afterhours trading. That after the company set its First Quarter sales top estimates. The latest numbers may indicate that the turnaround effort under the c. E. O. Is having some success. Intel also reporting after the closing bell. The Worlds Largest Semiconductor Maker forecasts second Quarter Sales that may exceed estimates. Intel chips are used in more than 80 of the worlds p. C. s. And c. S. X. Is seeing better than expected profits. Earnings excluding a tax benefit worth 38 cents a share. Thank you very much. General motors chief executive says that the massive safety recall took too long to enact and that General Motors has begun shipping recall parts, that happened last week. She made the comments at the National Automobile Dealers Association today in new york. Lets listen. We know the world is watching and we know well be judged by our actions but i can tell you, everybody is working 24 7 to make sure we are doing the right thing. All right, doing the right thing. But the right thing according to u. S. Senator blumenthal is for g. M. To ground all affected automobiles and be up front about the dealerships. The company is getting parts to dealers as quickly as possible, with some detail and reaction, i want to bring in the senator. He joins us now from hartford, connecticut. Thank you for being here. Lets begin by what you feel is an appropriate response to g. M. s current position. I agree with mary that g. M. Should do the right thing, without the compulsion or intervention of the government or the department of justice. And the right thing here is to tell its customers driving its cars that g. M. Believes that these cars are unsafe, even when they dont have additional keys on the ignition switch. And mary committed to me during a Senate Hearing that if there was evidence that those cars are unsafe, if they hit rough roads, or jarring events, as the recall notice says, she would ground them. And now is the time to recognize there. Have been events since then that indicate these cars are unsafe to drive until they are repaired. So the right thing right now is to warn its customers. The dealers are doing their level best, very responsibly. And responsibly to make sure that these cars are repaired. But they need the parts and we surveyed the 34 dealerships in connecticut. Only 11 of the 14 that responded actually have received any of these parts. But g. M. Committed to have them by the end of the week. What is the deal here . Lets have a commitment as to when they are going to be delivered and why they havent been delivered already. Senator, in your communications with these dealers, did they indicate to you that they have made attempts to contact the g. M. Headquarters . What has been their explanation . The explanations we are going to ask them to provide, the survey was done by the connecticut Dealers Association which again represents the dealers who have been asking very responsibly and im very proud of our dealers because theyve reached out to customers to warn them that they have to bring the cars back. I think the explanation is simply that g. M. Is failing to provide these parts as quickly as needs to be done, as long as these cars are on the road. This also affects other recalls because it not only affects an ignition switch but also some of the power steering or some of the power train parts. Is this something that the dealerships have responded to specifically, saying that theyre just not getting the right part or that the g. M. Is somehow just overwhelmed by demand . Thats a good question. Because g. M. Has said that not only does the ignition switch need to be repaired, but also the ignition lock. So the question is, can it get the ignition lock as well as the ignition switches for these 2. 6 million cars, maybe more, as quickly as it says its going to do . It already has missed the promised date of last week. And the question that im asking, and im calling on mary barra, ive written her today, to answer is, when will these parts really be delivered . She says as soon as possible. But right now these cars are on the road and they imperil not only the divers drivers, g. M. s customers, but also others on the road who may be in danger when these cars lose control. Remember, when they lose control they lose the power steering, the power brakes and the air bags as well as the car just in effect, the engine stopping. Well, right now, senator, we have bloombergs matt miller. He attended mary barras speech today before the Automobile Association dealers auto motive forum and matt has got a question for you. All due respect, senator, im at a loss as to why you think these vehicles are still dangerous to operate on the road when the c. E. O. Of General Motors has said herself, she testified in front of congress, she would let her own son drive the vehicles, as long as theres not a heavy key chains with loads of keys attached to it. If theres just the key in the ignition, it seems General Motors is really assured that these cars are safe to drive. Is that incorrect . That is incorrect. According to the recall notice itself, which says that they are dangerous when they hit rough road conditions. Thats an exact quote. Or jarring events. Another exact quote. Right, i mean, most of the roads in america are rough due to the state of the infrastructure in this country. So that would be pretty much any time theyre on a highway. Why would she, and once again today she assured us, these cars are safe to drive if youve just got the key or in or just a ring on the key. I realize that the recall notice says that, but if the c. E. O. Of General Motors has done Extensive Research and talked to everybody at the company and assures congress and the public that these cars are still safe to drive, why do you think that she would be lying . Thats a real question for her. I dont think shes lying. But she promised that she would provide those tests and analyses that g. M. Says its done to the United States congress. I asked her specifically that she provide them. We still havent seen them. And so the question for her is, really, how can you let your own son behind the wheel of a car that the recall notice indicates is unsafe to drive . And there have been reports since then, matt, you know that the New York Times reported several incidents of the cars losing their power, the power brakes and steering failing to work, which means the air bags would not deploy, which is a pretty serious danger to anybody behind the wheel. Senator, youre the former attorney general of the state of connecticut. What kind of Legal Recourse do people have or the dealers have to make sure that they get the parts necessary in order to fix these automobiles or any potential liability that g. M. Would operate under . Well, thats a very pertinent and important question, matt. Because g. M. Has said that it wont be held liable. In fact, it is disclaiming and denying any liability for the old g. M. Prior to the reorganization in 2009. It has a shield from liability which i opposed when i was attorney general, along with a number of my colleagues. But now Going Forward it incurs liability for failing to sufficiently warn people who may be in danger. Because of the defects in these cars and because g. M. Is failing to provide sufficient information to fairly and accurately tell them about what the dangers are. So g. M. s incurring additional liability. In addition, the department of justice has a criminal investigation ongoing. Ive written a letter with a number of my colleagues asking the department of justice to compel g. M. To provide stronger warnings and also to establish a compensation fund. And finally ive asked g. M. To support legislation that senator markey and i have proposed that would require better reporting and fuller disclosure through a database by the federal government itself. Because the story here is not only about g. M. s concealment of these defects prior to now, for over 10 years, but also about the regulatory failure of the federal government to better protect citizens against these kinds of defects. So there is a lot here but g. M. Right now is failing to sufficiently warn and provide parts to sufficiently repair these vehicles. Well, senator, if its the case that mary barra and General Motors are not issuing a park it order, and she should and the government believes they should, because these cars really are too dangerous, can the department of justice not compel General Motors to issue that order to save citizens lives . Well, ive urged the department of justice to take whatever action it can do. It may not have direct control over the national highway Traffic Safety administration, which is an independent agency, but i believe the federal government has a responsibility to act more vigorously here and thats why ive written the department of justice and also urged action by nhtsa to better protect drivers. Thank you very much, senator. My thanks also to bloombergs matt miller. Coming up on taking stock, tracking technology such as bar codes, getting a lot more horse power. Zebra technologies announced plans to buy motorola solution business enterprise. Im going talk to zebras chief executive. Thats next. The shares of Zebra Technology slumping today by more than 10 . Why . Theyre up about 13. 5 since the beginning of the year. But their company today announced it is buying a unit of Motorola Solutions for about 3. 5 billion. Theyre betting on mobile Computing Services for businesses that needs to track their employees and track products. Im joined now by Zebra Technology chief executive, anders gustafsson. Thank you very much for being here. Lets talk about what it is exactly that Zebra Technology is buying. What are you getting . Were buying the Enterprise Solutions part of Motorola Solutions. So that is the former symbol name. Symbol technologies. But it also includes rugged mobile, data scanners, wireless land products, a number of other products around that. But its all part of basically what has historically been the other end of zebra solution. Weve worked in front of customers together for years. Were doing a piece, theyre doing another piece, but together were offering a more complete solution for our customers. Im wondering if you can just describe an example. Because Zebra Technology may be familiar to people who go to the checkout counter and they see someone with a bar code reader and that bar code reader and system is connected to what Zebra Technology does in terms of even just putting the bar code on there. Absolutely. Both zebra and the Enterprise Business of motorola, weve been hiding in plain sight for many, many years. Most people get in contact with us both professionally and in their regular private lives, many times without necessarily knowing. Examples what have we do would be you get a package from your favorite etailer. The package on the label would be printed by us and helped routed by the Enterprise Business. You return so youd be able to track the package with a comprehensive Zebra Technology solution . Correct. We help with both providing the label that you can have all the information and then you can read that, you have you know where that is as that goes along. Whats the biggest challenge to trying to fit these two pieces together . I want to just make note that youre basically doubling the size of the company with this 3. 5 billion acquisition. Yeah, so we have worked with the same customers, side by side, with the same customers for years. Offering two parts of a solution. So we know each other very well. We know our sales organization, we have the same customer, we have the same channel partners. So for us we have a lot of commonality, a similar culture. And were very proud to be able to invite these new employees into the zebra familiar. 3. 5 billion. Thats the estimated purchase price. You have to borrow money to make the deal happen. Yes, we borrowed 3. 2 billion. Now, you didnt have any debt before today. Thats right. We had no debt. So what is the strategy or whats the process by which you do the analysis and you say, you know what, borrowing a little bit more than 3 billion, 3. 2 billion for an acquisition of 3. 45 billion, that makes Good Business sense because thats going to fuel our business and show our growth. When does this start to show up for Share Holders . Very quickly. The acquisition will be achieved in the first year and we will earn our cost of capital within three years. And we look hard at how we could finance this transaction but the debt markets are very attractive and youre putting two leading companies together who are both very cash generative. We expect we can easily pay down debt to be less than three times in year three. Technology stocks have sold off in the last two to three weeks. Is this something that is in reaction to a wait and see what happens with earnings or is there something deeper going on . Im not really a market commentary person. The market didnt react as enthusiastically as i had hoped. Why we are so excised about it, why i and my Management Team are so excited about this, we feel theres no deeper other than the deal today, im just talking about Technology Stocks in general, Growth Stocks that investors may be looking to invest in, theyve fallen. Has that been something that youve noted or has anyone in the industry been talking about this . Sure, we noted it, absolutely. Obviously big, big drop. Not the most helpful backdrop for us but my personal sense is thats more of a temporary activity. We havent seen any changes in our markets. Today we preannounced our q1 earnings and they were very strong. Our revenue is up 20 year over year. So our markets have continued to be very strong. I dont feel thats an indication of anything being wrong in our end markets. And youre going to keep us up to date on the sort of transition period when you meld these two companies together. Sure. Yeah. Ill be happy to come and talk to you about that. Thank you very much. I want to thank you, chief executive of Zebra Technology. Coming up on taking stock, the chief executive behind the first publicly traded Real Estate Company that focuses solely on new york city. Details ahead. New york reit. Real Estate Investment trust, today it became the first publicly traded real Estate Investment company that focuses solely on real estate in new york city. With this listing on the new york stock exchange, it is led by nicholas and he is the chairman of American Reality Capital Properties and hes the biggest fundraiser in the real Estate Investment trust industry. He joins me now here in new york city. Nick, thank you very much for being here. I want people to just understand a little bit of your background. Because you didnt start off in the commercial real estate business. You started off i think it was like at the age 17. You were running a scrap metal business with your family. Yes. So i started young. I worked coming out of high school and in through college and that led me to about 13 different mergers and by the time i was 35 i went into the business. You have to explain for people that may not be familiar with it, that you have an eye sometimes at least for things that other people dont believe have value. Im particularly interested in the story about a bunch of Bank Branches that you bought when people thought they werent going to be around anymore. When first union merged with core states, we bought a portfolio for about 107 Bank Branches that were being closed. When they closed those locations, the theory was that banks were going out of businesses, malls were closing, everybody was going to lay in bed and work on the internet. When they realized that banks werent going out of business, we ended up leasing those locations to other banks rather than core states. We leased them to bank of america, we leased them to fleet or other banks. And it turned out to be a wonderful deal and the cornerstone of a 5 billion public recall to a. F. R. You see something that other people dont see right now, its new york city real estate. Why a reit that is focused solely on new york . Well, when we started, my partner and i looked into space and we thought that this was a market we live in. But it was very hard to get good yields in new york. And the last time there was a major downturn in real estate in new york was 1991. When everybody knew that the crane stopped spinning and the world was very different then. And there hasnt been an opportunity to buy real estate, good real estate, fully occupied real estate. These are not fixeruppers. This was about buying during a time in the market when there was a down draft and when the financial crisis hit in 2008 we thought, nows the right time. You can buy new York Real Estate at six caps and seven caps. Those havent been available in decades. We looked at the market and we decided to build a reit that was solely focused and we hired someone to join us as a partner in the firm who is the president of the company today out of morgan stanley. And we together built the new york city reit and today we have over three million square feet. We have a diverse portfolio of office, retail, parking garages, hotels. We recently bought worldwide plaza, we bought the viceroy and today were a public company. I want to congratulate you on being a public company. Keep us up to date on new york city real estate. This is taking stock. This is taking stock on bloomberg. Im pimm fox. For a look at todays market moving headlines, i want to go to my radio cohost. Thank you. We begin in ukraine where the government unleashed an offensive to dislodge militants. Ukrainian officials said Russian Special forces were identified among the antigovernment groups. At least four militants were killed when ukrainian troops stormed an air field. This is according to russian television. In corporate news, cocacola showing signs of a rebound. Sales volume in north america stopped declining. Sale volume was strong in some overseas market, including china. That stock up nearly 4 in todays session. And johnson and johnson Beat Estimates and raised its 2014 forecast. Theyre focusing on new drugs. The Drug Division overtook medical devices as the companys biggest unit after its sale surged 11 to 7. 5 billion. That stock shows up about 2 today. Back over to you. Thanks very much. Now the shining stars of the technology world, they arent getting any love from the locals in San Francisco. Today Union Workers are marching on twitters Head Quarters with a bill they want twitter to pay. 56 million for the tax break that they say the city gave to twitter. Bloombergs megan hughs joins us now. Whats the latest . Well, what an appropriate place to be on tax day. A protest in San Francisco over twitters tax breaks. This is expected to get under way in less than two hours. It will be rush hour here in San Francisco. Organizers are expecting about 1,000 people to meet at city hall, march right over here to twitter headquarters. Theyre protesting these tax breaks that the city gives to twitter. But also to a number of other Tech Companies as well, to lure them to locate here in this area which used to be a very blighted area. And what the Companies Get in return, theyre exempt from paying payroll taxes on new hires. For a sixto eightyear period, theyre also exempt from paying some taxes on other forms of income. So ideal for companies that are growing, that are considering an i. P. O. But critics say its taking a bite out of the city budget, that these Tech Companies dont need these sweet deals to be lords to San Francisco or stay in San Francisco and bottom line, this is a fight over income inequality. A lot of these workers here, service workers, stiu members believe theyre being priced out of the city. What does twitter say about all of this . Do they have a reaction . They do. This 56 million bill that the Union Workers say the city isnt getting because of these tax breaks, twitter says that number is just bogus. Representatives there say twitter probably would not have stayed in San Francisco back in 2011. They were on the verge of a hiring binge, an i. P. O. On the horizon and it wouldnt have made sense with San Franciscos taxes, the way that they are, to stay in the city. So these tax breaks from twitters perspective were necessary to keep them here. And as i mentioned, it isnt just twitter. Theres actually more than a Dozen Companies that are getting these tax breaks. So youve got dolby, uber, square that have all located in this area. But twitter is the focus of this protest today. Largely because theyre the biggest ones. Theyve also created the most jobs. Theyve created 2,600 jobs since this tax break was enacted. In this neighborhood. So it certainly has had an impact and city leaders point to those jobs and payroll taxes, property taxes, sales taxes and say this is an economic boone to this neighborhood, if you take the long view. Just one question. If they are so annoyed by this 56 million rebate that twitter supposedly received, if its legal, why dont they picket city hall rather than the company . If this is what the government, the City Government intended to happen, it seems like this was a success. I think the ire has spread around a bit. Theyre meeting at city hall and coming to twitter. Theres a lot of animosity right now between the workers and the Tech Community and whats happening within this city. Rents have obviously gone up. You take a look around here, to rent office space, its gone up 80 during this time. Which a lot of people think is a good thing but theres a question, is becoming more desirable more expensive a good thing for all people in the city . I want to thank you very much. Reporting from San Francisco, outside of twitter headquarters. Lets stay on technology today. But lets talk about a launch. A makeover. A. O. L. Today says it is redoing its website in order to offer what they call premium video experience. It is the latest move in the online media wars. For our attention here, to tell us more about this announcement, is the president of aol. Com. Thank you very much for being here. Thank you for having me. Tell me about this new push, its an invigorated push into video. Definitely. Were seeing video consumption from our audience from millions of people who come to aol. Com every day, surging. People are watching more and more video. For us this is really about putting video front and center where our audience wants it. In the middle of the pages. Does this mean spending more of a. O. L. s own money on deals to pull in different kinds of video . It means investing in original content which were doing as a company. It also means partnering and opening up our ecosystem to partner with great content brands. Today we launch with folks like espn, h. S. N. Real world class creators and putting their content front and center. In part of the measurement tools show that viewers on a. O. L. , i believe they watch more videos than those that go to other websites. I think it was Something Like 17 videos. Exactly. We have record levels of engagement. In march alone we increased time spent by 15 , to 30 minutes average. So were seeing our audience consume more and more video content and we really feel like our job is to program that dynamically and make sure that were putting in the right video in front of the audience at the right time of day. You youve heard a lot about linear television, Live Television versus the archived segments. You have found that there is a have you found that there is a balance that the audience wants or do they prefer one over the other . I think its a mix. I think theres times when programming matters so much. Theres a reason why we all have tv and the power of humans programming. But we dont have to set our programming schedule weeks in advance. We can see what our audience is reacting to and program on demand, on the fly. We hope that were really getting the best of both worlds with this new experience on aol. Com. So you could necessarily track or understand what someone is watching and then serve up alternative choices for their future viewing based of course on their patterns. Exactly. A great example i think today, obviously it was the oneyear marker of the boston bombing. We saw our users really viewing all of the video content we had around the tributes and commemorating that and we just put more and more of that video content in front of our audience. Because thats what mattered to them this afternoon. Does that also mean thats what matters to advertisers . You have to sell this. The cost per thousand of reaching people, what have you seen over the last couple of months . I think advertisers and marketers want to be where those engaged consumers are. And the demand for video advertising is very high. And so our job is, how do we deliver more and more video views . And if we do that, we think well be a great partner for advertisers. Is it still about cats and, you know, those home funny videos . What is it that really grabs peoples attention online . Its a mix. I think its the original premium, great quality content. But then some of those viral sensations that we all must see, you feel left out if you havent seen that video, we have an everyones watching section of our new experience and thats very much going to be the clips that if you havent seen youre going to be left out of it. Do you have a favorite . Oh, gosh. I honestly youre watching the Boston Marathon not really. For me, i think about a year ago and how everyone in the nation and really around the world and how historic that event is and how that city has really rallied, i think we got great feedback from those videos today on our site and i think its an example of people wanting program, relevant, timely, great content. Thank you for sharing your time with us. The president of aol. Com, maureen sullivan. Coming up next on taking stock, ill talk to the chief executive of maui wowi. Now, buying into a business franchise in some cases it can cost hundreds of thousands of dollars. But a franchise called maui wowi doesnt have a onesizefitsall model it. It sells coffee and smoothies from carts as well as from resale store locations. Joining me now is the chief executive of maui wowi, mike weinberger. Thank you for being here. Aloha is appropriate for maui wowi but you dont have a location in hawaii. How is that possible . We wanted to bring hawaii over to the mainland. Thats the reason why. Ok, so you bring hawaii to the mainland. Tell people about the coffees and the smoothie business. Yeah, exactly. Wanted to bring the aloha spirit, vacation in a cup. What people experience when they go over there for their honeymoons, their birthdays and big events. Thats what maui wowi is. When you take a sip, thats what you feel. What kinds of smoothies . Give us examples of the things that youre selling and the most popular flavors. Strawberrys our most popular. Pina colada is moving quickly up the charts. We allow a temporary Liquor License in some of our events. You can add some alcohol there and its moving quick. Right next to you you have our peach which is our limited time offer. Its a peach l. T. O. Limited time offer. Orchard peach. Orchard peach. Its delicious. Seasonal. Seasonal. Tell people about the different offerings that youve got in terms of the businesses at maui wowi. Because its not just retail locations. It can be anything like the houston livestock and rodeo show it. It can be a kiosk or vendor at the Minnesota Vikings stadium. Yeah. I like to say, maui wowis what you want to make it. Mobile carts. We have over 400 around the country. We have catering, we have stores, we have drivethroughs, we have kiosks in malls. Currently were in military bases, hospitals, three nfl teams, one nhl. We just opened in coney island yesterday. So were wherever you are, were there. Congratulations on your new opening. What does a kiosk or a cart, what does that cost if people want to get started . So a startup franchise cost is around 70,000. That will get you into the franchise fee, your Opening Inventory and a cart. Thats our workhorse. Its our biggest unit, our best unit. A lot of people have them. We have 400 of those around the country. Whats the biggest growing market right now . Southern california, minnesota are growing very quickly. You can see that nothing similar about weather patterns or what not. But january in minnesota, its one of our busiest times. Tell us about the coffee business. You feel the heat from competition like starbucks . No, starbucks is great, but we like to think weve got a niche in the hawaiian coffee business. We bring our coffee beans over from hawaii, roast them here in colorado and overnight them out to franchises and you can purchase them on our website. We dont have a lot of competition on that front. What would you like to see happen to maui wowi over the next 12 months . Its been around as a brand 32 years. Weve been flying under the radar. I want to see us grow. I want people to know who we are. You have 400 locations right now. Would you like to double that in the next three to five years . Is there a specific goal . This year were going to add 50 units. Next year i project 80. So id say about 40 growth in the next three to five years. Are you finding that the people that want these franchises have a background already in operating a franchise . Or are they new to the business . They come from all walks of life. We have a lot of military veterans that come in. We offer them a 10 discount. We have School Teachers who are looking for a job in the summer and we have people with extensive food Service Background that wanted their own business. The only common denominator is a smile and the aloha spirit. What about the actual packaging . I notice for example that youve got the umbrellas that are iconic but also the colored cups and what kinds of packaging do you have to go through . We provide all the packaging for our franchisees. Our tiki cups are our best sellers. The kids love them. The parents sort of love them. But theyre great. Seasonal locations. You mentioned the seasonal lets say peach drink. What about seasonal locations . Do you find that theres a sales shift over the summer months . You know, were pretty much yearround now. Whats interesting about maui wowi is were on wheels. So people who do big events, Orange County fair, 40 days straight. Houston radio, 20 days straight. Kony island will be open just during the Amusement Park season. We have wintertime events too. It depends on whats going on. We dont do territories either. If you want to go south for the winter with your cart, go ahead. You can be a snow bird. Do you have a particular favorite when it comes to a smoothie or beverage . Black raspberry is my favorite. Is this something that youve evolved over the years . Or youve always been a black raspberry . Ever since day one. Ive been with maui wowi a little over three years. Thank you very much. Mike weinberger. Coming up on taking stock, the actress Sarah Jessica parker is starting her best foot forward literally. Shes got a new line of shoewear. Were going to find out why shes targeting a very specific part of the market. Thats next. All right. Youre watching taking stock on bloomberg. You of course follow us on bloomberg radio. 1200 in boston and 1130 in new york. Sarah Jessica Parker is taking another step into the world of fashion. Shes created her own life of footwear. Parkers latest effort is the lead story in the etc. Section of Bloomberg Business week magazine. Its called the woman who lived in a shoe. Joining me now is the editor and the writer, the author of the story. Great to have you both here. Tell us about the details of this new line of footwear. Well, the shoes are a range in price between 200 and 500. Roughly speaking. So theyre a lot less than the shoes that she sort of made popular on the show, which are now kind of in the 700 or 800 range. Theyre pretty basic. Theyre bright colors involved. But she described them as kind of a neutral. So and theres a bit of like a 1970s reference to them. A 1970s reference. Come in on this, on the topic of an actress, not just lending her name to a line of shoes but starting a business with her name on it. Yeah, well, and also Sarah Jessica parker is always going to be linked to her character from sex and the city, Carrie Bradshaw. And carry bradshaw had this shoe obsession. Basically Sarah Jessica parker is now playing off that role and transitioning it into reallife business and saying, ok, you know, theres a fine, blurry line between me and my character. And im endorsing and designing, she says she designs the shoes also and you should buy them if you liked Carrie Bradshaw also. Whats the track record of a celebrity starting their own business like this . Its up and down. There are some people who have done really, really well. Theres Jessica Simpson who for a moment everyone said was a billionaire with her shoe and clothing line and some people dont do as well. Actually Sarah Jessica parker has tried this before with a fashion line called bitten and it failed. It was sold at a Discount Retail that are went into bankruptcy. But this time shes partnering with nordstroms and so far the shoe is doing well. Wheres the competition . Who loses as a result of this . Who do they have to take market share from . Its interesting. Very luxury shoes have kind of crept up to sort of the four figure mark the four figure mark . Over 1,000 . Yes. Yes. This kind of range of sort of 200 to 500, this has been not really that populated in terms of other brands. Theres j. Crew, theres l. K. Bennett which is a sort of british export thats popular with people in england because of Kate Middleton but theres not a lot there. Shes pretty savvy for getting in at this price point. Theres a hole in the market right there. Luxury is growing. Luxury footwear especially is doing really well. And theres a market for this. Theres a Consumer Market that really wants nicely made goods but cant afford a 1,200 boot or an 800 high heel. Shes partnering with the president of manolo blahnik. Theres room for someone to buy a 400 shoe and think, i got a wellmade, beautiful shoe, but i didnt have to spend my entire paycheck. You mentioned nordstroms. What about direct selling to the consumer . She hasnt done that yet. This is a specific thing theyre doing, by partnering with one department store. They think that that way theyre going to somehow connect with the consumer more and shes doing a store tour and theyre helping with the marketing costs too. So its a Real Partnership between them. What about the success or failure of this venture . Would that then lead to an extension of the line in offering fashion as well as shoes . Right now they have a few trench coats and a few bags and i think if it does do well, she sort of indicated that theyd be interested in expanding the offerings. Can we expect to Sarah Jessica parker pushing this line and selling it all over the airwaves . Oh, yes. Shes been on a huge publicity blitz for the shoes. The quality of these shoes. You mentioned the price point. But is there any notion as to whether the quality of the shoe is going to be something that people say, gee, i got a bargain . That was partly what theyve been trying to do with they have the factory in italy. The quality is supposed to be actually pretty good. They look pretty expensive, they feel pretty expensive. I havent worn them so im not sure are they for you . Would they be for you . I think some of the more basic styles are really very useful and will go with any sort of work wardrobe as well as dressed up. I want to thank you very much. Thanks for taking stock. Im pimm fox