Luxury Brands Are Losing Their Luster & No Online Dating for Olympians?

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0:29Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, what do LVMH and Taylor Swift have in common? They both have champagne problems. Then, scientists have discovered rocks that can produce oxygen with no light deep on the ocean floor. Uh, what? It's Thursday, July 25th. Let's ride.

0:53On yesterday's show, you heard about a couple of business battles, and here is your update. First, in the bidding war between TNT and Amazon for the NBA's media rights, the$2 trillion tech company won out. The league said it accepted Amazon's offer over TNT's to stream its games, leaving TNT fuming and with plans to sue the NBA. The other business battle is the one between me and Toby over who could sell more Morning Brew Daily t-shirts with their discount code. Maybe we just stop this intro here. No, no, no. Let's keep going. So as of now, I have built a commanding lead with many of you using code NEAL20, that's N-E-A-L-20, to get 20 % off our new retro t-shirts.

1:36But we're only in the first inning because this contest goes through next Wednesday. So head to shop.morningbrew.com and please, please use code TOBY20. Personally, I think Neil is up to a little funny business. He's juicing the numbers with family members, friends, ex-girlfriends. but you all are my family MVD listeners. So let's come together and please defeat Neil 20. Up next, a word from our sponsor, Beehive. Okay, Neil, I want you to take a walk down memory lane this morning. If you think back to the early days of Morning Brew, when it was just a newsletter, when did it start to feel like you were gaining some momentum?

2:11Easy, it was when we rolled out the referral program. So before we had relied on ads and word of mouth to grow, but when we built this referral program, it truly took things to another level. Before I worked here, when I was just young Toby and a big fan of the newsletter, I was obsessed with getting referrals because I wanted that Brew swag you guys were offering. And you were not alone. And you know who built it? Well, it was Tyler Dank, the founder of Beehive. And he's since taken what he learned from the powerful referral machine at the Brew and democratized it for everyone at Beehive. Now with a few clicks, you can spin up a referral program of your own.

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3:22New residential customers only. Taxes and fees extra and subject to change. Most reliable Wi-Fi based on OpenSignal Awards USA. Fixed broadband experience report, August 2024. The vibes are not good for rich shoppers right now, which means the vibes are especially bad for the world's largest luxury group, LVMH. The owner of Louis Vuitton and Dior reported a measly 1 % sales increase in the second fiscal quarter, which, outside of the pandemic, is its lowest level of growth since 2009. Sales growth for fashion and leather goods, which is typically the MVP of LVMH's expansive portfolio, came in at just half what analysts had been expecting.

3:59The main culprit for the slowdown? Asia. LVMH's CFO cited a violent swing among Chinese consumers who have turned to shopping in Japan rather than buying luxury goods locally. A historically weak yen has made the overseas trip worth it. As such, sales in Asia, excluding Japan, fell 14 % the second quarter from the same period a year earlier, while sales in Japan jumped 57 % year over year. Neil, the weak yen and some slowing demand worldwide is giving the luxury conglomerate a serious hangover. Yeah, it's not just Asia. The company also cited middle class consumers in the United States for maybe avoiding those aspirational purchases that they made over the course of the pandemic.

4:43Remember, LVMH and other luxury goods companies saw a huge spike in demand in sales in 2021 and 2022. When people had all of those pandemic savings, they were splurging on luxury goods. And now it seems to have backed off as the Fed has raised interest rates and inflation is biting. It seems like the companies that are focused on the very high end of the spectrum, you know, the ones selling private jets or the$10 ,000 Hermes bags, those are doing perfectly fine. It's just the companies trying to target the middle class consumer hoping for that aspirational purchase are not doing well. Right. And comparisons will get easier because, yeah, the period a year ago is when people were conducting revenge spending, as it was labeled, where you're coming out and you just want to spend a lot of the money that you'd built up over the pandemic.

5:31So maybe it's just that they're comparing it to a really great quarter. And then also, you're totally right. It's the brands like Burberry has really been struggling recently because it's kind of in that messy middle that we talk about. It's not on the upper end of the spectrum. It's targeting more middle class people that have been feeling pressure from inflation, from lots of different areas of the economy. So they're kind of just stuck not spending on those discretionary items anymore. Also, there's just a brand refresh going on at Burberry. There's a brand refresh going on at Gucci as well that is kind of missing consumers a little bit.

6:06So a lot of issues in the middle of their portfolio. But again, LVMH is just so widespread. spread. And so it's usually a good bellwether for the entire industry. So usually they can offset it through multiple ends of the spectrum. Yeah, they have more than 75 companies. They're the largest company in France. At one point, they were the largest company in Europe. I do want to focus on one particular segment that they said is doing really poorly, and that is champagne. So they own Dom Perignon and a bunch of other champagne brands. The CFO said that they sold 15 % fewer champagne bottles in the first half of the year.

6:41And you're probably wondering why are people buying less champagne? Is it because they're sad? And the reason is, yes, that's exactly what he said. He said champagne is linked with celebration, happiness, et cetera. And maybe the current global situation, the geopolitics, the macroeconomic atmosphere is just not leading people to cheer up and open bottles of champagne. So yes, it does seem like people's vibes do directly link with sales of champagne it's going in the wrong direction spirit sales is directly linked to how people's spirits are who would have thought one thing that could turn the ship around is that the lvmh is investing very heavily in some sponsorships they are spending over 160 million dollars to become a major sponsor for the paris olympics the olympic torch has been being passed around in the louis vuitton trunk and then athletes will be awarded medals designed by a ruler within their portfolio as well.

7:34So it's another big, bold sports push. Their biggest and boldest sports push, though, is that they want to take over from Rolex to become a sponsor of Formula One. So they still are spending, they're still investing in the top end. They want to get in front of luxury spenders. So maybe with the Olympics rolling around, people will be popping bottles soon here shortly. For anyone looking for love at all the right places, you could be in for a rude awakening this summer. Grindr, the gay dating app, has blocked people from changing their location settings to swipe on athletes staying in the Olympic Village at this year's Paris Games.

8:06First discovered by users on X, then verified by the publication Futurism, you can search for French hunks in the surrounding neighborhoods to the Olympic Village, but get stonewalled when you try to target the Olympians themselves. It's almost a tradition at this point for endeavoring Casanovas to try and swipe their way into an athletic hookup when the Olympics roll into town. At the 2021 Tokyo Games, Various TikToks went viral of people putting their Tinder gold subscriptions to work to look for some gold medalists. But after a reporter outed a bunch of athletes at the 2016 Games in Rio, it looks like Grindr is taking more precautions to protect their users' privacy this time around.

8:46Neil, trying to swipe on Olympians takes gold digging to another level. Is that the first time French hunks has been used in Morning Bird Daily? Probably, yes. So the representative from the organizing committee behind the Olympics said in a statement that dating apps, most of them are accessible to athletes within the village. But then kind of alluded to what Grindr was doing, saying for some geolocation has been deactivated by the app publisher. Grindr did this, too, in the 2022 Olympics because of those privacy concerns after what they did in 2016. This Daily Beast reporter did out some of these athletes.

9:22And it's very sensitive because many come from places where homosexuality is criminalized and there are a lot of anti-gay laws. So it can be very dangerous for these people. So Grindr seems like it's a little separate from the Tinders and the other dating apps of the world in terms of protecting users' privacy. But there is nothing as horny as the Olympic Village. Dating apps just go skyrocket in use when these Olympics happens. I mean, in 2018, a Tinder spokesperson said there was an 1 ,800 % increase in Tinder users passporting themselves into the Olympic Village. And then Grindr crashed within a few hours upon the start of the London 2012 Olympics.

10:04So something about the Olympic Village gets the people going. Well, there's absolutely no secret whatsoever that hookups happen, mainly from word of mouth from the athletes themselves, but also you're housing young, you're fit people who are participating in these very high stakes, very adrenaline-filled things, so it doesn't exactly take rocket science to figure out why that happens. Remember back to Tokyo, though, too, because this was right on the heels of the pandemic, still in the pandemic, so these so-called anti-sex cardboard beds were going viral. Tokyo said that they were anti-intimacy plans because they didn't want to pass the spread of that.

10:39This year, the cardboard beds are back, but Tom Daly, who is a diver for Team GB, did go to great lengths to show that they are rather sturdy, and he was kind of showing that they aren't as anti-sex as maybe the Tokyo ones were. But the athletes are going to have the best time at the Olympics are definitely the surfers because the surfing is taking place in the French island of Tahiti, which is 10 ,000 miles away from the rest of the action. But they're putting up the surfers on a cruise ship and they took them. Some athletes have been taking a tour of it and showing that they have this beautiful view.

11:12They have full-size beds. So that cruise ship is where people are going to have the most fun. All right, we're moving from French hunks to information technology. We now know how much the global IT outage caused by the botched CrowdStrike update will cost companies$5.4 billion, according to an insurance estimate yesterday. Just think about that. $5.4 billion because of some bad code that shut down Windows computers for just over an hour, and that's excluding Microsoft. So how is the cybersecurity firm showing remorse? Well, CrowdStrike's execs have apologized profusely over the past couple of days, but they also tried to make amends another way.

11:52Discount pad tie. According to TechCrunch, CrowdStrike sent its partners a$10 Uber Eats gift card for their troubles. The gift card was accompanied by an email that acknowledged, quote, the additional work that the July 19th incident caused and offered apologies for the inconvenience. And it's not even a joke. The email literally said, apologies for the inconvenience. It may have realized how cringy this looked because TechCrunch checked the voucher and saw a message that said it was no longer valid. Toby, from my vantage point, CrowdStrike's crisis communication strategy has been pretty solid after this outage.

12:26May have lost some PR points with this gift card ploy. What were they thinking? $10 gift card to Uber Eats is worse than no gift card whatsoever. And yeah, it was just very funny that people are going to redeem the offer and it wasn't working. They did say that it was because Uber flagged a spam because so many people were trying to redeem it at the same time. I think my biggest takeaway here is that you do have to nail like the emotional response as well as the actual. They did very well from a technical perspective. I tried to read through their blog posts explaining what went down. It's very difficult for me as a non-IT person to understand the specifics of it.

13:03But I think that they communicated that very well. but people are still saying like it feels a little too impersonal, like the apology himself. It did send me down the rabbit hole of other corporate mess ups and then responses to those mess ups. And the best one I found that in 2018, KFC, the chicken chain, ran out of chicken in the UK. So they had to shut down the restaurants and to apologize to their customers. They took out multiple full page ads in London newspapers with a picture of their bucket with the label rearranged to say FCK, which I think you can figure out what they were saying there.

13:39And then with an explanation there and people said, all right, KFC, we forgive you. You, you poked a little fun at yourself. So I do think you have to have a lot of awareness and really nail your corporate comms in a$10 Uber Eats gift card is not that. It's not that I think overall, they have been doing a good job. And I actually, I did read for the blog post and I do understand what happened. This was the most detailed explanation yet of what happened. So they sent out this update, right, that had bad code and that shut down Windows computers. What happened was when they send the update first through a verification system, basically a filter that gives it the green light to go ahead and send it out to computers, or they say this has some buggy code, that verification system was not working or it just didn't flag the code.

14:20So that's why it got sent out. So they are taking a look at that filtration verification system and fixing that. And they also said moving forward, we're never going to send out an update to a bunch of computers at once, which is what experts said at the time of the outage, said you should never do this. So they're going to start small. With any update, they're going to start small, see if there's any problems, and then once they figure out that there are no problems, they'll send it out to a wider bunch of computers so they are taking steps. Don't send a$10 gift card to somebody. Uber Eats, too.

14:51I mean, it basically just covers the delivery fee and all the other fees, and then you can still get$2 off of your pizza. You can get some Pad Thai. Up next, truly the best time of my week, hopefully yours as well. It's time for Neil's Numbers.

15:29milligram per two milliliter injection is a prescription medicine used to treat adults and children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema. Also called atopic dermatitis that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies. EbGliss can be used with or without topical corticosteroids. Don't use if you're allergic to EbGliss. Allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with EbGliss.

15:57Before starting EPCLIS. Tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about EPCLIS and visit ePCLIS.lily.com or call 1-800-LILY-RX or 1-800-545-5979. Tuesday on NBC, Jimmy Fallon and Bozema St. John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you.

16:33Make the best idea win! On brand with Jimmy Fallon. Series premiere Tuesday on NBC. Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will make you sweat. And I mean that literally because my first number is that on Sunday, the Earth had its warmest day on record, according to Europe's Copernicus Climate Change service. The daily global average temperature hit 62.76 degrees Fahrenheit or 17.09 Celsius, which was slightly higher than the previous record set last July. But there was no time to celebrate with a ceremonial cold plunge because the next day, Monday, topped the record set on Sunday with a temperature of 62.87 degrees Fahrenheit.

17:15The director of Copernicus said, we are now in truly uncharted territory. And as the climate keeps warming, we are bound to see new records being broken in future months and years. Side note, these are the hottest days on record, but we've only been keeping solid records since 1940. Scientists estimate that more than 100 ,000 years ago, before the last ice age, temps were as hot as they are now, and you just have to hope those cavemen knew how to install a window unit. But that's not to discount the alarming trend we are seeing right now. Scientists attribute the record heat to a number of factors, including human-induced climate change, volcanic eruptions that deposit particles in the atmosphere, and they switch in fuels used by cargo ships.

17:54More than 1 ,600 places across the globe tied or broke heat records in the past seven days, so you're not imagining it. It is just very, very hot all over the planet right now. Another thing that kicked us kind of into uncharted territory is the fact that the Antarctic winter has been a lot warmer than usual, around 10 to 18 degrees Fahrenheit, warmer than usual. Same thing happened last year, which was why we had record temperatures last year. And then the final weather note to add as well is that El Nino, which is a temporary warming of the Pacific Ocean that causes kind of the crazy weather we've seen worldwide over the last year.

18:29That ended, came to an end earlier this year. And then a more cooling La Nina is forecasted. But still, all these factors together is why we're seeing records being set and then records being broken literally 24 hours later. We got to get you a green screen. You're pretty good at that. I can't pronounce those niche towns names in Philadelphia, though, so I'm out on that. All right. For my second number, Cuba is emptying out at a rate it's never seen before. New data shows that over 10 % of its population left the island between 2022 and 2023, more than 1 million people in the span of two years.

19:06It's being called the largest exodus of people in Cuba's history. Experts on the ground say the general feeling among Cubans is one of hopelessness. The economy has taken a plunge due to sanctions imposed by the Trump administration and the drying up of tourists during the pandemic. But the socialist authoritarian government shoulders much of the blame. It doesn't tolerate dissent and it's failed to address shortages of basic products like food and medicine for the population. People are so desperate to leave that they sold everything, including their house, just to buy a one way ticket off the island.

19:38So where are they going? Well, most eventually want to get to the US, Canada or Mexico, but their long journey typically starts in Nicaragua. An average of 50 charter flights departed Havana for Nicaragua every month between January and October 2023, bringing 100 ,000 people to start their quest for a better life. Yeah, and some numbers, some people are saying that these numbers are actually conservative estimate. One million people is only 10%. Some papers had it at 18%. The birth and the death rate have been trending in opposite directions. Food production has also been a major issue for a lot of people living there.

20:14The country produced just 15 ,200 tons of beef in the first six months of this year. If you compare that to 1989, they produced 289 ,000 tons of beef. So it's just truly a lot of things are kind of falling out from underneath Cuban citizens right now. And obviously the government and the regime that they're under has a lot to do with that. Yeah, I mean, there's predictions from the U.N. that this population could go from 11 million a few years ago to just 6 million, almost having by 2100. So a true demographic crisis going on there. For my final number, two words, cocaine sharks. Imagine how much scarier the shark from Jaws would be if it were also talking really fast.

20:56And you've got the real-life situation off the coast of Rio de Janeiro, where 13 Brazilian sharp-nosed sharks tested positive for high levels of cocaine in their muscles and livers. And by high levels, I mean the concentrations were up to 100 times higher than cocaine levels found in other aquatic creatures. So how'd this cocaine get into the shark system? Experts say the main source is coke-laced excrement from users making its way into the oceans. Other explanations could include illegal labs where the drug is produced or packs of cocaine being dumped by traffickers at sea. And despite this news sounding like the plot of the cocaine bear sequel, and it probably will be one day, it's very important scientifically.

21:36The scientists behind the study say they were, quote, dumbfounded and excited in a bad way. After all, this is the first time cocaine has been found in any top predator. Yeah, I think cocaine here is a bit of a, I don't want to say marketing play, but they're saying that cocaine gets people interested. Obviously, cocaine sharks is going to grab headlines, but what they do really want to bring attention to is that there are a lot of other chemicals entering our ecosystem and filtering their way into these animals as way. I mean, sunscreen, insecticides, fertilizers, these are all things that are also entering the waterway.

22:09So, of course, finding cocaine in 13 apex predators makes for a great headline. But they do want to just point to the larger problem of pollutants entering these natural habitats. There are so many drugs and pollutants that have gotten into the water and they get into aquatic creatures. In 2021, there was a study that found that trout can be addicted to meth. Are you surprised? And then in 2019, researchers in the UK found they found illicit drugs, pharmaceuticals and pesticides in freshwater shrimp. And then in a study of the mussels in the Puget Sound, they found that these mussels tested positive for opioids.

22:45So there are a lot of stuff and drugs that people are taking that are finding their way into the oceans. And we're just starting to learn when aquatic creatures get those in their systems, what happens to them. And if you're wondering what happens to sharks when they are on cocaine, researchers don't know exactly yet, but they assume that it's very similar to what happens in humans. This movie is going to be absolutely awful. I can tell you that. It is my great honor today to contribute to Neil's numbers with a Toby Talley of my own. So I just want to thank you for the opportunity first and foremost.

23:17But yes, my Toby's Talley today is$20 billion, which is how much Apple has spent to produce its original TV shows and movies that not that many people watch. Despite its massive spending spree, Apple TV Plus accounts for just 0.2 % of TV viewing in the U.S. Netflix generates more viewing in one day than Apple TV Plus does in one month. Even for a company that has borderline unlimited resources, the math just isn't adding up when you're spending$20 million for results like those. Yeah, Apple is spending just more than$50 million on the cast alone to the morning show. They've been free spending as much as any other company on TV and on their shows.

24:02But again, like no one is watching, but that seems OK because Apple does have unlimited money. At this point, it does seem like they're reining it in a little bit. They are not pursuing projects that they would have in the past because no one really knows what Apple TV or Apple TV Plus really is and what it's for. I mean, the end goal is to ultimately sell iPhones. That's what this company is all about. So it did seem like a weird segue into media for this company. The shows have been great. I mean, I love Severance. there have been, you know, Ted Lasso was maybe the only one that broke through to the wider Zeitgeist.