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First Move with Julia Chatterley
The White House Talks to Russia after the JBS Hack Attack; Amazon, the Tech Giant Ends Cannabis Testing after Revising Workplace Policy; Equinox's CEO Discusses the Future of Fitness. Aired 9-9:45a ET
Aired June 02, 2021 - 09:00 ET
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JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Meaty manipulation. The White House talks to Russia after the JBS hack attack.
Amazon dot bong. The tech giant ends cannabis testing after revising workplace policy.
And gym gyrations. Equinox's CEO discusses the future of fitness.
It's Wednesday. Let's make a move.
Welcome once again to FIRST MOVE. Coming up on today's show, the latest on the global hamburger hacking. Popular Reddit names like AMC once again send
short sellers packing and more factories warn that labor is lacking, and we're lacking conviction, too on Wall Street it seems after a pretty muted
session on Tuesday.
Europe still holding near record highs and Asia, as you can see, a bit of a mixed performance and weakness across the Hang Seng and Shanghai Composite
there in China. Not surprising, I think in tone ahead of Friday's monthly U.S. jobs report that will give us a sense of those hiring challenges that
firms are facing.
Tuesday's U.S. manufacturing data was strong and orders robust, but labor and part shortages are leading to the longest wait times for delivery since
the 1970s. Yes, you heard me right, meaning that the U.S. Chamber of Commerce is now demanding the jobs jumble be addressed, calling the lack of
labor one of the most serious threats for business today.
Cue -- a cannabis concession from Amazon. Workers will no longer face pre- employment drug testing, among other changes. We'll discuss very shortly.
And no reprieve for Amazon deliveries or any other driver for that matter as U.S. gasoline prices hit their highest level in seven years, too. That
OPEC Plus decision to only gradually boost production fueling further gains today, as you can see, and prices could rise even further if inventories
Brent crude above $70.00 a barrel. It is a busy day. As always, let's get to the drivers from pot to productivity.
Amazon making a couple of major announcements, it is now saying that it supports the legalization of marijuana in the United States and it won't
include it in drug tests for new staff. It is also revising its controversial policy around break times.
Clare Sebastian has been poring over all the details here. Clare, there must be a labor shortage, she says, tongue in cheek, not really. Talk us
through the details.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: And yes, Julia, certainly, Amazon has hired a lot of people in the past year and we've had a lot of
attention on their workplace policies. And actually, they've made quite a few changes in the last year. But this is following on from Jeff Bezos's
sort of announcement in his shareholder letter in April that he wants to not only be Earth's most customer-centric company, but he wants to be
Earth's best employer and Earth's safest place to work.
So that is why they are revising this controversial policy called time off task, which is a way of measuring the time that each employee in the
warehouse spends not logged on to the software they use for that specific task, be it picking, packing, or all kinds of different jobs in the
They said Dave Clark, he's the CEO of Consumer Worldwide for Amazon. He said in a blog post that the original sort of motivation behind that policy
was not to surveil or pile pressure on employees, as has been, you know, widely reported. But it was to sort of identify problems with the software
and enable managers to sort of step in before they get worse.
So he said they're going to continue with this policy, but they're revising the amount of time over which they average it out. He didn't say how long
that amount of time would be. And he said that they're going to sort of change the way they have conversations around it and focus them more on how
we can help.
So sort of small tweaks, small changes, but certainly a recognition of how controversial that policy is, and as you said, as well, the second thing is
that they are now going to support the Federal decriminalization of marijuana. They won't require it to be part of the pre-employment drug test
for employees for most jobs, and they are supporting the More Act that's now in the House of Representatives that would decriminalize marijuana on a
Federal level they say because of the momentum in state laws around this.
CHATTERLEY: Yes, it's going to be treated the same as alcohol for those guys. So it still applies, I guess, if you're in the workplace, you can't
be high as a kite or drunk on alcohol for example. So there are some restrictions, but you're not going to be penalized trying to get the job in
the first place.
What about -- and you said this -- it being a safe workplace because there is some data now that's comparing how safe you are working in an Amazon
warehouse relative to other warehouses owned by other businesses. What does that data tell us -- Clare.
SEBASTIAN: Right. There's a report out this week, Julia, from the Strategic Organizing Center, which is a coalition of four major labor
unions here in the U.S., and they've analyzed data from OSHA, which is the Occupational Safety and Health Administration, where we're big employers
are required to report workplace injuries, and they say that Amazon is sort of an outlier when it comes to the warehouse industry, that they're seeing
a fairly statistically significant sort of increase in injuries at Amazon warehouses compared to other places.
For example, in 2020, which was actually lower than the previous three years, which they analyzed because of COVID related safety improvements.
They said that in that year, 6.5 injuries per hundred Amazon warehouses compared to an industry standard overall of four per hundred, and there
were more serious injuries at Amazon warehouses overall. And I've reached out to Amazon for a comment on this this morning. I haven't heard back yet.
But Jeff Bezos did address this in his shareholder letter, he said that, you know, musculoskeletal disorders are 40 percent of the injuries they see
in the warehouses and they are rolling out different safety initiatives to try to deal with this including sort of a wellness program, which teaches
employees how to sort of prevent these injuries and interestingly, a new automated staffing schedule, which would allow employees to rotate between
different muscle groups to avoid sort of repetitive strain injuries.
And he says it is working. He says that musculoskeletal disorders decreased by 32 percent between 2019 and 2020. And as I said, that did show up in the
data from this report that there was a decrease between 2019 and 2020 because of those COVID-related improvements -- Julia.
CHATTERLEY: Clare, time to stretch, please, raise your arms above your head, time to stretch. There we go.
Clare Sebastian, thank you for that.
All right, let's move on to China's new Central Bank digital currency trial. The government handing out more than $6 million in digital wallets
to residents in Beijing. It's using a lottery to distribute the cash.
Selina Wang has been looking at the details on this for us. Not the first lottery style handout, Selina. We should make that point, but of course,
now we're very much focused on this in light of China's recent moves against other digital assets, tokens, currencies, like Bitcoin, for
example, just start by explaining the lottery handout and what the aim is here.
SELINA WANG, CNN CORRESPONDENT: That's right. Well, Julia, China right now is the front runner in this global race to launch a Central Bank digital
currency, and as it ramps up this development, we are seeing more and more of these trial run test projects in the form of these lotteries.
Now, in this particular lottery, Beijing residents can use two banking apps to sign up and try and be one of the winners of some 200,000 red packets
that each contain about $31.00. Now this digital currency, however, can only be spent at designated merchants.
As of April, however, the Central Bank Authority said that there is no plan yet to launch this nationwide, that we are seeing more and more of these
test projects, and we are seeing this expansion come quite aggressively and the Central Bank Authority say that it could even be used for foreign
athletes and visitors at the Beijing Winter Olympics.
Now some experts have said that China's digital currency could be used to increase the influence of the U.N. on an international stage to even
eventually break the U.S. dollars dominance. But Central Bank Authorities have pushed back against that saying it is not trying to overthrow the U.S.
dollar dominance and that this is for domestic use -- Julia.
CHATTERLEY: Yes. It's fascinating, though, isn't it, if you start to see countries like Iran, like Russia, like China, for example, all creating
these Central Bank digital currencies, then it does to some degree undermine the prowess of the U.S. dollar whether you like it or not.
Talk to me about the difference though, and I think this is critical for our viewers to understand. The difference between a Central Bank creating a
digital coin like this and some of the other coins that we're talking about on a daily basis right now, the likes of Bitcoin, Dogecoin, for example,
and the terminology that we use is centralization or centralized currency versus decentralized currency. Just explain the difference for us --
WANG: Well, Julia, a digital yuan is very different from a cryptocurrency, it is a Central Bank digital currency. It is issued by the Central Bank, it
is not decentralized.
In fact, the entire approach of the Central Bank digital currency runs counter to the original tend Bitcoin and some other digital currencies in
which the whole point is that no one person or organization can have complete control.
Now, the digital yuan has raised significant privacy concerns, but Chinese authorities have said that this is a way to make transactions easier, more
secure and to help those who don't have access to bank accounts.
But again, when I speak to experts, they say that this could potentially be enhancing China's Central Authority and it would provide unprecedented
access and information for the Central Authorities into where people are and how they are spending their money.
WANG: Now, while China is already nearly cashless, it is different from what this digital yuan would be since the cashless society in China right
now is primarily being transacted on these privately run apps and platforms. So the big question moving forward is how much is this going to
strengthen Beijing's surveillance and control not just of society, but also of the economy?
CHATTERLEY: Selina Wang, great job. Thank you so much for that.
Okay, let's move on. The White House is blaming a criminal organization based in Russia for a ransomware attack on one of the largest meat
processing companies in the world. It's taking down plants in North America and Australia.
Alex Marquardt has the latest from Washington. Alex, the question is, what is the White House going to do about it? At least, they're talking to the
Russian government about what happened here. Please explain.
ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: Yes, they have reached out to the Russian government. The White House said very quickly,
once this ransomware attack came to light, the Kremlin confirmed that there has been conversation and the Russian Foreign Ministry saying that that has
taken place between the U.S. State Department and the Russian Embassy here in Washington.
Essentially, what the U.S. is telling Russia is these ransomware hackers are operating on your territory, and that cannot stand. Julia, this is a
plague really that is sweeping the globe.
Companies and entities across all sectors are being affected by these ransomware attacks that show no sign of abating. One cybersecurity expert
called it a gold rush because it is so lucrative, because these companies are often willing to hand over millions of dollars in exchange to get their
systems back. We just saw that with the Colonial Pipeline here in the United States.
So JBS, one of the biggest food companies in the world, one of the biggest meat processors and production companies in the world, says that they were
hit by an organized cyberattack that the U.S. has now said came out of Russia. And all of their meat processing facilities here in the United
States were affected, all of their beef production facilities were shut down, but that is gradually coming back online according to JBS.
We got a statement from them last night, and I want to read part of that to you. It says: "Our systems are coming back online. We are not sparing any
resources to fight this threat. The vast majority of our beef, pork, poultry and prepared foods plants will be operational on Wednesday."
Julia, that's something that we have seen reflected on Facebook posts. One of the ways that we are tracking this was that the various JBS plants
around the country have been posting on Facebook so that their employees know what's going on. We saw the shutdowns for the last two days, they do
appear to be coming back online.
Now, one major question that we don't have an answer to, Julia, is whether a ransom was paid. We know that one was demanded, but we do not know
whether the company paid anything to get their systems back up and running -- Julia.
CHATTERLEY: But they're choosing our most vulnerable supply chain logistic, transportation networks. We saw that with the pipeline just a
couple of weeks ago and those kind of vulnerabilities and choke points mean hasty payments, typically.
I think what's that saying? Fool me once, shame on you; fool me twice in this space of less than a month, shame on me. Like governments need to do
something and do something fast.
MARQUARDT: That's right.
CHATTERLEY: Alex Marquardt, thank you so much for that.
MARQUARDT: Thank you.
CHATTERLEY: Okay, let me bring you up to speed now with some of the other stories making headlines around the world.
Opposition parties in Israel have just a few hours to reach an agreement on a new government. Right now, centrist leader, Yair Lapid is working with
right-wing nationalist, Naftali Bennett to finalize that proposed coalition. If they clinch a deal in time, they could end Benjamin
Netanyahu's 12-year run as Prime Minister.
For more, CNN's Hadas Gold joins us live. Hadas, we've been here many times it seems before and Benjamin Netanyahu is also still here. What's the
likelihood of this coalition at least forming successfully in the coming hours?
HADAS GOLD, CNN CORRESPONDENT: Well, Julia, I don't think you can ever never say never in Israeli politics, and Benjamin Netanyahu is definitely a
survivor of Israeli politics.
He has been Prime Minister now for 12 years, but this definitely feels as close as perhaps Israel has ever been to seeing the back of Benjamin
Netanyahu, but many people here will not believe that he is gone until this new government is actually sworn in. Sources close to the negotiations are
telling us that they have made significant progress overnight, and nearly everything is done.
But that official announcement has not yet come. They have until midnight tonight to tell the Israeli President they have been able to form this
coalition government. But even if they make the announcement tonight and make it before the midnight deadline, it is not a done deal yet, and that's
because this government needs to be presented to the Knesset, the Israeli Parliament for a confidence vote.
And they have to do that within seven days and in Israeli politics, Julia, seven days can be an eternity and a lot could change.
Netanyahu and his allies could try to convince some defectors and they only need a handful to defect for this coalition to crumble. If something
happens to the ceasefire with Hamas-led militants in Gaza. If something happens in relation to the Palestinians; that could all cause this
coalition to crumble.
GOLD: But as it stands right now, it does seem as though this is where we are headed. The people close to the negotiations are feeling rather
confident, but again, never say never. We have until midnight tonight to see if they do have the numbers to bring this government together to bring
this coalition. They still have to get it through the Israeli Parliament for that confidence vote before they can actually be sworn in.
And many people here are holding their breath until that new government, until a potential new Prime Minister is officially sworn in.
CHATTERLEY: Yes. And a kaleidoscope of political opinions and views as well, Hadas, so even if they come from a coalition government, how long
does that last?
Thank you very much for that, we shall see.
Marine officials are worried that a cargo ship sinking off the coast of Sri Lanka could create an oil spill emergency. The Singaporean vessel was on
fire for nearly two weeks before it started sinking. Authorities say, it is carrying toxic chemicals as well as hundreds of tons of oil, calling it one
of Sri Lanka's worst ecological disasters.
Okay, still to come here on FIRST MOVE, the race to vaccinate the world as new coronavirus variants emerge. We speak with the World Health
Organization's Chief Scientist on the efforts to beat the pandemic.
And adapting to the new normal, the Executive Chairman of Equinox joins to discuss the fitness company's efforts to reinvent the model of fitness.
Stay with us, we are back after this.
CHATTERLEY: Welcome back to FIRST MOVE.
The World Health Organization says global coronavirus cases have fallen for a fifth straight week. Cases are down 15 percent on the previous week, but
there are still some hotspots and concerns.
Three and a half million new infections occurred in just the last seven days. That was primarily driven by surges in Africa, Latin America, and
last year's success story, Southeast Asia. It comes a day after the W.H.O. listed the Chinese vaccine Sinovac for emergency use, the eighth vaccine to
The agency has also been joined by the I.M.F., the World Bank and the World Trade Organization in a call for wealthy nations to pledge an additional
$50 billion towards the global vaccination effort, which so far has been lagging.
I am pleased to say, Dr. Soumya Swaminathan is the World Health Organization's Chief Scientist, and she joins us now.
CHATTERLEY: Dr. Swaminathan, fantastic to have you on the show. A hugely important call from you, and other bodies to say we need more effort to
approach vaccine delivery around the world. And clearly, we're still lacking.
Just talk about the World Health Organization's efforts to boost manufacturing hubs in places all around the world, particularly in places
DR. SOUMYA SWAMINATHAN, CHIEF SCIENTIST, WORLD HEALTH ORGANIZATION: Thank you so much, Julia. This is a really important topic.
And you know that today, 1.8 billion vaccine doses have been administered around the world. The majority of them, 77 percent in 10 countries, and
most of these countries are those which either manufacture vaccines or which had made advance purchases. And there's a gap, a huge gap between the
low middle income and low income countries and the high income countries in vaccinating.
And the goal really is based upon the fact that unless people everywhere are protected, this pandemic is not going to come under control, and the
way things are going now, it looks like there's a divergent response.
There is one part of the world that is thinking about getting back to normal, back to normal economic activity, back to normal life because a
large proportion of the population has received the vaccine and you can see the case rates dropping, death is dropping. But there's a huge part of the
world that is staring at a very uncertain future.
And so, the four organizations -- W.H.O., the W.T.O., I.M.F. and World Bank, have jointly put out a call to countries and manufacturers to do the
following. The first is for countries to share doses that they have -- additional doses, extra doses that they have immediately now, not after six
months with COVAX, so that it can be distributed equitably to countries that need them, and that have still not vaccinated their healthcare
The second call to manufacturers is to again prioritize COVAX with any additional supplies because many manufacturers are scaling up supplies and
setting up new facilities and making deals with other companies to manufacture their vaccines.
So to prioritize COVAX in the additional doses that they hope to manufacture in the coming months.
We also make a call to countries to not put in place any kind of export restrictions, especially on raw materials and supply chains, because you
need this global supply chain and trade to remain open so that everyone around, you know, the manufacturers around the world get the raw materials
And fourthly, we hope that we can set up manufacturing production capacity particularly in areas of the world, where there is very limited capacity at
the moment so that they can produce vaccines for this pandemic, to bring an end to this pandemic, but also be prepared for the future.
And for that, we need investments. We need investments from countries both to replenish what we need in the act accelerator, so that's the $35
billion, but also for local production capacity in in places like Africa, on the African continent, and Latin America, which are the areas which are
CHATTERLEY: And just to be very clear, I mean, you say and state it very clearly here, it's a $50 billion investment, but it could regenerate an
additional $9 trillion in additional global output by 2025. So there's a vested interest for every nation to look at this and say, look, we provide
what we can and more in terms of financials, and we'll all benefit from that.
CHATTERLEY: Just very quickly on the scientific point that you mentioned, do nations and the continent of Africa, for example, have the scientific
capabilities to manufacture vaccines today to the COVID-19? Because that's been some of the pushback.
Can I just quickly get your expertise on that? Do they have the scientific capabilities to manufacture today?
SWAMINATHAN: Indeed, you know, there is a lot of capacity in Africa and in other parts of the world, we should not underestimate that. But what we're
talking about here is new technology, you know, the mRNA platforms that have only for the first time, you know, been shown -- this is the proof of
concept. For the first time they've been used as a vaccine on such a large scale. And clearly, there's huge potential, both in the speed with which
you can actually change the mRNA vaccine composition, and potentially its application to other diseases and other infections.
So it's very important that this technology platform capacity must be built to make vaccines using this platform. And for that, we need the groups
which have this know-how and which have this technology to share, not just the IP and the patents, but more importantly the knowledge, you know the
technology, the recipe book, so to speak.
SWAMINATHAN: And actually help to train people who have the basic knowledge and the basic facilities, but they need to be trained on this
particular platform technology and in some of the other new technologies, so that that can then be quickly scaled up.
And the mRNA platform actually has several advantages, apart from the fact that it can be quickly modified, it can also be done in modular settings.
You don't have to necessarily build huge factories, so it could be done modular, and then it can be actually scaled out.
So that's what we are hoping to do, it is to link people who have the technology and know-how and who are willing to share with their
counterparts in Africa, for example, and working with the African Union who has a very clear plan forward on this, I think this can be made a reality
CHATTERLEY: Can I also talk to you about treatments? Because this is another way we tackle the spread of this virus. And we do have treatments
out there. I've had people say to me, I'm not going to get a vaccine, because there are very good treatments out there.
But they're restricted, they're in short supply, and they're expensive. How much focus is the World Health Organization placing on the need to ramp up
supplies and manufacturing of treatments, too, in addition to the work that you're doing with vaccines.
SWAMINATHAN: This is a really good point, because everyone does tend to focus on vaccines as a silver bullet, but we have to remember, it's going
to take time to get, you know, the kind of population level immunity we want. So until then, we really need to keep our focus on the public health
measures that we all know about. But also on diagnostics, very important, because unless you test, unless you know where your infection is, what your
burden is, you can't really plan.
So it's really important for many countries that are still not testing enough. So they need to scale up diagnostics and treatments. And we've seen
that there are a few treatments that are quite useful in moderate and severe disease like the corticosteroids, which you know, very old drugs
that have been around for a long time, but can be lifesaving when patients get that over inflammation and lung damage because of that, some
immunomodulatory drugs have been found to be helpful.
And we're getting more data now on the monoclonal antibodies, which in a way is doing the work of what vaccines do. Vaccines, once injected into the
body stimulate the body's immune response and antibodies. But if you don't have that vaccine, then giving monoclonal antibodies, does that job
temporarily, it goes and it fights the virus. It has to be given early in the course of infection, so within the first seven days or so, and it's
still expensive, because monoclonal technology, again, is not a technology that's widely available. There are not too many manufacturers, producing
generic products, for example.
But it is a potential of great use, and what is being shown now is that combining two monoclonal antibodies is better because it helps to overcome
the effect of mutations and the variants and so on.
CHATTERLEY: I want to ask you, as well, while I have you about the investigations into the origin of virus, clearly, again, very topical. The
Director General said, and I'll quote him, "Further studies will be needed in a range of areas that include the laboratory incident hypothesis."
I just wondered if there's any updates from the World Health Organization on investigating that theory and whether the World Health Organization
feels like it's under any further pressure in light of the announcement from the Biden's administration that they're now investigating, too.
What can you tell us?
SWAMINATHAN: So as you know, we've just come out of the World Health Assembly, where all our member states, you know, discussed many issues
about the pandemic. They talked about future pandemic preparedness, and this issue was also discussed.
As you know, that -- you know, the international team that went to China earlier this year has a very detailed report on the findings, and also plan
for future. So this was only the phase one. And from the very beginning, everyone knew that you are not going to get to the origins in that limited
period of time.
So it there's a scope of work of phase two, and potentially, you know, future phases of work that need to be done. Looking at all the options that
were on the table, so the jump from an animal to a human either through an intermediate animal or directly from a bat, for example. The hypothesis
that it could have accidentally leaked from the lab was also on the table.
And one needs to go back and look very carefully. There are a number of studies that have been planned and outlined in that report. The Director
General said very clearly that he will support further investigations into all these hypotheses and that nothing was really off the table.
SWAMINATHAN: But I think now it's a question of really focusing on the science because you know, this is how we got to the bottom of previous
outbreaks and got to the origin. It is through very systematic, detailed scientific interrogation of -- kept all the hypothesis on the table. But
then you need epidemiological studies, you need to look at data, you need to go back to stored blood samples and examine them.
So there's a huge amount of work, and I hope that it will get going in the coming weeks.
CHATTERLEY: So you welcome that investigation and we focus on the science. Dr. Swaminathan, fantastic to have you on the show. Thank you so much for
your time today.
The World Health Organization's Chief Scientist there, thank you once again.
Okay, the market opens next, stay with us.
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running this Wednesday. Wall Street feeling a little bit like the hit horror film
"A Quiet Place 2," it has been a muted start to the shortened week. But hey, we're still close to record highs and nothing too frightful.
Although this scary lack of labor across the United States could lead to limited price action until that latest jobs update, the nonfarm payroll
report out Friday.
In the meantime, U.S. regulators might give Tesla investors a further fright. "The Wall Street Journal' reporting that the S.E.C., the regulators
have been up in arms over two Elon Musk tweets that it believes were not properly vetted by Tesla lawyers before being sent out.
A violation perhaps of the settlement between the S.E.C. and Tesla over previous controversial Musk tweets. I'm not sure he cares.
Global economic reopenings might one day lead to a frightful future for the quintessential stay-at-home stock, Zoom. Zoom assures us that it's still
zooming. Paul La Monica joins us now.
Paul, I mean, the results that they provided were absolutely fantastic. What created a little bit of caution was the fact that they said, look, all
this isn't going to last forever. We are going to see a bit of softening, but it's still going to be good. That was my read.
PAUL LA MONICA, CNN BUSINESS REPORTER: Exactly. Yes, sales growth was up 200 percent about in the most recent quarter and that comes at a time where
the work from home environment isn't ending, but it is shifting to a hybrid one. People are starting to go back to the office and that could lead to a
decrease in demand for services like Zoom.
But that being said, the company still issued new guidance for earnings and revenue that topped Wall Street's forecast. So I don't think investors are
that worried. But the big issue though, Zoom stock was up so dramatically last year, it's going to be difficult for it to build upon those gains.
That's why shares are just flat so far in 2021, even though they're up slightly today on those earnings.
CHATTERLEY: All zoomed out, but still zooming. I have to stop. I have to shut up now and talk about AMC because this one is really fascinating. The
retail army, AMC stock. Now AMC turned around and going, hey guys, we're embracing you. You're going to help us revitalize our brand. Talk me
through what AMC has today.
LA MONICA: Free popcorn.
LA MONICA: Yes, interesting to see AMC directly embrace that Reddit crowd of retail investors. So they have this new program where they will be
giving AMC retail investors things like free popcorn and other perks that they can get once, you know, they are reopening even more theaters. And
that's good news. And AMC stock is rising, yet again.
But here's what's troubling. Goldman Sachs has a more sobering view about the run up in movie theater stocks. They downgraded AMC rivals Cinemark and
IMAX to a sell this morning because even though people are going back to the theaters, I saw "A Quiet Place 2" over the weekend, I think this is all
built into the stock prices already.
CHATTERLEY: Yes, let's hope that they are still eating the popcorn, not throwing the popcorn, quite frankly, if the share price sinks once again.
Interesting, interesting business model.
LA MONICA: Yes. Yes.
CHATTERLEY: I am shutting up.
LA MONICA: I mean, no, no, it's fine. I was just going to try and joke that they're throwing the popcorn at short sellers who are the ones who are
really feeling all the pain from AMC stock continuing this meteoric rise.
CHATTERLEY: Yes, for now. Paul La Monica, thank you so much for that. Next time, I will bring the popcorn and just shove it in my mouth and stop
talking for a change.
From the big screens to the HBO Max of fitness quotes, that's how luxury fitness brand, Equinox, now sees itself after reinventing its business
model during the pandemic. Once known for eucalyptus towels and lavish facilities, Equinox is now embracing tech to give members what it calls a
tribrid experience offering workouts at its gyms, outdoors or at home via an app.
And the executive chairman of Equinox, Harvey Spevak joins us now. Harvey, fantastic to have you on the show. Talk to me about the new business model,
how many of your old members are back in the gyms using them traditionally, versus using this tribrid model?
HARVEY SPEVAK, CEO, EQUINOX: Well, thanks for having me back, Julia. And hopefully not too many of them are eating popcorn.
CHATTERLEY: But it is healthy.
SPEVAK: But I would say it's fascinating what's happening, particularly since we went mask free and I'm going to read you a quote that I got last
night in a text I got from a friend of mine who is based in London, who is in the fashion community that said, "Mask free Equinox is my favorite
indicator of the world's recovery." And that's exactly what's happening.
So what we're seeing is a huge surge in demand for our offering physically, as well as digitally. And so we believe from a vision perspective that our
consumer who we cater to is going to want us both physically and digitally, because they've moved effectively to a no days mindset -- no days off
mindset, which is consistent with you know, Equinox is positioning as delivering and being the authority in high performance living.
From a physical perspective, since we, in the C.D.C. in the U.S. announced no more masks, obviously further guided by local government, we have seen a
huge surge in demand. We've seen it through check-ins at Equinox, we've seen it through ridership at SoulCycle. We've seen it through membership
sales at Equinox.
We've seen it in London where 75 percent, almost 80 percent of check-ins are back to pre-COVID levels. So just to put some stats out there to bring
this to life further. On the Equinox side, we had two of our three biggest membership sales date in May since COVID started, so two of our biggest
days in 14 months.
We've seen week over week sales in New York City up 35 percent. We've seen record check-ins in the 14 months. SoulCycle waitlist for classes,
ridership up 15 percent month over month between from April to May, largely driven by no masks. We've also seen that ridership up almost 50 percent
So all of this is clearly indicating -- we use the word rebound -- but our members, our community are eager to get back together. They're eager to get
back together in real life. They're eager to be in front of their favorite instructors, their favorite personal trainer. They are eager to do it
together. They are eager for the Equinox experience or the SoulCycle experience, and so they are back.
CHATTERLEY: I get it. I'm one of them. How much is the business still down though? Overall? I mean, I get the recovery story and it's great to hear,
but how much is the business still down?
And to your point, I think about this tribrid model and I do think it works. You don't take a day off, but some of it you'll do from home,
perhaps. You'll do it outdoors versus physically being in the building. What is that split going to be do you think post pandemic? 50/50? Maybe
SPEVAK: No. I think it's still, you know, we're almost akin to a live concert or eating in your favorite restaurant. We've gotten used to takeout
or delivery, but we really want to go in person and do it in real life.
So we believe the vast majority of our workouts will be in real life. But people do want the digital compliment. They want to be able to move back
and forth seamlessly. They want to do it in a personalized way. And that's our path forward and that's how we think it will occur.
So even if you look at retail, where I think the stats are something like 75 percent of all retail sales still happen in real life despite the surge
in e-commerce, I think that 75 percent will be much higher for a business like ours.
CHATTERLEY: Talk to me about hiring, because it's one of the big discussions in the United States now, the challenge of hiring people or
having to pay them more, unfortunately/ fortunately for them. Harvey, what's your experience of this?
SPEVAK: So far, we've been pretty fortunate. I mean, we are concerned about it, but we've been pretty fortunate. So roughly 90 percent of our
employees, some of which we had to put on furlough have come back since we've gone to a full opening offering, whether it be at Equinox or Blink
Grand and Soul is starting to ramp up there, but we are concerned about it.
We see a little bit of friction, but because what we do is so unique to the marketplace, and so many of the individuals that we want to hire, want to
live and be part of a healthy lifestyle and do something for a purpose that's somewhat mitigating some of the issues in the labor market for us.
CHATTERLEY: So the bottom line message here is that fitness is coming back. You have a differentiated product and you seem pretty confident, I
think about the next three to six months in terms of recovery.
SPEVAK: Feeling very, very -- I would use the word optimistic, if not confident. When you had me on last, I think, I was pretty optimistic then
that people would come back.
CHATTERLEY: You were.
SPEVAK: I am just surprised at how fast they are coming back. They are really -- people are very excited.
CHATTERLEY: Yes, you called it. I was a little bit more skeptical. You were correct. I stand corrected.
Harvey, great to have you on. Thank you very much for updating us and it is good to hear.
SPEVAK: Thank you for having me, Julia, as always.
CHATTERLEY: Harvey Spevak there. Thank you.
Okay, that's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages. You can search for
In the meantime, stay safe. I'll see you tomorrow and "Marketplace Asia" is up next.