♪ carol: welcome to "bloomberg businessweek." i am carol massar at bloomberg headquarters in new york. this week's special issue focuses on businesses and companies and industries working on improving what they do. plus, it is the end of the blankfein era at goldman sachs. we take a look at the legacy. but we start in the economic session this week. many experts are predicting a global growth slowdown in the coming year. that didn't deter executive editor for economics simon

kennedy from making a bull case for 2019. he joins us from bloomberg headquarters in london. let's first start, it is a pretty depressing environment right now. that is the psychology out there right now. simon: it is important to differentiate what we are talking about when we talk about bull and bear cases. this isn't a market's call. if i could make market calls, i would be a rich man somewhere else. this is very much kind of a case for the defense for the global economy. the market seems to be testing that case as we enter the new year. but in some ways, the global economy, ok, slowing, but perhaps more cresting than slumping. there are some good points to make in arguing the economy, while not as strong as a year ago, it is looking fairly robust

into the new year. carol: let's make the case. you point out in your story about the imf still forecasting decent global growth. we haven't seen a lot of reduction in terms of growth estimates, have we? simon: the imf is at 3.7%, the third year in a row that we have had growth of that strength. we have central banks, obviously the markets lately have been worried about what the federal reserve is going to do. the federal reserve now signaling it might even pause rate hikes at some point in 2019, which would keep them where they were historically. there is a level of support from the central banks. you have seen donald trump has led tax cuts in the u.s., but other governments are releasing fiscal stimulus into their economy. you have oil price down to $50, so there are lots of areas of support for the world economy going forward. i think if those props can remain in place, the world gets

kind of a healthier expansion next year. one, increasingly led by the emerging markets, which had a bit of a rough year this year. carol: it is interesting. we heard from the fed this week. they reminded us they are data dependent and they are watching everything closely. we do feel like we are hearing more people talk about the potential for a recession, but we are not hearing people talk about a global recession for 2019, are we? simon: no. and i think even this talk of a u.s. recession, kind of on the fact that this sluggish expansion -- no one is going to write home about how strong the expansion has been, and there is some fatigue out there. when the wall street banks look at it, the most has a mystic are putting it at a 30% chance of a recession for the united states. for it to be a global recession, you need the u.s. to be slumping. in a year's time, we could be

joking about this story and how wrong it was, but i think there is a case to be made that there is certainly some support in 2019. at the end of the day, the unemployment rate is really low globally. it is its lowest since 1980. obviously back to the 1950's in the u.s. people are employed and people feel wages growing in their pocket. that is something that has been missing in the last few years. if unemployment states solid, that is a pretty robust indicator for the overall strength of the economy. carol: something to think about, a lot to think about heading into 2019. simon kennedy is our executive editor for economics. now for some insight in 2019, to hindsight on 2018, one senior editor took stock about what the investing landscape was like this year with a visit to the imaginary hedge fund, hindsight capital. jason kelly and i talked with him about the speculative journey.

>> hindsight capital llc is a hedge fund, which i've been visiting every year for the last 10 years, since before i arrived at bloomberg, which has the huge advantage that it invests with the benefit of hindsight's, i.e., it puts on the trades at the beginning of the year that you would put on if you have had perfect knowledge of how the year was going to work out. i put some limits on it, like obviously, if it was going to leverage up or go into individual stocks, then returns would be infinite every year. so the rules are that it can only go in relatively broad asset classes, no individual stocks or individual lawns, and it can't leverage up, and also, critically, it has to show that you did not need hindsight to make that trade at the beginning. that there was a justification for doing that trade at the beginning of the year, and i will mention just this once

because some people do get disappointed, this hedge fund is imaginary. it is a figment of my imagination. carol: we are having fun, everyone. john: and we will talk about my friends at hindsight capital. jason: if you are listening or watching, you can stop googling right now to get your money to hindsight capital. >> nobody has made as much money as these guys. this fund has beaten all others every year since i've been reporting on them. carol: talk about some of the trades that made some sense and that should have known about. john: exactly. the big theme people should have latched onto was america first. and not necessarily that the america first policy was going to mean american assets did fantastically, because they generally did not. although, some did ok, but that america first style policy, and that's not just the trump administration. that is also the fed becoming the first to tighten.

it would hurt everyone else. so for example, if you wanted, you can see that america, that this would be the year trump would go hard on trade, and also a year when he moved on from his failure to repeal obamacare. so you buy managed-care funds, which were up -- i don't have the numbers in front of me at this point -- which were up at this point something like 7% or 8%. thanks to the failure to repeal obama care, that's been pretty well. and then, if you want to buy something that will get it in the neck from the trade war, japanese marine trade has been down 40% and dollars the last time a check, and you put those two and you have something in the region of 60% what is immune to trade wars to what will get it in the next trade wars. carol: i love this.

short chinese tech along u.s. tech, buy t-bills, shorting u.s. homebuilders, you mentioned health care, and the world mining sector, and you can bet on volatility, right? that was a good one. john: there were two bubbles last year. one was in lack of volatility. right? the way the markets went up in a straight line last year was more or less unprecedented. there has never been -- once you adapted to volatility, there has never been a better year than last year. and then, of course, there was one bubble, which is one of the most blatant levels in the history of mankind, bitcoin, and, well, what might have conceivably make money was you shorted bitcoin. you borrowed some bitcoin and sold it and put proceeds into the vix. jason: the trade of the year. john: the problem is, when i wrote this because it has gone out for the businessweek

magazine, before the deadline, it was below an 800% level for the year. short bitcoin, long vix. as we record this, it's gone up to about 830%. depending on how scary the end of the year is, unfortunately, hindsight capital, even though they know, did not tell me, we could yet get to 1000%, depending on how silly the week between christmas and new year's is. but that was, the thing thing about that though is, any sensible person, any bloomberg employee, anybody working in finance, could have told you --they might not have wanted to bet their life savings on it --but short bitcoin come along vix was going to work this year. did it ever. carol: this week, as he mentioned, it is a special issue focused on good business. here to talk more about it is businessweek editor joel weber. we always hear about bad business. joel: it always get that bad

rap, and we wanted to use this opportunity to talk about places that are doing good. there are five things that stood out to us. one was the environment. we have this great story in west virginia about lavender, which is being planted on mountains that are basically gutted in search of coal. and yet as horrible as that is, there is a hopeful story of people planting lavender and creating a business where there was not an opportunity before. carol: making something good out of bad. >> there is another great story about the diamond industry. there is an attempt to transform what the model looks like, or how about me too? this massive movement, and yet, from an organization intimately affected by it, the dallas mavericks in sports. and the woman who has led the charge and transformed that. or how about with food, right? we know that there is a whole opportunity to build a whole new business empires based on plants rather than animals with

veganism. and that is a great entrepreneur story. and last -- carol: i like this story a lot. joel: what do you like about it the most? carol: well, women led businesses, there are not enough. joel: there is not enough. they just had a massive new round of fund raising from sequoia. there is a co-working space to help more female vendors. this is a startup co-working space to help amplify more female run businesses. carol: definitely stuff to watch in 2019. thanks. coming up, investing for good. our etf's that aim to better the world holding up their end of the bargain? and amazon has a problem of too few people to deliver their packages. how they are tackling the problem. this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i am carol massar. join jason kelly and me for bloomberg businessweek every day on the radio 2:00 to 5:00 p.m. wall street time. you can also catch up on our daily show. just check out our podcast on itunes soundcloud and bloomberg.com. and you can find us online and on our mobile app. this week's special focuses on good business. the story in the finance section dives deep into an investing trend that claims to be doing good. esg stands for environmental and social governance, in other words, funds that promote a better world. in fact, they are often not what they are cracked up to be. we spoke with rachel evans. rachel: you'll find that some of these things are not as much oriented with of environmental and social items as you think. we found one fund that had exxon mobil as its largest holding. it is also the one being sued by the new york regulators for lying to its shareholders about climate change costs, so it has a few issues on the environment

and governance side. exxon mobil is in there. phillip morris, the cigarette maker, is in there as well. and what we look at in this story is for an average retail investor that wants to do good with their money, is this really what they expect to be buying? carol: and to be fair, these companies might be moving ahead on sustainability issues,, but you would not normally think of these companies when it comes to investing and that is part of the problem. how you define esg? there is no specific set of rules. >> one of the guys i spoke to for my story said there is no true north. i think that is true. there is no true rule for esg. and it is how people look at esg and sustainability. it is good for people to be thinking about it and what constitutes esg. with the way this inevitably evolves, you have some products that are high esg and others that are low esg.

when you talk to index providers, they are aware that some products are more dialed up or dialed down. jason: and that is an important distinction. you look at this through the lens of etf's, that is how so many people are investing now, etf's seem to be set and forget it strategy. a lot of investors trust their providers to pick the right stocks. they feel good about the idea that this is an esg friendly investment. yet, here we are. how does this happen where the blackrocks end up with these baskets of stocks that don't pass the quick smell test? rachel: looking at the evolution of etf's more broadly over the years, we have seen this race to the bottom of fees. fees have gotten so low. i think fidelity came out with a no-fee mutual fund index tracker this year. that is incredible. blackrock needs to compete with this by coming out with

differentiated products. that may be some slicing and dicing of the market in a slightly different way. in that context, you can really see the growth in esg funds with that context. we have seen these products grow significantly over the last three years. i believe more than three quarters of products have been launched since 2015 in the etf world, so it is a new phenomenon, and assets are starting to gather to the funds, which only encourages more product creation and innovation, and they hope that some bring in fees. carol: esg assets are kind of small compared to all the assets under management, but those higher fees make it lucrative for financial firms offering them. >> we did a back of the envelope calculation. if you have the cheapest stock etf you could find, you may be generating about 3000 for every

$10 million that you have invested in the fund. for an esg fund charging 45 basis points, you're looking at 45,000. a big difference. about 15 times more. for the esg funds versus the stock funds. jason: one of the trickiest things, as carol alluded to, how do you measure and track it? it does feel like governance is actually a little easier to get your head around and measure than maybe the "e" and "s." why is that? >> the "s" is particularly difficult. very, very challenging. environmental, maybe you look at emissions, pollutants, that kind of thing. but governance comes easier to look at the office and see how many minority and women are on the board and look at governance in that respect. there is also an argument that governance is the first place you should start with esg. because from that, everything else flows. it's one of the more measurable things, and it tends to be the larger things that investors actually care about. you may have retail looking at

the environmental side with low emissions, that kind of thing, but on the institutional side, they are still thinking about their bottom line at the end of the day. they want something that matches the benchmark and they can see the value that comes from having a well-governed company. carol: here is one more point of view on esg from the kkr global head of impact ken millman. this week he told jason his company is committed to investing in good, and anticipates good returns from that strategy. ken: we are focused on things like how we help the world mitigate and adapt to climate change? how do we harness the fourth industrial revolution, which at the same time can make us smarter, can make us more mobile and make our operations more sustainable and safer? but it is going to require hundreds of millions of people to be retrained throughout their lives. there are critical needs like those needs. how do we create a way to reduce the amount of waste we generate and the food we eat? or in other ways we live? there is a huge amount of capital needed to address those challenges, so i think one of the things that is really important is for lots of folks to invest behind impact. in our case, we define it as

focusing on companies by their core business model, what they sell, their products, their service -- is addressing one of the united nations' sustainable development goals. those goals were developed in a way designed to mobilize government, to mobilize the social sector, mobilize the private sector, and mobilize investors. we hope to learn, not just from the folks you mentioned, but from people that have been for years investing around impact and do our part to contribute these critical needs. carol: coming up, amazon success brings unintended consequences. too many packages and not enough drivers to deliver them. this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i am carol massar. you can also listen to our daily program, myself and jason kelly, on sirius xm, and in new new york, boston, washington, d.c., a.m. 960 in the bay area and in london, and of course on the bloomberg business app. amazon's rapid growth has changed the face of retail and created a trillion dollar empire. but building a one-of-a-kind company comes with one-of-a-kind challenges. we bring in bloomberg's taylor riggs to take a look at amazon's distribution centers. they are all over the place. taylor: oh my gosh. this is what i love the bloomberg terminal because you can pull up the share price but this is about the distribution centers. we have the function here, like we have everything here in blue, distribution and warehousing. and carol, as we know with

amazon, massive expansion here. how do you get packages from point a to point b? interestingly enough, shipping is a rising, growing cost of amazon. it is growing faster than online sales. they are trying to take the playbook out of fedex's playbook by hiring some couriers. as we know, there is a driver shortage. this is just an issue that amazon is really going to have to contend with. carol: it is a big deal to contend with. it is a big deal. thank you. great chart. we just saw where the company's warehouse centers are located. which brings us to another story in our technology section on amazon this week. it is about getting packages, as taylor said, from point a to b. >> what jumped out to us was it was five years ago where jeff bezos was on cbs "60 minutes" and envisioned this future and gave a prediction of maybe five years, where drones will be delivering packages from the sky. we are at that five-year mark, and this past summer, amazon issued this call to arms to

entrepreneurs, basically encouraging them to buy or lease vans and create small businesses delivering amazon packages. so basically what amazon is doing is copying the fedex model of creating this network nationwide of independent careers that are counting on amazon packages to make money for their businesses. and what jumped out at us is, yes, five years after this big prediction of making delivery drivers obsolete, we have this world's biggest e-commerce delivery company needing thousands and thousands of more drivers, just like pizza hut, just like the post office, just like the milkman of yore. jason: right. it is so interesting because this story really reminds us about the business models that exist. fedex and ups are taking different approaches. remind us how those companies

work and what may amazon may do going forward? spencer: well, amazon and fedex go more of this asset-light model. amazon does not want to hire the people directly or buy the vans. so instead it is relying on this network of entrepreneurs. keep them kind of small so it has price negotiating power over them, and let them do the dirty work of recruiting, hiring and retaining, which can be costly, and also maintaining the fleet of vehicles and buying the vehicles. the alternative would be like ups, which employs all of its drivers, and buys the vans, owns the fleet and maintains it, takes those costs on itself. and a big differentiation we are seeing is how much drivers earn. so ups has many union drivers that could earn $40 an hour, not including overtime, whereas the postal service median postal carrier makes about $57,000-$58,000 a year. and these carriers for amazon will make anywhere between $15-$20 an hour.

carol: is this a reminder that, we think about amazon and they increasingly talk about going high-tech and their cloud business and so on and so forth, but in order for them to do what they need to do, their bread and butter to some extent, they have to have people deliver packages. spencer: their business has grown so much, and it has grown faster than the technology has advanced. they need to rely on the old guard model because it is the only thing they have right now. whether the technology is in place with drone deliveries, the regulations are not there, so there are the speed bumps, and to keep pace with the demands at the moment, they need a lot of delivery people. the fact they are recruiting businesses and enticing people to invest money makes this like it is not a short-term situation. carol: coming up, lloyd blankfein should be taking a bow for leaving goldman sachs, instead taking heat over a scandal.

also, the dallas mavericks, cleaning up the organization's front office culture. this is "bloomberg businessweek." ♪ place, the xfinity xfi gateway.

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♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. still ahead, a pair of new ceos. one trying to redefine an iconic watch brand, and another cleaning up the dallas mavericks. we kick it off in the finance section. 2018 is wrapping up on a negative note for goldman sachs. the bank is facing investigation over its role in the scandal involving charges of

embezzlement and money laundering in a malaysian state investment fund. lloyd blankfein stepping down at the end of september. he will retire as chairman of the company at the end of the year, and the controversy is casting a cloud over his legacy. max abelson told us more. max: i would not have thought we would be sitting at this table as lloyd blankfein leaves the firm, talking about this huge scandal that's dented his reputation on wall street. this is heavy stuff. it's a story about malaysia and investment banking and alleged bribery but also a story about the things we care about the most in bloomberg, which is money and power. it comes down to how wall street makes money and how people with it wield it. carol: governments often raise investment funds. this is not a surprise or usual, but tell us about this fund. the origins of it. max: definitely. we can go a step further back

and talk about how goldman sachs, lloyd blankfein says we need to beat goldman sachs in more places. and as the former prime minister of malaysia was rising to power, tim weiser was this young, handsome german banker married to a former model, apparently quite likable, sort of teased as dr. leistner because he apparently had a phd from a fly-by-night school, we think, and he was rising in asia, specifically in malaysia. he was making friends with billionaires, getting on deals, at the same time najib was rising as prime minister. najib basically said to goldman, gave them thumbs up to become a more powerful wall street entity in malaysia. it was the equivalent of the sec saying you can operate here. as that happens, tim wisner through these connections. they got a state fund to give them a ton of money to raise

bonds. >> to give goldman? >> yes. known as 1mdb. so they raised millions of dollars, and goldman got $600 million, which is a lot more than what you normally make from a deal like this, to help the fund raise that money. that's where the trouble starts. carol: why did it get more fees? than is typical. max: goldman would say it's more than just fees. it's also commissions. that's the rub. tim leistner isn't a random guy. he was a partner at goldman sachs. he has told the federal government, he has pled guilty to bribery charges and has told the federal government, basically said that this was a bribery scheme. jason: what becomes clear, as the story over the past few months, especially because it went away for a while, we weren't paying that much

attention. you wrote about tim leistner a long time ago. it's only been the past few months, and during this management transition at goldman sachs, where lloyd blankfein is standing aside, and solomon becomes the ceo, that this scandal comes back in force and we see it reaching the highest levels. talk about blankfein's role. max: that is an important point. what is happening here really does feel like something different. timing is one of the reasons why. lloyd blankfein said to his colleagues, when things are good, you don't want to leave. when things are bad, you cannot leave. but he said, it feels like the right time. that's what his memo said. only a couple of months ago. now it's fair to say things are going wrong. if your lloyd blankfein, this is what you do not want. you had -- his own fellow partners questioning. what is interesting is they seem

to talk about it not as this funny soap opera in malaysia but something that has to do with new york. how high up did the involvement go? what were the reservations? why were reservations ignored? is this symptomatic of the way goldman made record profits over the last few years? those questions are coming from inside the house and that's got to be nerve-racking. carol: and outside, you have u.s. regulators, u.s. prosecutors, you have the sec continuing to ramp up their investigation into goldman and what happened. max: listen, if goldman sachs can end up paying $550 million, which was a record fine, and that's all that happens, lloyd blankfein will be so happy. and let's not forget, by the way, lloyd blankfein's successor is a man named david solomon. david solomon comes from investment banking. he was the co-head of global

investment banking when this happened, so i think there's nervousness that this not only will color lloyd blankfein's entirely you see -- and when you look at the goldman stock price from when he started to now, it does not look fantastic. carol: what does goldman say about this? max: goldman sachs has said the whole way through that it is a rogue employee. they're going to vigorously contest the charges. when we asked the goldman sachs spokesman for comment, he said, blankfein just got a standing o from other corporate executives from a cloud that includes mike bloomberg that owns bloomberg lp, and says that's more meaningful than backbiting and second-guessing from former employees. carol: while lloyd blankfein heads out as his company is facing controversy, this week's cover story highlights the ceo taking charge of an nba organization dealing with fallout of its own.

the dallas mavericks have a me too mess to mop up in the front office. she comes from at&t with a mandate to change a toxic culture. we talked to jim ailey, who put together this special section. jim: we do this every year for five or six years. the idea is, after 11.5 months of finding badness -- [laughter] carol: it's kind of everywhere. jim: yeah, the world is full of it. we want a reminder that people try to do well by doing good. the idea is to try to have as much sweep as we can of these basic businesses that try to do something right. carol: the first one is a great one. this is the cover story this week. you take a look at cynthia marshall at the dallas mavericks. tell us about this story. jim: as you probably know, the mavericks had a very big scandal broke last february when a

sports illustrated post showing how toxic the culture was. months later, the owner of the mavericks, mark cuban, who has admitted he was a participant in creating the culture of the place that was toxic, we realized when they hired a former at&t executive, who was the chief anniversary officer -- adversity officer at at&t, she just retired, highly respected and in a situation like this, you wonder if they are serious about performing. they conducted their own internal investigation. the team decided to pay $10 million in restitution on their own to domestic violence programs, prevention programs. jason: as you point out, usually the cap is $2.5 million. jim: that's a fine. they voluntarily decided to do this. it was a sign of seriousness. the fact that they got a really accomplished executive to take

over as ceo was something. the ceo's name is cynthia marshall. she took over after that story came out and when the place was in full crisis mode, and has had a huge impact. carol: what is the impact? what is she still hoping to do? jim: the main thing is people feel comfortable, according to our interviews, people aren't embarrassed to say they work with the mavs. briefly, i think they were. there was a woman we quoted who said, after the stories came out, she said she worked for the dallas mavericks. you're a woman and you work for the mavs? ugh. there was an attitude there, and one of the hardest things she had to do was shift the culture. there was an attitude there, something along the lines of there are 10,000 people who would take this job, so don't complain. her response to that was, there are not 10,000 people that want to take this job. if anything, it's like a thousand. and by the way, who cares? let's focus on the 140 people that work here.

carol: coming up, an inspiring startup story, doordash was at death's door a year ago and now it's thriving. we will talk about the company's turnaround. this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. join jason kelly and me for bloomberg businessweek every day on the radio from 2:00 to 5:00 p.m. wall street time. you can also catch us on our show by listening to our podcast on itunes, soundcloud, and bloomberg.com. you can also find us online at bloomberg businessweek.com and our mobile app. in the technology section, a couple of stories featuring boldfaced names looking to do things differently.

dreamworks founder jeffrey katzenberg and tesla's elon musk. we caught up with our tech editor. jeff: since 2012, over the handful of years that i have -- that elon has been talking about this, growth in urban areas in the u.s. has fallen in half while growth to suburban areas quadrupled. carol: is that wild? we keep hearing people want to live in major cities and that is not the case. jeff: research now says even millennials that are having kids are looking to move out into more of a yard and fence situation, not just because they are priced out of cities, but they want to live further away from everybody. [laughter] jason: and so what did we take away from the little tour that elon gave? we felt like there were mixed reviews, what people saw in los angeles. jeff: there were really setbacks. this was originally supposed to be a week ago, but they had to hold it off because the stuff

was not ready yet, and what was supposed to be a much more ambitious look at how the emerging l.a. hyperloop could work, became more of a tour of the equipment they've got available so far as they build the tunnel. it's something that's in the ground, something they didn't have a year ago. jason: the tunnel is there and the technology exists. we just don't know what it's going to do. staying in los angeles, jeffrey katzenberg, well-known figure in entertainment, he has a new company, wonder co. because it is 08, there are no vowels. what are they up to? it's a hybrid type shop. jeff: that is right. with assistance from meg whitman from hp and other folks from the tech industry, it is katzenberg's big shot to make it in the valley, his sphere of influence. his startup accelerator of sorts, wonder co., has raised about $800 million now to sort of plunge into various, mostly entertainment related, tech initiatives. one of the biggest is his own startup, which is focused on short form video that's a bonanza on the internet now. all of that is expensive to produce the content at the

levels he wants. he tells people it has a pretty good shot at competing with longer form like netflix. carol: another company in our technology section is door dash, a delivery startup that turned its fortunes around. the ceo was a guest on bloomberg television this week, and he told emily chang about his company's soaring revenue.s is . we have tripled sales in a year. we are north of $1.25 billion in revenue. there are maybe a handful of consumer businesses that can say that, and no one can say they are growing that fast. in the restaurant delivery business, we are getting shares faster than everyone, growing faster than everyone, and on track to be the largest platform in the space. emily: how do you translate that

into profit, including overhead? tony: actually, markets are profitable. we've had a playbook of turning businesses from investment mode into growth mode into cash flow positive. and it's only after that playbook was developed that we decided to raise financing in march and later in august. emily: we had the head of uber eats on earlier this week, who also said business is growing faster than they expected. they are doubling down, exploring groceries delivery. they have deep pockets now, too. how do you stand up to the competition? tony: we already have. emily: what are you doing to differentiate yourself? tony: a lot of the work that led to the results in 2018 were on track to be the largest delivery space in the u.s., that happened before 2018. since day one, we have focused on the merchants by building more services like door dash

drive, which allows merchants to deliver their own orders, we signed more merchants than anyone else. we have 90% of the top merchants signed, more than all of our peers combined. we are also delivering other types of meals. we started with food, which is the hardest in terms of perishability. but our partnership with walmart started in april and reached over 500 stores, and we deliver the vast majority of walmart's groceries. carol: straightahead, breitling is under new ownership and the ceo is making changes. plus, luxury can cope with consciousness. pursuing good is the theme of this week's pursuit section. this is bloomberg businessweek"" ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. you can also listen to our program on the radio, on sirius xm, 1130 in new york, 106.1 in boston, 99.1 fm in washington, d.c., a.m. 960 in the bay area, in london on dab digital, and of course on the bloomberg business app. in the business section this week, when a private equity firm cvc bought breitling, it raised eyebrows in the industry. the company was profitable, but sales were stagnant. under the new ceo, it is reshaping its brand and retail strategy. bloomberg managing editor for global business is telling us what makes breitling tick. >> george, he has french ancestry.

he was at richemont and was there for 17 years and rose through the ranks. everyone thought the top job of richemont is within his grasp. then, a year after seeking broader brand, they started talking and started asking him, what do you make of this brand? where would you take it? what does it need? what does it lack? and then one thing led to another. he said, why don't i do it myself? one big reason for him to make that transition was that he owns equity, about 5% of the company. for him, the way he told us in an interview, it was a great incentive because he can be entrepreneurial about it. he can watch the company grow, ideally, under his stewardship. and that to him, after 17 years at richemont, seemed like a new

step to take. he is in his 50's now. that seemed like the right move. carol: when i started reading this story, all i could think of was the old breitling adds. -- ads. i went on google and pulled up some and it was like women in tight clothes, scantily clad, guys really macho, driving planes. all that kind of things, or flying planes. you are laughing, but that's what it was. they've got to change their image, don't they? or they are changing their image. benedikt: that's one of the first things you notice. it's a well-known brand, but it is well known and for all the wrong reasons. it's a brand known for chunky, fairly busy watches, the kind of watches favored by the top gun guy, someone who socialized in the 1980's and 1990's, someone who might not be immune to the alerts -- alures of objectified women. and that is not the time we live in anymore.

people look at these adverts and the kind of image presented to them, and think that's not really the kind of product i want to get behind. he noticed that and realized this is something we need to do. you can see it in the kind of people he recruited for his advertising campaigns, the sexist ads are out. they are gone. he's brought in a fresh crop of people. brad pitt is one of them. he's a brand ambassador. charlize theron is another one. adam driver for the younger generation of people. that's what they call the cinema squad of their brand ambassadors. they try to be sort of younger, outdoorsy, digital, not sort of your dad's watch kind of company anymore. carol: earlier, we looked at this week's special issue on good business. in the pursuits section, we returned to social responsibility and ethical business practices. jason kelly and i spoke with editor chris rouser about luxury

brands and experiences that make a positive impact. chris: increasing priority for travelers, especially millennial travelers, is to do good while you are doing it or not have a huge footprint. what we did is look through a range of products and experiences that are run by companies where consciousness is a key part of the business. we started with travel. we found six resorts. we didn't find them, this is resorts we've known about for a while. it's not just a resort where they make charitable donations. it is people making an investment in the communities around them, and making serious efforts to be carbon neutral or have a low footprint, environmentally. carol: take us to, i don't know, indonesia. chris: the resort is one of the reasons why we wanted to do this piece because it has been around for a decade now. it's just really a standard bearer in this sort of field of really environmentally thoughtful resorts.

it's brought the area of indonesia that it is in to the luxury map. it's one of those places where i try to find it on google maps, i had to zoom in and zoom out. carol: you say it is a four hour flight from jakarta, and then a four hour boat ride, as well. it's a long trip. jason: you are committed. chris: you are committed, and it is one of those places where you feel like you are in the middle of nowhere, which you are. carol: which i love. chris: it's surrounded by a marine reserve. you can see gigantic seahorses. you can see manta rays wrap their fins around a volkswagen beetle. part of the reason you can do that is because they protected the ecosystem by investing so much. it's a cool place to go. carol: i've gone on trips to costa rica, and you plant a tree

when you're done, but this is taking it to a higher level, the kind of trips in terms of their impact on the environment. chris: yeah, so around there, the biomass has increased 600%. -- 650%. they are making a big difference. it's mostly ecological stuff, but in some places, it is workplace training. these resorts are training people in the hospitality industry so they have jobs. it helps the resort because it's staff for them, but it gives people lasting jobs they can teach and take elsewhere. jason: a little closer to home in new york, churchill wild in canada was one that jumped out at me, in part because of the 100% success rate at seeing a polar bear. that's amazing. chris: do we need to fact check this? do i need to call this week? carol: bob jones going to call? jason: can you promise me you'll see one tomorrow? chris: churchill wild is on the hudson bay in arctic canada, and it's a small resort.

it's got amazing trips where you can trek out, you seek polar bears, and they do donations to local charities. they pick three initiatives every year, and that could be anything from local girl scouts to making itself fossil fuels free, so what they do every year is a big part of how they operate. carol: "bloomberg businessweek" is available on newsstands, also online at bloomberg.com, and our mobile app. and you can find more stories on bloombergbusinessweek.com over the weekend. check that out and check out the daily business week podcast with jason kelly and myself which is available on itunes, soundcloud, and bloomberg.com. this past week, we spoke with crystal rose. she's using blockchain for messaging. next week on bloomberg's "bloomberg businessweek," tv and radio, we revisit the bloomberg annual summit, conversations

about what to expect in 2019 in business, finance, politics, and luxury. for jason kelly, i am carol massar, for more bloomberg television starts right now. ♪

paul: welcome to daybreak australia. i'm paul allen in sydney. kathleen: and i'm kathleen hays. ♪ paul: here are the top stories we are covering in the next hour. moving the markets? that jay convince powell is safe at the fed,