ANNOUNCER: This is NIGHTLY BUSINESS REPORT with Sue Herera and Bill
SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR: Good evening, everyone, and welcome to this special edition of NIGHTLY BUSINESS REPORT. I`m Sue Herera.
BILL GRIFFETH, NIGHTLY BUSINESS REPORT ANCHOR: And I`m Bill Griffeth. On this Thanksgiving Day, of course, the stock market is closed, Wall Street is quiet.
So we thought it was the perfect time for us to take another look at some
of the stories that caught our attention over the past few months.
HERERA: Indeed. And we begin with travel which is something most
Americans are dealing with on this holiday. Reducing travel time,
particularly for rail and bus users, is projected to be a big business.
But what`s the best way to do that? One way is to give riders the
information they need to get where they`re going more efficiently, and that
is why two entrepreneurs are making your mobility their business.
HERERA: In 2008 and 2009, Matt Caywood spent many grad school nights in a San Francisco lab researching A.I. and neuroscience, but getting home meant guesswork. Which of several buses might show up first? That type of information was not yet widely available.
MATT CAYWOOD, TRANSITSCREEN CO-FOUNDER AND CEO: When they first produced real-time live information, I realized that that could, you know, solve my problem. I would never have to wait in the fog again. But the problem was there wasn`t a single place to get it all.
HERERA: In his free time, Caywood began developing a platform to get it
all — buses, rail, car services like Uber and Lyft, bikes and scooters,
In 2013, he was working in Washington, D.C. when he took a prototype to a
mentoring group for entrepreneurs, and that`s where he met Ryan Croft, a
tour company owner whose travels had taken him to 50 countries and 100
RYAN CROFT, TRANSITSCREEN CO-FOUNDER AND COO: They all had poor traffic. Information is king. If you give people information at the time that they need it, they can make an informed decision.
HERERA: They began bootstrapping a business, TransitScreen.
CAYWOOD: If I press this, will it give me a location?
HERERA: Along the way, the former U.S. president took notice at a startup
incubator, and in 2015, TransitScreen went live, sharing information at
first from San Francisco and the D.C. area.
CROFT: We`re driving them customers and giving them a better experience. In return, they don`t charge us and we don`t charge them.
HERERA: Now, TransitScreen digests more than 2,000 fees from 60 cities
around the world 24 hours a day.
CROFT: How often are these trains coming? Are there a lot of Ubers and
bike shares and scooters nearby in the proximity of the building?
CAYWOOD: If it is coming in four minutes, maybe I walk straight there. If
it is longer, maybe I`ll decide I want to stop and grab a coffee.
HERERA: Who pays for their service?
TRISTON FRAY, OCULUS REALTY: Everybody seems to use them.
HERERA: Real estate developers and leasing agents like Triston Fray. Of
course, because it is all about location, location, location.
TransitScreen won`t say exactly what they charge, only that it is usually a
few hundred dollars a month per screen, and they`re in roughly 1,500
buildings across the country.
FRAY: It is definitely a major selling point as I am taking people to look
at the building. They`re always like, oh, wow, that`s super, super useful.
HERERA: Now, there`s also an app for that called City Motion, and this
year a new revenue stream. Many big companies provide employee shuttle
services and some are paying to help their employees choose a route that`s
right for them.
CAYWOOD: It is an amenity for employees, but it is actually a necessity
CROFT: We just kept hearing the story over and over again, about the pain
CAYWOOD: We are right on top of a metro station ourselves here. Why?
Because we want to be close to our employees.
HERERA: Lots of those big companies are multinationals, so TransitScreen
already on track to bring in between $4 million and $8 million in sales in
2019, is planning to expand into 14 European cities beginning later this
For Caywood and Croft, time really is money.
CROFT: It is a very scalable business and it is an endless ocean of
companies out there, and we`re just now sort of in the first inning or two
of this long game.
HERERA: And as transportation becomes more data driven, the company is
working to get transit systems on the same page when it comes to data
formats. That way the information can get to the rest of us more smoothly.
GRIFFETH: Now to something most Americans can say they identify with, that would be home renovations. It can be a painful process sometimes, but two entrepreneurs hope to make it a little less so by giving both homeowners and builders a one-stop shop for materials, design, and construction.
GRIFFETH: The thought of home renovation makes most of us wince. The
order of the day — cautious pessimism.
LUKE SHERWIN, BLOCK CO-FOUNDER: The joke is neither of us would renovate even if we could afford to.
KODA WANG, BLOCK CO-FOUNDER: We thought about renovation as an insane, in a poor way, experience for folks.
UNIDENTIFIED MALE: Yes, this is a new bathtub.
GRIFFETH: Trying to simplify the renovation process might sound even more insane, but Luke Sherwin and Koda Wang are trying. Their digital platform, Block, aims to improve confidence for both owners and builders when it comes to quality, cost and convenience.
UNIDENTIFIED MALE: These are before and afters.
GRIFFETH: Focusing on bathrooms since launching in December of 2018, Block has completed almost 100 jobs in apartments and single family homes in New York City and in New Jersey. They say Block`s average cost is slightly below “Remodeling Magazine`s” midrange average, about $28,000 in the New York area for an existing five-by-seven room. The national average: about $20,000.
WANG: We have found a lot of people are sort of paralyzed by how many
thousand of combinations are out there.
UNIDENTIFIED MALE: Yes, it`s a nice color.
GRIFFETH: By limiting its range of products, Block knows what it needs and it can negotiate prices for tubs and faucets, vanities and the like.
SAOLI CHU, BLOCK LEAD DESIGNER: We create a 3D model.
GRIFFETH: It also streamlines the design process.
CHU: A completely custom design and take probably around five to six
hours, versus doing it using the products in the catalogue, takes about an
SHERWIN: It basically is an efficiency on every single step of the
GRIFFETH: Sherwin and Wang say efficiencies are gained in the construction phase, too. Block vets and hires its own builders.
SHERWIN: Their guys are showing up and everything is ready for them to
install. Because Block acquires the customer, you are eliminating the
dance renovators have to do.
GRIFFETH: Instead of the dance, the dreaded bidding process, Block gets
builders to accept lower fees by making their jobs easier.
WANG: They don`t like to do marketing on Instagram. They don`t like to do all of the little billing and administrative work. They don`t like to be
sending out 20 proposals and hoping to win one.
GRIFFETH: They do like to build though. Sherwin and Wong believe dangling a carrot, a pipeline of future projects, eliminates a builder`s greatest fear, finding the next job.
RALPH ABEKASSIS, DANCOBY CONSTRUCTION OWNER: You don`t have to go to the customer. You don`t have to call them and say, what about this, what about that, sizes, specs, finishes. It`s just so streamlined. So I could
potentially set up a crew and do multiple jobs at once.
GRIFFETH: This soup-to-nuts bathroom reno in New York City took less than a month. That`s a third of the national average, and it costs about
$30,000, just above the New York average for a midrange project, including
some custom plumbing and detailing.
Sherwin and Wang are already testing the Block model on kitchen projects
and they`re working to expand beyond the New York area.
WANG: If this works and it works at scale, then both the homeowner and the contractor should benefit.
GRIFFETH: Even though Sherwin and Wong haven`t actually renovated anything themselves, both had a hand in previous digital success stories. Sherwin at the mattress company Casper, and Wong in fashion at Rent the Runway.
HERERA: When speaking of fashion, we often think of women`s apparel. But it`s the men`s fashion industry that is growing quickly. Not necessarily
for business suits but rather for street wear.
And that`s why a team of entrepreneurs created an online marketplace
focused on men.
HERERA: Arun Gupta found a taste for fashion while he was in college at
Yale, but there was one problem.
ARUN GUPTA, GRAILED CEO AND CO-FOUNDER: I couldn`t afford any of it, because it`s pretty expensive.
HERERA: Gupta found that guys, yes, guys, were talking fashion online
occasionally, making deals on used, hard to find items. Holy Grails to
GUPTA: It`s like, oh, like this pair of boots came out three years ago,
like I missed it when they came out and now, they`re like impossible to
find anywhere. So, that`s my grail basically.
HERERA: By 2013, sites were selling used cars, furniture, even women`s
fashion. Men`s fashion was fashionably late to the game.
GUPTA: I was like, look, this secondary market thing will be huge. I want
to get in on this situation.
HERERA: So, Gupta built a rudimentary site and began convincing folks in
the chat rooms to use it.
GUPTA: Oh, that is sick.
HERERA: By 2014, Julian Connor, a software specialist, along with Jake
Metzger who has since moved on teamed with Gupta to cofound Grailed. It
now boasts some of 4 million users per month.
Connor used early versions of the site and still shops there today.
JULIAN CONNOR, GRAILED CTO AND CO-FOUNDER: I really like avant-garde fashion and so the jacket and shirt are both from an American-born designer that now lives in Paris. His name is Rick Owens.
GUPTA: I love that.
HERERA: Grailed collects a 6 percent fee on each transaction, 1.2 million
of them in 2018, at an average price of about $150 per unit. High-end
items can get the rare art treatment, selling for tens of thousands of
GUPTA: These cool Prada dress shoes for $123.
HERERA: Sometimes their vintage goods provide a surprise.
GUPTA: This is a rolling stone shirt from the `94, `95 tour. Super steal.
I got it for 50 bucks. It was awesome.
HERERA: Meticulous curation dictated by customer demand has built a
GUPTA: It`s like Margiela piece, like Margiela, the super iconic designer,
and the red sleeve is the whole thing. If you saw the latest first “Star
Wars” movie, “The Force Awakens”, the C-3PO has a red arm, which like may or may not be of influence by this jacket.
HERERA: Some rare items are sold. Others get archived.
GUPTA: This is an Issey Miyaki jacket. You remember Steve Jobs` iconic,
like black turtle necks. He`s the guy who designed all his turtle necks,
HERERA: Celebrities will sometimes borrow items to shoot magazine covers. And musicians have worn their pieces on stage.
GUPTA: That is Raf Simons but it`s based off of the New Order album art
cover for “Power, Corruption & Lies”, where all these details are hand-
CAM WOLF, GQ STYLE AND FEATURES WRITER: I think it`s really interesting to see how fashion now is just as much a hobby for guys as is, you know, sports or anything else.
HERERA: “GQ” writer Cam Wolf.
WOLF: You have to be well-versed in sort of these archive pieces. And I
think Grailed has really helped to educate that and serve that consumer.
GUPTA: This is another piece.
HERERA: An increasingly stylish consumer looking for a deal on high-end,
CONNOR: The value proposition that we provide is so salient to many, where I don`t think we`ve had this same sort of growth challenges that other businesses have had.
GUPTA: It all starts with talking to the consumer and understanding what
it is exactly that they want.
HERERA: Grailed is constantly expanding its reach. What started with
about 100 items now has almost 2 million pieces listed for sale from around
the world. And two years ago, it launched a sister site which focuses on
GRIFFETH: Still ahead, an investigation into a brazen crime that`s hurting
GRIFFETH: Now to an in-depth story on stealing. It`s not a new crime, of
course. But it is becoming more and more expensive for retailers. In
fact, retail crime losses are at an all-time high right now, according to
the National Retail Federation. Just last week, Home Depot (NYSE:HD) said
that its profits were hurt by shrink. That is the industry code word for
theft, among other things.
So the company gave us exclusive access to see how it fights a never-ending
battle against stealing.
Courtney Reagan has our investigation, “Grab and Go.”
COURTNEY REAGAN, NIGHTLY BUSINESS REPORT CORRESPONDENT: You`re watching brazen retail theft. The suspects are so sure they won`t get caught, that some even get aggressive when stopped, as this surveillance video from Home Depot (NYSE:HD) shows. Most likely, these people aren`t shoplifters or people who steal items for their own use. Instead, it`s a bigger problem known as organized retail crime, with criminals working together to steal for profit.
Home Depot`s Jamie Bourne investigates the theft. It all starts with
JAMIE BOURNE, HOME DEPOT ORC MANAGER: A booster is somebody that is basically professional shop lifter, they`re doing it for profit. Not just
for personal use.
REAGAN: Are they just guessing what items are in demand? Do they know it from history? I know that I can sell a lot of drills.
BOURNE: There are many locations out there that are giving lists to the
REAGAN: They`re giving lists, they`re part of the crime, too, are they
REAGAN: One of those locations was this pawnshop. The manager was charged with selling stolen property. The case is ongoing.
Our next stop, this raid.
POLICE OFFICER: Police, search warrant!
REAGAN: Borne and his team helped when law enforcement served a search warrant on this Utah home.
BOURNE: When we serve warrants with law enforcement, we can provide them the value of the merchandise.
REAGAN: The suspect allegedly sold stolen power drills and other tools on
Facebook (NASDAQ:FB). He was arrested.
Law enforcement seized a pallet full of items from the home. They were
brought to this warehouse. It may look like Home Depot (NYSE:HD), but this is actually an evidence room. Inside, is over $1 million worth of stolen
products seized from a raid of seven pawn shops.
CHRISTOPER WALDEN, UTAH AG`S OFFICE SPECIAL AGENT: We`ll actually see on the inside of a pawn shop. They`ll say Lowe`s and Home Depot`s price, you know, $129.99. Our price, $79.99.
REAGAN: Chris Walden is a special agent with Utah Attorney General`s
WALDEN: How is it that second-hand merchants are selling it for less than
what a big box retailer like Home Depot (NYSE:HD) and Lowe`s can even buy the product for?
REAGAN: They found the answer in these sting operations.
UNIDENTIFIED MALE: Sell them, pawn them?
UNIDENTIFIED FEMALE: Yes, sell them.
REAGAN: This is undercover video of law enforcement selling items that
seem stolen to those pawn shops. The case led to a new Utah law that makes it harder for pawn shops to buy unopened products.
WALDEN: Since we passed the new law, it seems like it`s getting better we
seen a shift over to e-commerce.
REAGAN: Just like the power tools we saw confiscated during the raid.
Here they were for sale on Facebook (NASDAQ:FB).
Organized retail crime is growing, and costs the industry nearly $800,000
for every $1 billion in sales. Home Depot (NYSE:HD) said its profit took a
hit in the last three quarters because of higher shrink or loss of goods,
which includes organized retail crime.
SCOTT GLENN, HOME DEPOT VP ASSEST PROTECTION: While we don`t comment on our particular numbers, we are seeing shrinkage rates rise across the country.
REAGAN: Scott Glenn is in charge of asset protection for Home Depot
GLENN: Organized retail crime drives other crimes. It drives drugs. It
drives guns. It drives human trafficking. I think the opioid and drug
epidemic is a piece of it.
So, when we`re dealing with people who may have no regard for injuring
people, when you have people that are dealing with no regard for their own safety, we don`t engage with those folks.
REAGAN: Is that why you think the criminal activity may be continuing at
Home Depot (NYSE:HD) in the criminals know, I can get away with this?
GLENN: I think criminal activity is happening in every retailer every day
across the country, it`s not exclusive to us.
REAGAN: Why should consumers care that this is happening? Isn`t Home
Depot (NYSE:HD) big enough to absorb this issue?
GLENN: We have been very good about not raising prices as a result of our
shrink equation. But if it gets to a point where we cannot continue to do
business this way, ultimately, we`ll have to pass it along.
REAGAN: For NIGHTLY BUSINESS REPORT, I`m Courtney Reagan in Salt Lake City, Utah.
HERERA: Coming up, a city in the Deep South undergoes a renaissance.
GRIFFETH: We report a lot about real estate trends. After all, our homes
are one of our most valuable assets. But a curious thing is taking shape
in the market. Affordability has long been an issue for those looking to
buy a home. And now, the same is true for those who want to rent single-
family homes because demand is hotter than ever.
Diana Olick explains.
DIANA OLICK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Anyone out shopping for an entry-level home knows the prices are high and the pickings are slim. Now, the same is holding true for rentals. As more Americans find it harder to afford a home, rental demand is soaring, especially for single-family homes.
Kimberly Cestari is both a real estate agent and a landlord, and she`s seen
the D.C. rental market take off.
KIMBERLY CESTARI, LONG AND FOSTER AGENT: I think it`s more a millennial thing, and they have the income available for the higher prices on the single-family detached homes. They may have tried a condo, now they want outdoor space and they have the disposable income to use it.
OLICK: The supply of rental homes is shrinking nationally. In the third
quarter of this year, single-family vacancies were 6.8 percent, down from
7.1 percent one year ago, according to Core Logic. Supply is much lower on
the low end. So rent prices there are increasing most, up 4 percent
annually in September. Higher-end rents were up less.
But in the hottest market, like Phoenix, Las Vegas, and Seattle, rents are
CESTARI: Rents are not going down. I have seen consistent growth year
after year. And single-family markets in particular. People want that
experience of having a yard, having enough bedrooms and baths. And I`ve
seen increases consistent every year.
OLICK: The number of single-family homes available for less than $1,250
per month has dropped 40 percent since 2013 according to Capital Economics. All this despite the fact that the single-family rental market ballooned during the foreclosure crisis. Investors bought thousands of distressed homes, growing the rental supply by 38 percent just between 2012 and 2016.
Most thought that as the housing market recovered, investors would sell
their properties for a nice profit and call it a day, but the rental income
now is just too lucrative. So, even more investors are buying more
For NIGHTLY BUSINESS REPORT, I`m Diana Olick in Washington.
HERERA: From housing to cars and the rush to go electric. Ford is going
all-out. The automaker is attaching its iconic Mustang brand to its first
all-electric SUV. But will it have the horsepower and the appeal to be a
game changer for the automaker?
Phil LeBeau is in Los Angeles tonight.
PHIL LEBEAU, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is no pony car, but it is the all-new, all-electric SUV, the Mustang Mach-E, a name Ford`s chairman resisted when his team first approached him about calling it a Mustang.
BILL FORD, FORD EXECUTIVE CHAIRMAN: They weren`t very happy with my response, but the product kept evolving, both the performance of it and
also the styling of it, to the point where, you know, there was a point
where I finally realized, whoa, this is an amazing vehicle, and, yes, it`s
worthy of the Mustang pony.
LEBEAU: With a range of up to 300 miles fully charged and 47 miles after a
ten-minute quick charge, Ford believes the Mach-E has the power to energize its dismal electric car program. In the U.S., Tesla dominates E.V. sales, while GM, Nissan and VW share much of what`s left over. Ford hasn`t sold a single pure electric car this year.
The truth is electric models like the Chevy Volt and Nissan Leaf lack the
style and appeal of Tesla`s, while other recently introduced electric
models have also failed to connect with buyers. Which is why many are
wondering if the Mach-E with a more aggressive look and plenty of power
will finally be the E.V. that challenges Tesla.
JESSICA CALDWELL, EDMUNDS: I think the E.V. segment has really needed a shake-up. I think Tesla`s proved that these people want utility, they want
a — you know, environmentally friendly car but they also want something a
lot of design and I think Ford has proved that. You can do this at a
pretty affordable price point.
LEBEAU: Will Mustang fans care that this electric SUV bears little
resemblance to the pony car? Maybe, but Ford needs all the horses in its
stable to remind Americans it does more than sell pickup drugs.
JIM HACKETT, FORD CEO: The heart of the company is on trial here because we have to — we have to get this right because our Mustang share
performance just keeps getting better and better. We`re now the number one sports car in the world with Mustang, and this was important not to disrupt the state of that.
LEBEAU: The Mach-E rolls out late next year with a base price starting at
about $44,000, competitive with Tesla`s new Model Y, a crossover utility
vehicle which is expected to start selling in the mid $40,000 range. The
E.V. race is starting to heat up.
Phil LeBeau, NIGHTLY BUSINESS REPORT, Los Angeles.
GRIFFETH: And from Los Angeles now to Huntsville, Alabama, which is seeing a renaissance thanks to the aerospace and defense industry.
Morgan Brennan took a trip there to see the resurgence for herself.
MORGAN BRENNAN, NIGHTLY BUSINESS REPORT CORRESPONDENT: It`s called Rocket City, USA, home to one of the highest concentrations of engineers per capita and educational system that teaches STEM starting in elementary school and a long-standing ties to aerospace and defense.
CHIP CHERRY, HUNTSVILLE/MADISON COUNTY CHAMBER OF COMMERCE: We have legacy. Our aerospace heritage we work hard to maintain that. So, we have about 400 aerospace companies in our market. So, a very rich concentration of them and a lot of expansion in that.
BRENNAN: And the emergence of commercial space is only helping to propel it. Jeff Bezos` Blue Origin is building a $200 million rocket engine
factory in Huntsville and is taking over an historic test stand, NASA`s
Marshall Space Flight Center once used for its Saturn V rockets that
launched Apollo astronauts to the moon.
BOB SMITH, BLUE ORIGIN CEO: It has this great receptacle of talent there
that you can tap into. And it`s been decades in building. So, we wanted
to go to where the talent is.
BRENNAN: There`s been a boom in defense work as well. Hypersonic or
missiles traveling at mach 5 or faster are being developed here. That`s
helped to lure Aerojet Rocketdyne to move its defense headquarters to the
area. And Lockheed Martin (NYSE:LMT) recently broke ground on a
hypersonics facility just outside the city.
RICK AMBROSE, LOCKHEED MARTIN SPACE EXECUTIVE VICE PRESIDENT: They`re trying to become the innovation hub of the South with artificial
intelligence and other technologies, quantum computing. Space is faster
than hypersonics. So, all of the technologies can be brought together with
BRENNAN: That combination and the area`s deep roots in STEM have attracted other industries, as well.
Polaris spent $190 million to open a factory here just three years ago,
assembling sling shot and ranger vehicles.
CEO Scott Wine says it was an easy decision to make.
SCOTT WINE, POLARIS CHAIRMAN & CEO: I think the longstanding commitment to engineering that`s been in Huntsville for so many years since World War II, really, and then with the Redstone Arsenal there and the Army STRATCOM there as well, there is a good infrastructure of personnel.
BRENNAN: And Polaris isn`t alone. G.E., Toyota (NYSE:TM) and Mazda, even Facebook (NASDAQ:FB) have been making investments. Even the FBI is busy expanding what it calls an HQ 2 on the Army`s Redstone Arsenal.
From 2000 to 2017, the Huntsville metro area grew population, jobs and
wages all at roughly two times the national rate. And at a time of low
unemployment across the U.S., here, it`s a stunningly low, 2.1 percent.
HudsonAlpha, a non-profit biotech collective focused on genomic sequencing, is based at Cummings Research Park. It includes companies like Serina Therapeutics, which has developed a polymer technology that could change treatment for Parkinson`s, epilepsy, even opioid addiction. But it all comes back to space.
RICHARD MYERS, HUDSONALPHA PRESIDENT & SCIENCE DIRECTOR: I love the fact that I have real rocket scientists working in my lab now because they`ve come from that industry to work here as well.
BRENNAN: For NIGHTLY BUSINESS REPORT, I`m Morgan Brennan in Huntsville, Alabama.
HERERA: Thank you for watching this special edition of NIGHTLY BUSINESS REPORT. I`m Sue Herera.
GRIFFETH: I`m Bill Griffeth. Have a great evening. Happy Thanksgiving,
everybody. We`ll see you tomorrow.
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