Transcribe your podcast

This is Nick, this is Jack, and this is Snax Daily, it is Wednesday, December 16. The Northeasterner Snackers better put on a Kaha beanie. You got snow coming your way. d'Orleans warming up. Some cool is over there, Jack. It's a Fratkin noise deck.


Let's hit our Thibeault. Why we got our best one yet. First story, Jack Planet Fitness survived the pandemic with a nice little strategy. Jack and Arcon. This the fruitfly strategy of customer service.


For our second story, Kate Spade and code shouldn't be selling high end handbags during the pandemic and yet their owner Tapestry has never been more profitable before. Our third and final story, Blade wants to get you from Manhattan to the Hamptons, from Manhattan, TED Nantucket, from Palm Beach to Aspen on a private helicopter.


I don't know, Jack. Feels like a good time to go public is back. What do you say?


That sounds apropos, but before we jump into that wonderful mix of stories, a wonderful mix today, by the way, Jack Snackers, you may be working from home.


You may be saving time on your commute. You know who's saving the most time on a commute?


Santa Claus, Santa saving the most time because, you know, sitting on Santa's lap to ask for Hot Wheels car, kind of a dangerous situation these days.


That big white beard isn't a CDC approved and ninety five mask Jack the oh ho ho ho.


That is a aerosol attack. If I've ever seen one.


An elf required to take my temperature before I and I would start crying. It is a freaky situation. Snackers Jaconi. I know it's a funny thing going on.


Mall Santas are zooming in literally and they are cashing in on their zoom calls.


The going rate for five minutes of Santa's lap time is forty nine dollars, but there's no lap time. It happens during a zoom. Hang out. Oh, and get this, Jack. Maybe you want to upgrade to the ninety nine dollar package you're going to get. The full Santa situation includes a holiday box in the mail. I had no idea Santa Claus had such billable hours. So Jack and I noticed this trend going on. We do have in snack style and also discovered when we went to Airbnb, Santa is having some fun putting out some experiences.


If you're Santa Claus, you can book your time on Airbnb and you just have to verify that you're Santa by clicking a link on Airbnb dotcom.


This is while there's a single link, Jack and I clicked it. You just fill out a Google form on Airbnb. Jack feels highly untechnical.


Well, they asked a security question to make sure we were Santa. We could not answer this one because we're not Santa. Before you can become Sandy must verify what is buddy the elves maiden name.


Santa Claus is dependent on eight of us.


He's got a standing desk. He's working from the North Pole.


Telecommuted, but Santa is getting serious money this year. Let's hit our three stories. You're tuned in this next day. He spoke to the lawyers and we got to get some legal out of the way about to hear Ray Giudice. They don't reflect the views of her family. It's all informational. Just so you know, we're not recommending any securities. Nope. It's not a research report or investment advice, not an offer of a sale of a security by next is digestible business news for you.


Some LLC member, Fagbug APC. For our first story, Jack Bizer tries. Can I phone a friend? Trick question.


Answer is Cavs Planet Fitness put on like a whole ton of muscle?


Jack and I noticed simply over the last five years this ultra low priced gym chain is still running in the covid marathon snackers Planet Fitness. You've seen the ads, a whole lot of purple. They have mastered the timeless art of watching yourself in the mirror as you pick up heavy things and then put those heavy things back down. Also known as weightlifting. Nick and I were connoisseur's after college of the bench and wall routine. Yeah, we still got our lacrosse and football college careers.


We're going to be a thing. By the way, roommates Timmy and Dave, we used to go to the what was it?


The New York Health and Racquet Club on 13th Street, off University Place, by the way, by the way, the bench and wall routine is bench pressing and then looking at the wall between sets. Although full disclosure, Tim is not a great spotter. He was on his phone half the time. Now we're about to tell you the story of magnificent, probably steroid assisted growth from Planet Fitness. Honestly, Facebook would love to see this kind of scaff.


Planet Fitness at the end of twenty fifteen only had six locations globally. Jack, what are we looking at today? Two thousand locations. After just five years of being a company, we're talking nine in the Greater Albany area, thirty in the greater Philadelphia area. Just to give you a sense of how everywhere Planet Fitness is, there are three in the Greater Brattleboro, Vermont area.


Honestly, Jack, they are testing the limits of the whole greater region terminology.


Consider this company is based in Hampton, New Hampshire, the only part of that state touching the Atlantic Ocean, and it is worth seven billion dollars.


The company ironic that it's worth half a lift, but here is what fascinated Jack and I about plant fitness. Lately, they've been using a strategy that Jack and I like to call being that of the fruit fly, basically be a nuisance to your customers, but not so much that your customers are actually going to do anything about, get swatted at, but not crushed.


Here's the thing. The gym memberships over Planet Fitness, they are so low in price you barely even see the ding to your credit card is. Ten dollars a month, that budget impact is so tiny, you're unlikely to cancel your Planet Fitness subscription even if you never go to the gym. Plus, add on to that, this little idea, if you want to quit Planta Fitness, they create so much friction, there's almost a fire. You may not cancel your subscription online or over the phone.


It must be installed.


Yep. Even if your neighborhood is in lockdown right now and you can't physically go to the gym, then you can't cancel. Sure. Mr. Kramer, you'd like to cancel. Just fax us a notarized letter written in Braille, please.


It's a delightfully infuriating policy. It caused quite a bit of hate, though, during March and April, when their gyms were closed, they kept charging their subscribers and their subscribers had no way of canceling. So Jack and I also noticed a strange situation going on with Planet Fitness. iStock First, let's look at a company called Town Sports Gyms, the owner of New York and Boston Sports Clubs. Their stock is down 90 percent. Meanwhile, a workout from home stock like peloton has quadrupled in the same period of time.


And even though you're probably not going to the gym because of the risk of covid Planet Fitness, his stock is at the same point right now as it was last year before the pandemic. So could planet fitness is painful cancellation policy be masking the reality of the demand for its product? In other words, Complan Planet Fitness, his business be doomed, but people haven't actually been able to cancel because covid has the gyms closed. So what's the takeaway for our buddies?


Over at Planet Fitness? Surviving covid-19 is a marathon, not a sprint for company snack.


As we all know, that guy is at the gym on the treadmill, running three straight miles and a half in the hallway where he's wheezing.


You're thinking about, like, calling the paramedics, but that guy, that's just the way he runs and he keeps going. He hangs out with the defibrillator. But that is planet fitness. Despite the huge hate that got built up in March and April when you couldn't cancel, it only lost 10 percent of its 15 and a half million subscribers.


It has 14 million subscribers still today, and the stock is still at its pre covid high for two big reasons, Nick. And I think, first of all, we mentioned Peloton before Pelton's popular, but honestly, it's only going in the highest income Americans right now. And even after covid, there's probably going to be huge, sustained demand for a gym that's only ten dollars a month. No. Two other gym chains that are typically rivals to Planet Fitness look at like Gold's Gym or twenty four hour fitness.


They've entered into bankruptcy over the last few months.


Even though Planet Fitness has lost one 1/2 million subscribers during the pandemic, they might gain millions more now that its competition is out of business. They're running a marathon, not a sprint.


For our second story, handbag maker Tapestry is honestly, it's the fashion surprise of twenty twenty. That's what it is.


That's because they figured out how to make out bargain items, their most profitable profit puppies. Now snap because you may not know tapestry, but you do know Kate Spade, Stuart Weitzman or you may know 70 percent of their business, which is Koch. According to a couple of our terms, the Kate Spade satchel is the little black dress of accessories.


Actually, that's what Jack and I think we've been saying for years. Snackers, you know, we're dumb.


You know, it doesn't pair well with sweat pants and Campbell's soup these days. Fancy handbags and high heels. Yeah, that's right. It's my Kate Spade. Stuart Weitzman coach. Their sales fell big last quarter for, you know, your usual quarantine reasons lately.


On the bright side, though, sales were one hundred ten million more than what Wall Street expected. The profit grew and the stock is back up to where it was before covid hit us. Jack and I were fascinated. So we jumped in, snatched out. Turns out Tapestry has a strange little secret going on. Tapestries outlet stores bring in more profit than their full price stores do. That's right. Snackers Kate Spade is pulling more money from the one hundred and twenty dollars rush cross body outlet bag than it is from the four hundred and eighty dollar Emerald shoulder back.


We were shocked. How can you make more money on something that 70 percent off then the thing that is zero percent off. If you go to the Koch outlet, you're not getting the insult back from the Koch store on Fifth Avenue that was shipped to the outlet store.


That's the dirty little secret, the stuff you see at the outlet stores. Yeah, it's not the stuff that used to be at the Fifth Avenue flagship store.


And you're not going to see that in the earnings reports. Jack and I had to jump in snack style to the annual report to see what was going on with the outlet situation.


This stuff you see in the outlet store is manufactured specifically for outlet stores only that they're term. They are literally making cheaper bags for the outlet stores at separate factories just for the outlet stores. That's the reason it says outlet below the coach logo on the tag, because they want to make sure it's clear that this isn't a Fifth Avenue coach bag. Honestly, Jack. And McDonald's was selling like quarter quality meat over at the McDowell stores. You think the FDA would get involved?


Look, I personally got burned by this from J. Crew factory. I know you mean their cotton is like tissue paper. I'm gonna say Jack via the plastics and the boxes are like charcuterie. They cut these things ridiculously.


So naturally, these bags come at a much lower cost to manufacture. So even though they're technically 70 percent off the full price, they can still make a good profit off that. But here's the kicker, snackers. Now the business over tapestry, half of their sales are coming from these outlet stores. And thanks to that boost in the more profitable part of the business, last quarter, the profit margin jumped by a whopping seven percentage points.


So, Jack, what's the takeaway for our buddies luxuriating over a tapestry? Customer segmentation is how you maximize revenue. Jack, remember the old the college discount movie tickets with the old college at 15 bucks for your parents.


But if you go to college today, you can watch this Marvel flick for only 10 bucks. J. Crew, I'm keeping that brown Universiade for life. Thank you. 10 percent off. Everybody knows we'll Tapestry has basically found a way to do that with their full price stores and their outlet stores. So their full price stores are the high end, the high price customers. That is a statement by when you walk out with the coach bag in the coach bag, outlet stores are not saving buys.


Those are for the young bargain hunters who want steel. But here is the fascinating thing. According to the company, there's only five percent overlap between the outlet shoppers and its full price shoppers. That means the full priced customers, they're not price comparing with the outlet stores. They may not even notice that there's a discount cheaper version of their coach bag and they just keep on paying full price like they always used to because they don't notice. And last quarter, thanks to outlet stores moving online for the first time, Tapestry added three hundred thousand new GenZE customers at the outlet stores.


So Tapestries found a way to offer the college discount without calling it the college discount. They call it the outlets.


For our third and final story, Blade is the Uber for helicopters. It's going public via spec. They're focused crucially on the upward arm of the K shaped recovery. Now, snackers, here's the key here. When you get from Manhattan to JFK, it's it's like an odyssey. You can actually read the book The Odyssey on that trip to JFK. It's tough. Through the Midtown Tunnel, I traveled from the east village of New York to Vinyl Haven, Maine.


I walked on the sidewalk, took the subway, took the Long Island Railroad, took the air train, took a plane, took a bus, took a ferry, walked.


I think it was a bike in there. You get the terminal for the Delta terminal at JFK. Honestly, you need a Sherpa to get past eight thirty. It was quite a schlep. And traveling really can be. But here's the big question, Jack. Would you pay two hundred and ninety five dollars to make that whole journey a five minute today?


Probably back then, probably not, because I was broke. Enter a company founded in twenty fourteen by a Sony executive who likes Montauk and really liked Uber logo. Yeah, Blade's app looks just like Uber app. And this company will get you from Manhattan Island to the Hamptons for eight hundred dollars in helicopters. And the way Jack and I like to think about this, it's basically last mile delivery of wealthy people. Exactly. That's why they also offer a chopper ad to Nantucket, private jet from the Denver airport to Aspen or a seaplane to get you from Key West to Miami.


Now, the best part about this is that the investors and blamed for this back there, ironically, the clients ablate who are using it every week.


For these people, time is the only resource they care about. Time is money. So they'll drop eight hundred dollars to avoid the Long Island Expressway. We're talking Barry Diller from IAC or I Heart Media is Robert Pittman.


They're splurging on this company or Discover is David Zasloff or the famous media mogul David Geffen. But here's the funny thing about Blade. Blade was actually the first ever Zaken Jack and I noticed and it was before we ever had this podcast like ten years ago. Not only does Blade's app look just like Uber and so does their bread. Yes, it does. They also don't own the actual gear like the helicopters in this case. Now, Blade just does the app and the infrastructure to connect you with the helicopter.


And honestly, like, perfect timing for them because Uber just sold off its air taxi business so it could focus on its core personal issues. Uber is retreating from helicopters just as Blade is advancing.


So there is another way, that blade trying to differentiate from Uber, and this is with their lounges.


If you've ever bike down the West Side highway bike path next to the Hudson River, which is a great experience, you've seen the helipad at Thirty Third Street.


Those are blade helicopters heading to the Hamptons and heading to JFK. And if you pass security and are able to actually get into one of those, apparently they're going to make sure that your hot tower is actually hot. It's better than the Delta Lounge. Or what Jack and I find interesting here is that the private equity firm that's behind this back that is acquiring blade so it can become public, happens to also own some aviation company.


So it's a strategic investor. It can help blade with airplane maintenance, helicopter expansion and figuring out, like, how to open those big hangar doors. So, Jack, what's the takeaway for our buddies with the big hangar doors over at Blade in a k shaped recovery like we have right now, companies must play to the extremes.


So snackers, here's how the recovery goes down economically. Some are emerging financially from this pandemic better than ever, but some are merging worse.


For those who are better off right now, Blade fits perfectly with their post pandemic travel needs. Here they are. It's like domestic. It gets short distance, it's pampered, it's away from the crowds. These are the core demands of the twenty twenty one fancy flier. Now, just like tessanne uber blade could technically go down market and could start offering a cheaper version of itself, like a Blade X situation or a blade pool. Will you take a nine minute helicopter ride to LaGuardia with five other random people in your helicopter?


Either way, in a case shaped recovery, you got to focus on one of the extremes.


Blade is focused on last mile delivery of wealthy people, Jack, and you'll whip up the takeaways for us over the planet. Fitness has front squandered its stock back to its. It's a ridiculous cancellation policy that basically pulled down our move, broke our Las Vegas story.


Tapestry often makes more money on the hundred dollar discount versions of their handbags than the five hundred dollar full price once its customer segmentation. That is how Tapestry is offering the college discount without calling it a discount. For our third and final story, Blade is going public through the back door to the stock markets known as Backes, and it's focusing on just that upper case shaped element of the recovery.


Last mile delivery of wealthy humans. A time for our snack that today. This one comes in from Ali in Akron, Ohio. Also kind of a correction clarification. Well, ACRON, first of all, is known as the Rubber City. And I hope she doesn't issue a correction for that because I'm not 100 percent confident in that nickname. The rare snack fact within the snack factory. We mentioned last week that only forty nine percent of a bag of chips is actually chips.


The rest is air, but the air in those chip bags isn't actually er according to Ali, it is nitrogen that extends the shelf life and preserves the food.


Makes you think twice when you pop open the bag and enjoy the smell.


Another snacker let us know on Twitter that that er also serves as a cushion so the chips don't get crushed. So don't get angry at the er, be appreciative of the nitrogen snackers.


You looked fantastic today, but what Jack and I would love is if you could share your snacks h y y sd that's all you need to know. Slack your coworkers. Have you had your snacks daily. We'll see you tomorrow if you know. You know. And before we go, big congrats to carry over in Westlake Village. She just got a new job. And we just want to show some appreciation for Adelaide, who is one month old and has listened to every episode, every day of her life.


Honestly, no one else can say that. Oh, and Mary Ann Meyers, happy birthday. Turning eighty nine and lovely Martinsville, Virginia. And happy birthday to Ronit Weinberg in Scarsdale, New York. And Jacob was failand in Kiel, Wisconsin, and Courtney Cavalo in Houston, Texas. And Michael Rechter in Palo Alto and Terrace Malashenko in San Mateo, California. And Sierra Williamson and Sherburn, Minnesota. And Nathan Raab in Dublin, Ohio. And Chris Tongue in San Diego.


And Yusheng Shia and Chino Hills, California. And Falak and Farhan, congrats on the anniversary down in Austin and happy anniversary to Samarth Madden and Bhakta in Sunnyvale, California. This is Jack, Nick and I both own stock of Airbnb and I own Stock of Blade, the Robinhood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets Inc or any of its subsidiaries or affiliates.


The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC member, FINRA, SIPC.