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1:15

Hello and welcome to The Briefing.

1:17

Coming to you live from Studio

1:19

One here at Nadori House in

1:21

London, I'm Vincent Macavini. Coming up

1:23

on today's programme. NATO's new Nordic

1:25

trio launched their first training exercise

1:27

in conjunction with the Alliance. Portuguese

1:30

politicians entered the final frantic

1:32

few days of campaigning ahead

1:35

of Sunday's elections. With

1:37

a far-right looming in the background, Portugal is

1:39

heading to the polls this Sunday. And what

1:41

has been described as the most decisive elections

1:43

in recent history will assess how the campaign

1:45

is going so far. With

1:48

Austria's ex-Chancellor Sebastian Kurtz serving

1:50

a suspended sentence after having

1:52

been found guilty of lying

1:54

to parliament, what next for

1:56

the country's politics? Sebastian

1:58

Kurtz was famous for the campaign. for

2:00

message control, every kind of interview,

2:02

every kind of output that you

2:05

had in any form and any

2:07

medium. So it's kind of fascinating

2:09

to see how this really slipped

2:12

away from him." Plus the

2:14

latest business news and a special look at

2:16

the fate of the department store in the

2:19

United States. All that right here

2:21

on the briefing with me, Vincent McEveenney. On

2:30

Sunday, a two-week NATO exercise,

2:32

Operation Nordic Response 2024 kicked

2:34

off, with

2:37

new members Finland and Sweden taking

2:39

part. Over 20,000 troops

2:42

are on exercise across northern Sweden,

2:44

Norway and Finland, with more than

2:46

50 ships and 200 planes involved.

2:49

Bruno Koffman is the Swiss

2:52

Broadcasting Company's global democracy correspondent.

2:54

Bruno, thank you for joining

2:56

us from Stockholm. Firstly, what

2:58

exactly will this exercise involve?

3:02

Yes, hello Vincent. Yes, this exercise is

3:04

basically you can say an extension

3:07

version of cold response which

3:09

has been done every year

3:11

in spring in northern Norway.

3:13

Norway has been a member

3:15

of NATO since 1949 and

3:17

now with Finland in NATO

3:19

and Sweden joining, this has

3:21

been extended to cold response.

3:24

This is now transnationally over

3:26

all of the area of

3:28

northern Scandinavia. This is a

3:31

geopolitically very important region

3:33

towards Russia. Here now

3:36

you can say the exercise is

3:38

about bringing in troops from the

3:41

west from northern America which has

3:43

been on the way for weeks

3:45

and now joining a Norwegian, Swedish

3:48

and Finnish troops, vessels,

3:50

airplanes to show how they

3:52

can cooperate in a way

3:54

of a response of a

3:56

collective defense exercise. northern

4:00

where they're doing this exercise, is

4:03

that a particular thing that they're

4:05

practicing? Arctic warfare, cold warfare? Sure.

4:08

I mean, when the temperatures are below minus

4:10

20, minus 30 degrees, you

4:12

have to do this in a

4:14

different way than you are in

4:17

spring weather or in summer weather.

4:19

So these troops are of course

4:21

specialists in these kind of very,

4:24

very harsh situations. Now

4:27

with Norway joining

4:29

hands with Finland and Sweden,

4:31

of course, the power

4:34

of this exercise is much bigger

4:36

than it has been until now. And

4:38

while Sweden and Finland have only just

4:41

joined the Alliance, did these three countries

4:43

already have sort of strong defence cooperation?

4:47

I would say yes and no. I

4:49

mean, no when it comes to Norway

4:51

and Sweden and

4:53

Finland, because this was really the

4:56

border of NATO to non-NATO land

4:58

for many, many years. On

5:00

the other side, Sweden and Finland have

5:02

in recent years really joined hands, had

5:04

a lot of collective treaties

5:07

to work together. And this was also

5:09

the reason for Sweden then, which initially

5:12

after the attack of Russia to Ukraine,

5:14

didn't want to join NATO. When

5:17

Finland decided to join NATO for

5:19

Sweden, this was the clear response

5:21

to also give in to

5:24

this issue and to be a

5:26

member of NATO, because Finland is

5:28

so crucial for Sweden. And so

5:30

now you can say for the

5:32

very, very first time in history,

5:35

all the Nordic countries are under

5:37

the same defence umbrella. And this

5:39

is truly historic because there has

5:41

been so many attempts after the

5:43

Second World War, again after the

5:45

Cold War, and now they are

5:47

together. And has there

5:49

been any increase in activity

5:51

along the Norway-Finland-Russia border at

5:53

all? In

5:56

fact, just a few minutes ago Reuters

5:58

had a note about the border. that

6:00

Russia was enforcing their forces

6:03

on the western border. This

6:05

is a follow-up to a

6:07

recent decision by President Vladimir

6:10

Putin to rearrange its commandos

6:12

on the west side by

6:15

establishing again the traditional forms

6:17

of commandos in Moscow and he

6:20

called also the Leningrad military district,

6:22

just observe the name. So this

6:24

response by Moscow is not surprising

6:27

and you can already, when you

6:29

are for instance on the

6:31

Norwegian border town of Kirkenes,

6:33

you can watch over to

6:36

Russia and there you hear

6:38

paramilitary groups exercising. So obviously

6:40

there is a response from

6:42

the east side. And

6:44

this exercise is part of a

6:46

wider NATO one running over several

6:48

months called Steadfast Defender. What are

6:51

we likely to see during that?

6:54

Yes, there is a huge amount

6:56

of exercises and maneurs now are

6:58

going on. It started already a

7:01

few months ago when the North

7:03

American forces departed towards the North

7:05

Atlantic and we will now more

7:07

and more see that this exercise

7:10

is moved to more the Baltic

7:12

Sea region, to the Baltic countries,

7:14

but also to continental Europe with

7:16

Poland as a main field. So

7:18

it's clear that NATO now wants

7:20

to show that their different

7:23

member states can cooperate, their

7:25

different forces can cooperate together,

7:27

that their commandos are working

7:30

and that their defence is

7:32

efficient vis-a-vis a very, very

7:35

aggressive Russia. And

7:38

looking at Sweden, a new member,

7:40

it's technically still not fully actually

7:42

in NATO although everything has finally

7:44

been approved. Is that affecting the

7:46

exercises in any particular way? Not

7:50

really, of course, because this has been

7:52

also going on for months and years

7:54

now that this cooperation has started, but

7:56

it's still, of course, formally the case

7:59

of the NATO. case that Sweden is

8:01

not part of this Article 5

8:04

reinsurance of NATO. So in this

8:06

moment, Sweden geopolitically is still in

8:08

a grey zone, even if now

8:10

all member states, all the other

8:12

31 member states have

8:14

ratified, but still there are some

8:16

formal steps and as we have

8:18

learned in recent months and years,

8:20

there can be technicalities, there can

8:23

be somebody really stopping something which

8:25

makes it difficult to really bring

8:27

the flag of Sweden up at

8:29

the NATO headquarters in Brussels. But at

8:31

this moment, of course, also in Sweden, everybody

8:33

expect that to happen in the days and

8:35

weeks to come. Bruno,

8:37

thank you. That was the Swiss

8:39

broadcasting company's Bruno Kaufman. Now here's

8:41

Sophie Monaghan-Kooms with today's other news

8:44

headlines. Thanks Vincent. Chinese

8:47

Premier Li Chang has announced an ambitious

8:49

5% growth target for

8:52

2024 and vowed to transform the nation's economy.

8:55

China also pledged a 7.2% increase in

8:58

defence spending and dropped preferences to

9:00

peaceful reunification with Taiwan at the

9:03

National People's Congress opening today. Americans

9:07

are heading to the polls in 15 states and

9:09

one territory today for Super Tuesday. Joe

9:12

Biden and Donald Trump are widely

9:14

expected to win the primary elections,

9:16

potentially sealing their respective party nominations

9:18

for president. The

9:21

European Commission is releasing its European Defence

9:23

Industrial Strategy, designed to boost

9:26

defence manufacturing across the block. Estonia,

9:29

France and Poland have all called on

9:31

Brussels to pledge large assumptions to help

9:33

re-endestinise the European defence base. And

9:37

American Airlines has ordered 260 new

9:39

aircraft from Airbus, Boeing and Embraer,

9:42

in one of the biggest plane orders in its history. America

9:45

now holds orders for 440 aircraft

9:48

in total, with options and purchase rights

9:50

for 193 more. Those

9:53

are the day's headlines. Back to you, Vincent. Thank

9:55

you, Sophie. On Sunday, voters in Portugal

9:57

go to the polls with a 5% increase in defence spending.

10:00

far-right candidate seemingly likely to win

10:02

on the 50th anniversary of the

10:04

end of Portugal's dictatorship. Joining me

10:06

now in the studio is Monaco

10:08

senior foreign correspondent Carlos Robello. Carlos,

10:11

what's brought about this election first?

10:14

Well, so we have to take a

10:16

step back. This is an early election

10:18

that was called after the collapse back

10:21

in November of Antonio Costa's socialist government.

10:24

The best way to simplify things

10:26

and explain what happened was there

10:28

was an ongoing investigation over

10:31

some members of his cabinet, not

10:34

implicating him directly, but the public

10:36

prosecutor put out a statement

10:38

basically saying that in some wiretapping, the

10:40

name of the prime minister had been

10:42

mentioned. So he said, well, if that

10:44

is the case, even though he wasn't charged or

10:46

anything or formally accused,

10:48

he said, if that's the case, obviously I

10:50

can't continue in this post because I think

10:52

the office of prime minister is

10:54

needs to be respected. So he stepped down

10:57

triggering this whole thing. In the meantime, it

10:59

has emerged that he was not involved. It

11:01

was a different name that was heard. So

11:04

it has opened an entire different conversation

11:06

about the fact that the

11:08

public prosecution's office could, in

11:11

this case, it brought down a

11:13

majority government for absolutely no reason. So

11:15

that's a broader conversation that's happening on

11:18

the sidelines of this about the power

11:20

and the separation between the

11:22

judicial and legislative arms of government.

11:24

I'm not sure that will have

11:27

sparked a few conspiracy theories as well. And

11:31

for listeners who may not be

11:33

aware, though, of the leading candidates

11:35

in this election, Andre Ventura and

11:37

his party, Chega, which is translated

11:39

as meaning enough, who is he

11:41

and what does this party stand for? Yes. So

11:44

Chega is a far right party in

11:46

Portugal, which has been around for

11:49

the past couple of elections, but

11:51

clearly gained traction as time has gone

11:54

by. It

11:57

is expected that he will double

11:59

the... the result it got

12:01

in 2022. So in 2022, SEGA had 7.2% of

12:03

the vote. It's tracking according to

12:08

the latest polls at 16%. And obviously,

12:10

that's fluctuating and changing. Now,

12:12

SEGA would an outright win,

12:15

but it would have a significant percentage

12:17

that it could become the kingmakers in

12:20

the election. The latest polling, which

12:23

came out just earlier this week,

12:25

puts the socialists and the coalition

12:27

on the right, the alternative of

12:29

the Democratica, Alianza Democratica on the

12:32

right in a technical tie. So

12:34

they're within 3% points of

12:36

difference, which is within that margin.

12:39

So in this scenario, SEGA

12:41

could become the kingmaker so that there could be

12:43

a government on

12:45

the right. Now, we know

12:47

that the socialists have been in power now for

12:50

a couple of years. There is fears

12:53

by analysts of what this

12:55

shift towards the right could mean

12:57

for the country. You know,

12:59

there's been an increase in the minimum

13:01

wage. There's been issues to deal with

13:03

the housing crisis that they've been trying

13:06

to tackle. Portugal really

13:08

has improved over the past

13:10

decade. And there is fears

13:13

of what this complete shift to the right might

13:15

mean. But as we know, when a party is in power

13:17

for too long, the change tends

13:19

to be drastic. It tends to swing from one

13:21

end of the political spectrum to the other. So

13:23

at the moment, everything is

13:25

kind of neck and neck for us to

13:27

be able to actually determine what's going to

13:30

happen on election day. And the Portuguese

13:32

people are heading to the polls on Sunday.

13:35

But we saw this past Sunday, what we

13:37

call the early voting,

13:39

which you can require and request

13:41

if you are not in

13:43

the country or not in your polling

13:45

area on the day of the election. And

13:47

it was the record number of it might

13:50

not sound like a lot, but 200,000 people

13:52

that showed up and requested that. And

13:54

we've never had that amount of people

13:56

requesting it. So there is high hopes

13:58

that the number of people voting

14:00

will also be quite high this time around.

14:02

And in terms of just

14:04

dividing into sort of the social policies and

14:07

the economic policies, I mean, how far right

14:09

are we talking? Where

14:11

is sort of Andrew Ventura, Andre

14:13

Ventura on the map of European politicians?

14:16

Well, he's quite

14:19

down with the far right spectrum. This

14:21

is a party that believes that

14:24

some of the freedoms enshrined in

14:26

constitution should be curtailed that

14:29

values religion, which is

14:31

something that has been separated from

14:33

the states for a long time. You

14:36

know, there's quite an interesting discourse happening

14:38

here because as you mentioned, Portugal is

14:40

celebrating 50 years of the fall of

14:43

the dictatorship this year on the 25th

14:45

of April. And

14:47

the prospect of Andreven to

14:50

Revealing in government has been

14:52

described as essentially not being

14:54

able to celebrate those 50 years fully because

14:56

it would be a return to a lot

14:58

of those, for lack

15:00

of better words, old school values

15:03

that were last seen during that

15:05

time. So we're talking about putting

15:07

family faith and

15:10

above all else. You

15:12

know, even from an animal rights point of

15:14

view, it's a party that supports wolf fighting,

15:17

which is something that we've been

15:19

trying to, in Portugal, curtail for the past

15:21

couple of years. It is a

15:23

tricky position and, you know, the

15:26

right wing candidates, not only on

15:28

the far right, but also on

15:30

the center right, seem to be

15:32

talking about perhaps having

15:35

a referendum on to ban

15:37

free abortion, which is something that

15:39

in Portugal has been legal for

15:41

nearly 20 years now. So a lot of- I'm assuming

15:43

when France is putting it in its constitution, that's the

15:45

conversation. Exactly. So there's a lot

15:47

of conversations about all these constitutional

15:50

rights that have been in the

15:52

Portuguese legislation for at least two

15:54

decades, that if this government with

15:57

the coalition of the far right goes in. There's

16:00

at least a serious case for

16:02

referendums or for debates to be

16:05

opened up over issues that in

16:07

the minds of a lot of

16:09

people had been settled long ago.

16:11

And as with every far-right party,

16:13

Shega is not an exception here by

16:16

having a quite strong anti-immigrant

16:19

rhetoric and sentiment. And

16:22

as you may know, in Portugal, one

16:25

of the things that the country

16:27

proud itself the most is

16:29

that after they followed the dictatorship, there

16:32

was an open-door policy to the former

16:34

Portuguese colonies that were

16:36

given independence to try to bolster

16:39

those bilateral ties. So it is

16:41

quite painful with the backdrop of

16:43

the celebration of the end of the dictatorship

16:45

to be talking about these issues now. And

16:48

turning to the other side, so the other

16:51

parties, particularly ones at the left, I mean,

16:53

why have they struggled so much? Not just

16:55

because obviously they've been in power for so

16:57

long, but also a particular issue with the

17:00

youth vote. Yes. So with

17:02

the youth vote, it is, has always

17:04

been difficult to capture. And there is quite

17:07

a sense that

17:09

this election's youth vote

17:12

could be determinant, particularly the youth

17:14

vote of the expats abroad. So

17:16

Portugal has had a brain drain.

17:19

The vast majority was forced to leave

17:21

under the Social Democrats,

17:24

so the center-right party. Of course, a

17:26

lot of people have left during the

17:28

Socialist Party too. And the

17:30

perception of what's happening back home really

17:32

does change when you think about, you

17:34

know, you being an immigrant in a

17:36

different country, forced leave because there was

17:39

no opportunity. This is the wake of

17:41

the 2008 crash. Exactly. So

17:43

there is quite a big number

17:45

of people that think that the

17:47

youth vote could really swing the

17:50

election. We need to remember that at least the

17:52

expat community only elects four MPs. So

17:55

it's not enough to make a decisive

17:57

change, but traditionally have always been the

17:59

same. party, so we might see some change

18:01

there. Carlotta Robello, thank you.

18:03

You're listening to the briefing on Monocle

18:05

Radio. You're

18:13

back with the briefing on Monocle Radio. Last

18:16

month, a court in Vienna found

18:18

Austria's ex-Chancellor Sebastian Kurtz guilty of

18:20

lying to Parliament about the appointment

18:22

of a former ally as head

18:24

of the state holding company, and

18:27

gave him an eight-month suspended sentence.

18:29

Even seen as the future of European

18:32

politics, he will appeal, but even if

18:34

he does and is acquitted, the chances

18:36

of him mounting a political comeback in

18:39

a general election later this year are

18:41

looking increasingly unlikely. So, with

18:43

the era of Kurtz now almost certainly

18:46

over, what does it mean for

18:48

Austrian political culture? Monocle's Alexei Korolev

18:50

in Vienna reports. Kurtz

19:00

faced constant accusations of cronyism and corruption

19:02

throughout his time in office. He

19:05

is now a convicted purchaser. But

19:07

in a national television interview soon after the verdict,

19:10

Kurtz was still maintaining that he had done nothing

19:13

wrong, that he had been singled out for punishment,

19:15

that he was the victim. It's true

19:18

there were some other politicians, also former

19:20

federal chancellors who were convicted, but

19:35

it is the first time that a

19:38

high politician is convicted because of

19:40

forced testimony at the

19:43

parliamentary committee. Robert

19:45

Kurtz is professor of criminal law at

19:48

the Vienna University of Economics and Business.

19:50

It's so new for

19:52

the Austrian politics that a

19:55

wrong saying of a politician

19:57

is a criminal.

19:59

criminal offense or is seen

20:01

as a criminal offense. For

20:04

Mr. Kutz, it was always

20:06

very important to have an

20:09

image of a smart politician who

20:11

always says the truth and this

20:14

is completely the opposite of what

20:16

we see. Sebastian Kutz,

20:18

he was famous for message

20:20

control, every kind of interview,

20:22

every kind of output

20:24

that you had in any form

20:26

and any medium. So it's

20:28

kind of fascinating to see how this really

20:31

slipped away from him. Felix

20:33

Haffner and Jennifer Weiss are founding members

20:35

of the Institute for Media, Politics and

20:37

Theatre, a Vienna-based collective of

20:39

playwrights and journalists. Its

20:42

latest project is a series of documentary plays

20:44

called I Am from Austria. Each

20:47

part is about a whole

20:49

different topic that we research. Yes,

20:52

so we have like five episodes

20:54

and the first one was about

20:56

corruption and this whole

20:58

Kutz era, also about

21:01

the recent process, of course. And that's really

21:03

important that they said now that he's guilty

21:06

because it's also a public

21:08

symbolic shame for him kind

21:10

of. And

21:12

Austria has been speculating about the

21:14

possible return of Sebastian Kutz. I

21:18

think there have been ideas around it because

21:21

there has been like a big episode

21:23

movie premiere around him and

21:25

other PR stunts that kind of led

21:27

to a sort of return of Sebastian

21:29

Kutz. So the biggest thing

21:31

about this verdict is that the possibility

21:33

of him coming back into the political

21:35

scene in Austria has become very small.

21:39

A political comeback may be off the cards, but

21:42

this isn't the last we'll be seeing of Sebastian

21:44

Kutz. He is still

21:46

under investigation for allegedly using public funds

21:48

to buy favourable media coverage, something

21:50

he denies. But there's another

21:52

thing. Now that he

21:54

has become living proof that lying has consequences,

21:57

will other Austrian politicians take the hint? Last

22:00

word to Professor Robert Catt. The

22:03

influence of criminal law is always

22:05

very limited and it

22:07

is especially limited in relation

22:09

to politicians because in

22:12

normal political life we

22:15

are used that politicians do

22:18

not say everything they know. In

22:21

principle I think it

22:23

could have the consequence that many

22:26

people will not say

22:28

anything before these parliamentary

22:31

committees. On the other hand

22:34

I always say in discussions

22:37

even if it does not work it

22:40

is important for democracy. For

22:43

Monaco and Vienna I am Alexei Korolev. Alexei

22:46

Korolev, thank you. You are listening to

22:48

the briefing on Monaco Radio. Time

23:04

now for a business update with

23:06

Bloomberg's Yuen Potts who joined us from

23:08

Dubai. Yuen, good to have you on

23:10

the show. China has set a

23:12

pretty ambitious growth target for 2024. Hello

23:16

Vincent, yes they set their economic growth target

23:18

at around 5% for this year. It's

23:21

about the same as last year which they just

23:23

about met assuming you trust the veracity of the

23:25

figures. Michael's

23:27

the figure ambitious this year. Chinese

23:31

Premier Li Qiang acknowledging the

23:33

challenges facing the economy. He

23:36

says it would be easy meeting the targets

23:38

and he says we need policy support and

23:40

joint efforts from all fronts. That's

23:42

the key point really. How much support

23:44

and government heft will be behind these

23:47

targets? Chinese stocks listed in Hong

23:50

Kong don't seem to have a

23:52

lot of faith in them. They sold off to stay investors.

23:54

I think a little bit disappointed at the lack of ambition

23:56

at the target but mostly they're concerned

23:58

about the lack of concrete measures. put

24:00

in place to boost growth in the

24:03

world's second largest economy. Remember Chinese economic

24:05

problems are many,

24:08

they have a problem with unemployment, particularly youth

24:10

unemployment and that hugely indebted property sector, something

24:12

which has been hanging over the economy for

24:14

years now, there's not really an easy solution

24:16

to that. A lot of companies teetering on

24:19

the edge of insolvency, loads of unfinished properties,

24:21

there's a lot of problems with people not

24:23

buying properties because they're worried about the property

24:25

market in China and that is a big

24:28

chunk of the economy and that is really

24:30

weighing on economic growth.

24:32

More growth is important for China because

24:35

it has ambitious plans, all sorts of

24:37

things, there's been of course enormous progress

24:39

in the Chinese economy over recent decades

24:41

but there are still lots of people

24:43

living on not very much money, the

24:45

Chinese government very keen to do

24:47

something about that. So Chinese growth is a

24:50

key metric for the government there and of course

24:52

they are very keen to get to this target

24:55

but I think investors want to see more being

24:57

done to actually get there. And

24:59

there's debate raging among investors about the

25:01

current buoyant state of global stock markets.

25:05

Yeah, are we in the midst of a

25:07

stock market bubble too? Very well-known

25:09

analysts come down on either side of

25:11

this debate. JP Morgan's chief market strategist

25:13

reckons that the dramatic rally in US

25:15

equities we've seen over the last few

25:17

months and Bitcoin's rapid surge above

25:19

$60,000 signal that

25:22

yes investors should be a bit worried

25:24

whereas Chief UK, Chief US

25:26

Exe Analyst at Goldman Sats is

25:29

amongst those who thinks that the risk on mood is

25:31

warranted arguing that big techs, lost

25:33

evaluations are supported by the fundamentals

25:36

put in plain English. It means that they're making lots

25:38

and lots of money therefore they're worth

25:40

a lot. It's all been driven of course by the

25:42

Magnificent Seven, this is the phrase that we've been talking

25:44

about a lot in the recent months, we're

25:47

even calling it the Mag Seven these days. Amazon,

25:49

Apple, Alphabet, the Google parent company,

25:52

Microsoft, the world's most valuable company,

25:54

the owner of Facebook and Instagram,

25:56

Meta, the chip maker, Nvidia and

25:58

Tesla although the latter. has had

26:00

a bit of a ropey patch over recent

26:02

months. So far, the financial

26:05

results are justifying the moves earnings

26:07

per share for these seven stocks has

26:09

risen combined 59% in

26:12

the latest quarter compared to a year ago.

26:14

That was handily beating the estimates that analysts

26:17

were penciling in. So far, these stocks over the

26:19

last year have risen by 80%. So

26:23

this has been an enormous rally in these tech stocks.

26:25

Some of the rest of the market has been doing

26:27

quite well as well. But so many of the aims

26:29

we've seen are driven just by these seven stocks. You

26:32

and Potts, thank you. You're listening to the briefing

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on Monocle Radio. Tune

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get your podcasts. Finally

27:25

today, we're heading to New York,

27:27

where Macy's has its flagship store

27:30

on Manhattan's Herald Square. The struggling

27:32

retail giant has recently announced the

27:34

closure of some 150

27:37

stores, with a plan to lean

27:39

into luxury and in-store experience. However,

27:41

the company shares surge yesterday on

27:43

news of a renewed takeover bid

27:46

from Arkhouse Management and Brigade Capital.

27:49

We're joined now by Jordan Holman,

27:51

New York Times business reporter covering

27:53

the retail industry. Jordan, thank you

27:55

for joining us. Macy's had some 650

27:57

locations, just five years

28:00

ago and this new round of

28:02

closures means its footprint has almost halved. What's

28:04

gone wrong with the company? Absolutely.

28:07

So this has been a years

28:10

long struggle for Macy's just trying to attract

28:12

a new shopper base that does want to

28:15

go to its large department stores in its

28:17

malls. They have increasingly

28:19

been struggling against this e-commerce world

28:21

that we find ourselves in and

28:23

so management has tried to shrink

28:25

the amount of stores it has

28:28

just focusing on its most

28:30

put traffic stores while closing the other

28:33

ones that are in diagonals. And

28:35

the new CEO Tony Spring has unveiled

28:37

what he's dubbed his bold new chapter

28:39

strategy to save the stores. What exactly

28:41

will this involve? Yeah,

28:44

so it involves the store closures. So they're

28:46

planning on closing 150 stores over three years.

28:50

So by the end of 2026, they would have about 350 stores, which is roughly half

28:52

the amount of

28:56

stores they had going into the pandemic. So

28:59

they're just trying to make the shopping

29:01

experience better at Macy's. You hear a

29:03

lot of people complain about messy stores,

29:06

not great merchandise, you can never find someone at

29:08

the fitting room or when it's time to check

29:10

out. And so Tony Spring has

29:13

said he's trying to increase staffing levels at

29:15

those areas around the fitting rooms and the

29:17

shoe department when you really do need staff

29:19

and also just making the stores look better.

29:22

So the plan is once they close the

29:24

stores, those 150 stores sell off that real estate, staff

29:28

will leave them money to reinvest in the

29:30

stores that they have remaining. And

29:33

speaking of real estate, why are these investment

29:35

firms after the company? Do they want to

29:37

keep it as a going concession or are

29:39

they just after its property portfolio? Yeah,

29:42

so our house management and brigade

29:45

capital management have been

29:47

really pressuring Macy's to turn around

29:49

its business since December. And so

29:51

when I shared it with our

29:53

house over the weekend, they

29:56

said they are interested in keeping

29:58

Macy's as a retailer. They

30:00

just want to have it take it private

30:02

so it kind of gets out of the

30:04

spotlight of the public markets. But they are

30:06

fascinated in the real estate. Macy's is the

30:08

largest department store in the US. It has

30:11

a massive footprint and they think that real

30:13

estate can actually be an asset. So when

30:15

they looked at Tony Spring's strategy of closing

30:17

stores, that's actually frightening to them. They want

30:19

to keep that large store base but they

30:21

think they can do a better job running it

30:23

as a retailer. And finally, we've

30:26

seen Sears and JC Penney fall

30:28

into bankruptcy and liquidation over recent

30:30

years. Is it over for the

30:33

department store model in the US or do

30:35

the hundreds of brands who have products in

30:37

them want to see them keep going? I

30:40

think a lot of people

30:43

think there is room for a department

30:45

store model. It just really has to

30:47

be responsive to younger shoppers, to having

30:49

a really strong e-commerce model because people

30:51

do like going to stores. The majority

30:54

of retail spending happens in

30:56

stores. What department stores need to figure

30:58

out is how to get people back

31:00

to the stores, how to make it

31:02

a fun experience again. And so that's

31:04

the struggle that Macy's is up against.

31:06

You mentioned those other stores went away

31:08

and so Macy's does have an opportunity

31:10

to capitalize on being one of the last

31:12

few department store chains left. Jordan,

31:15

thank you. That was Jordan Holman. And

31:17

that's all for this edition of The

31:19

Briefing. It was produced by Chris Chermack.

31:21

Our researcher was Neoma Ekway and our

31:23

studio manager was Steph Chungu. The briefing

31:25

is back tomorrow at the same time.

31:27

I'm Vincent McEvinney. Goodbye and thank you

31:29

for listening.