Angelo Zino, Senior Equity Analyst at CFRA Research, breaks down Apple sales declining for a fourth straight quarter, marking the longest slowdown since 2001, as the company struggles with sluggish demand and a shaky smartphone market in China. Bloomberg News International Economics & Policy Correspondent Michael McKee has a recap of Wednesday's Fed decision and looks at the state of the US economy. Ron Goetzel, Senior Scientist in the Department of Health, Behavior and Society at the Johns Hopkins Bloomberg School of Public Health, shares his thoughts on workplace mental health issues. Bloomberg Businessweek Editor Joel Weber and Bloomberg News Real Estate Reporters Patrick Clark and Prashant Gopal share the details of the Businessweek Magazine cover story US Housing Market Becomes Impossible Mess With No End in Sight. And we Drive to the Close with Lance Cannon, Portfolio Manager at Hood River Capital Management.
Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.

FULL TRANSCRIPT:

This is Bloomberg Business Week with Carol Messer and Tim Stenebek on Bloomberg Radio. Well, our audience knows our next guest very well. He's been joining our program for years. I know you. We were talking about it as we were getting ready. I went deep into the terminal. Carol like, just search on my name and put in Nate's name, and you'll say, and Carol, just you know, she leans over me and starts typing into the terminal. She's like, I search on my name all the time. No, she didn't really do that. I did find though. He was on with you and Mike McKee. Mike McKee, Okay, the show was called taking Stock Back in twenty fourteen. That was the year they actually launched Roan. That was the first year. That was the first So he's been here since the beginning. Nateateek, it's of course, co founder and CEO of Roan joining us now. Welcome, Welcome, welcome back. Thank you so much. I feel I feel as close to being at home on air here than anywhere else. Well, likewise, we feel like you're part of the family, and we're so glad to have you back. It's been I feel like a big year for you guys, really big year. I've been big month in particular, a lot of a lot of exciting thing's happening. Can we talk though, about the billionaire Blackstone executive David Blitzer, former hedge fund manager Gabe Plokin, ex football stars Tim Tebow, Steve Young. They did a deal and they're now involved in the company. Yeah, it's so the quick story is a year ago, right, July twenty so we just announced it, but this happened July of last year, and effectively what happened is we put a group together in an SPV with really exciting names, a bunch of kurrent and retired athletes as well as just incredible people like Blitzer and Gabe, and we bought out the private equity interest in our business so that we can really think about the business in a more long term way. What was it that the private equity firm wanted to do that you weren't ready to do? It? Really wasn't. They weren't pushing us to do anything. But the nature of private equity is a five to seven year whole time, and we were in we were coming into year five and they're great partners. In fact, that we're talking about el Ca Caterton, the managing partner of their growth fund, is still on our board. Even though they sold their interest. That was part of something that I really wanted as part of the deal and they you know, I just was kind of forecasting the future macroeconomically, time of uncertainty if they wanted us to sell the business and it wasn't right for us. So and more than anything, I kind of fell back in love with the brand and the company, and I thought I kind of want to do this maybe for thirty forty years, not five years. Why had you fallen maybe out of love a little bit. Well, the pandemic was a really stressful time, you know, not just your statement. Yeah, yeah, it was a stressful time for every business, every person, but certainly I think for me as a leader of a company, it felt like there was a new crisis every single week and we had some growing up to do. You know. The business still grew tremendously during that time. In fact, it was great for businesses like ours, but it really wrung me out, and I think I was at a point where, you know, just we talk a lot about mental health in our company, I was at a breaking point, and I like, I either need to sell this company or something needs to change. And for me, the thing that needed to change is I needed to feel almost more invested in it and I need to make some changes. I've heard of quote I just want to where you said, I think after this and kind of getting back control, nothing has changed and everything has changed, Yeah, which kind of says so much. Yeah, it's really exactly how I feel. Even though conceptually, you know, el Caderton was a minority shareholder in the business, so in theory their ownership change to a new group didn't change anything, but the way I feel has changed completely. Do you feel more in control? Absolutely? Yeah. And I have a controlling stake in the company. Yes. So you know, we call it because my brother is involved. I've got a brother in law, so we've got family control of the business and the goal is to have a long term hold here. Dad's involved. Well, that was one of the most exciting parts about this. I called him. You know, my parents have spent three years in London doing service and came back and I said, hey, I have this crazy idea. What do you think about this? And you know, he's an incredibly experienced executive and he said, I love it. What can I do to help? So we added him to the board and it's been a dream. I've told people, Look, there are people who are going to say, oh, you know, you're working with your dad and I all I do is I forecast twenty years in the future, and I think if I could, if I didn't take this opportunity, I would regret it for the rest of my life. And I get a chance to I get a chance to work with him and you know, and have that family relationship. It's incredibly unique and special. Yeah, no doubt about it. Right. We only get to do this once. Yeah, right, got to figure out how you want to do it. Well, not investors though, in the sports world yep. So how are you then, maybe thinking about you know, we talk often about branding and partnerships and especially with athletes. How are you guys thinking about that as part of the strategy, the growth strategy going forward? Well, it's interesting our brand launched as an active brand, so we were carried in Equinox and Peloton and Soul Cycle and Barry's boot Camp in places like that, and then we added in our commuter lane. I'm wearing a full commuter shirt and a commuter you know, commuter the computer and it's been an incredible part of our business. But active is at our roots. That's how we still see ourselves as a performance brand. So the sports partnerships, the athlete partnerships, is something that we're planning to lean into more as part of this. We have seven professional sports team owners on the cap table. We have the NFL, NBA, Major League Baseball, Major League Soccer, English Premier League all represented across the ownership group, and that's that's a great opportunity for us and a great revenue mover. Eventually, could you see yourself doing lines around an athlete. I certainly think there would be collections and collaborations in the future. Yeah. What's the bricks and mortar strategy right now? So we've opened eleven stores in the last twelve months, so we have we have fifteen source total. Now I thought, yeah, it's it is certainly not for us in our stores are all profitable. The payback period has been incredibly quick on these stores and what they do for us in a market. We can measure the e comm impact and the awareness impact when we open a new store, So I think it's getting more competitive though. Every brand is trying to open retail, So there, you know, there was kind of a window of opportunity. I think that window is starting to close. Also, you know what's happening macroeconomically, that may shift over time. But online digital acquisition costs have been growing at such an increasing rate everybody's playing in that space that it became really expensive to acquire companies online. Now you now you can acquire companies or customers the old fashioned way through retail and make money as you're acquiring them. How do you how do you track that the eCOM left? Yeah, how do your yeah? Exactly? How do you know that what's happening in the store outside of a store will lead to a sale online? So we have a baseline of data in every single market that be tracked by a zip code. Right and after you open a store, there's a thirty day measurement, a three month measurement, a six month measurement, and a year long measurement. And you try and see did the baseline of e comm rise since the store opening? Is it complete direct correlation? Hard to know because the brand's also growing, But if you if you then minus overall brand growth did the market grow at an above rate of the standard growth rate? And that's kind of how we think about measuring it. I am always curious about like a product line or a brand because I think sometimes you can grow too fast in terms of the stuff you offer that it just gets overwhelming. So how do you think about how you kind of, you know, cultivate that or curate that so that you don't kind of overwhelm the consumer. It's tricky because the customer has given us such opportunity to do so many things, as we've introduced commuter and we have we have to guard ourselves a little bit against it. But right now we say we really can outfit about eighty percent of a guy's closet. And not a single day passed in the pandemic where I didn't get a text from somebody saying I've realized all I've worn for the last six months is Roan. I walked in today and our friend Jason Kelly's like, I didn't know you were coming, and I'm top to bottom, so it's kind of top to bottom. Yeah, So we're really lucky that we've got diehard customers and they really wear the brand in multiple settings we've got to take a commercial break, but we know that finally you're doing something for the better half. Yes, absolutely, the better half. So we want to talk about that and your offerings and just kind of where growth goes from here, because it sounds like going public. Should we wait to talk about that. Let's talk post commercial break about that. We are here with Nate Check. It's Ron co founder and CEO with us in our Bloomberg Interactive Broker studio. I'm only going to ask this because we are focused on the labor market right now with all the data points coming, are you getting all the workers you want? Yeah? I mean we've been lucky. We've always paid above market for retail in particular, that was the toughest piece, you know, as we've scaled the But it's so critical to have good people in your stores. It makes all the difference. If a store is not performing well and you put the right person in, it will just completely transform how the store performs. So we've been fortunate that we've been able to attract really good talent. Speaking of those stores, they're going to start selling women's stuff finally, even every interview at the end either, Yeah, So when's it happening. So this coming May, we will be launching women's and it's incredibly exciting. It's been a long time in the works. You know, we've started. We started as a men's brand. We did a women's capsule in twenty nineteen and it went so well, it sold out. But you go into twenty twenty and do you want to take the inventory risk and continue to lean into it. But we brought an incredible chief product officer who is really the most talented fabric person I've ever worked with, and she has put together an incredible initial collection. It's been received so well as we've taken it to market and introduced it to wear testers. And part of the big story of Roan is that we added three very talented female executives over the last three years and they've been a big part of our success. And seventy percent of our team is female. So we wanted to build a collection that they were proud and excited to wear, and I basically just tried to get out of the way intentional hiring women. I would say we hired the absolute best people for the position, and they happened to be women. I think we have always believed in building a diverse and strong team, and we needed that at every level. We've just added a female board director named Tess Roaring, who's incredibly talented. But we always try and hire the best person for the job, and the best for the job for these jobs were the women that we hired. I talked to us about financials. You guys have said publicly, are you going to do a commuter suit for women? I can't reveal new collections on how they're waiting numbers. I know you're going to be bluebarg as we should be, but I'm just okay. So one hundred million dollar annual run rate profitable last three years, yep. What else can you tell us? Well, the company's growing twice as fast since we did this transaction than we did, you know, than we were growing before. And better environment or what I would say. It's actually probably a harder environment. Most of the brands in our space are flat down quite significantly. This year. We've opened eleven stores, as I mentioned, in the last twelve months. There's been strong growth in a couple of our categories. We have some product lines that are growing at north of three hundred percent this year. So we feel really good about where the business is today, and we you know, we have a lot of conviction that we can continue to grow in scale. It's not not easy, but we're excited. All right. We got a little bit of a lightning round. I don't think this has ever happened before the first time. Okay, you don't have to answer in a lightning way, because some of these are longer answers. Okay, work life balance, we talk a lot about work life balance. You share so much of your life on Instagram. I followed you for years. You have family, kids. Is work life balance and illusion? Yes it is. I mean, I don't even like the word balance. I think it's a I think it's the wrong term. And I think I've grown as I've thought more about this. I really love I can't remember where I heard this. I love the word harmony because in theory, when you're doing it right, your work should help you at home and your home should help you at work. And you know that the balance makes it feel like there should be a bucket of each and you need to make them equal or a certain proportion, and harmony shows you how they can really influence each other. And for me, becoming a better leader in the workplace. Being more thoughtful and sensitive, how I approach conversations, how we think about long term planning has for sure made me a better parent and I hope a better partner. Do where to go? Okay, this is back to kind of hardcore business. What prompts men to buy activewear these days? Has anything changed? What gets their own target demo to pull out the plastic and buy? Yeah? What's really exciting is I think that the shift during COVID, where I think in particular, we saw a shift for men to start taking better care of themselves, to allow themselves to take better care of themselves. That I think has continued and I hope never goes back. It's really important. And so you know, there's a lot of different modalities. It could be yoga, it could be running, it could be cycling. But most of our customers do a balance of all of those. You talked about the athletic side of the business. Is that still the big chunk of the business. It's pretty equal at this point in our commuter lines. Yeah, there are a lot of customers who only know us for our commuter line. Wow, what's more profitable? I would say our commuter line is more profitable. It's a higher price point. Okay, Okay, So when you told us earlier that covid was really challenging, Yeah, was that as challenging as the first couple of years of just getting the brand off the ground and like knocking on doors and getting Peloton and Equinox and barriers to carry this stuff. It was more challenging for me, it was. There's no question it was more challenging. In the beginning. You're so excited and you've got nothing to lose, right, So you're kind of trying to build this business from scratch, and if you lose it, you know, no harm, no FAULI it, it doesn't it's not worth anything at that point. But then as it grows, there's more pressure. There's more people, you know, and I care so deeply about how our team feels about work and and so the pandemic was hard again on so many people and so many families. I just felt that weight all the time, and I didn't know how to relieve it. So for me, it was harder. Last question, right, Yeah, if everything goes according to plan, Ron will fill in the blank. Ron will have a massive impact on the mental health in this country. Wow. We have we do have one minute left. Oh huh yeah. Mental health okay, personally yeah, how did you get past that hump that you faced during the pandemic. Well, I think a big part of it for me was building a toolkit and understanding how to deal with those challenges because these things tend to catch us unaware, you know, anxiety, depression. You can't fully prepare for them, but you can build a toolkit to know how to address it when you feel that way. And there's a number of things that I do, but motion exercise. I got really into contrast therapy, cold plunging saunas, and social connection, intentionally seeking out. It's hard to build friends, you know, as you age, but getting yourself uncomfortable makes a big difference. Well, you've definitely made a big difference. You can tell in what you're doing in the last year, and you can tell how much you're enjoying it. So looking forward to the next ten years, oh at least twenty years, thirty years, be welcome back soon, Thank you always welcome of course. Nate check It's co founder and CEO of Ron joining us in studio. If you missed any of that conversation, be sure to check out our podcast feed and we'll be sure to highlight it to in our weekend So you are listening and watching Woodberg Radio

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