pricing pressure smoke signals have been
wafting out from earnings conference
calls lately procter gamble coca-cola
both announcing price increases this
week in their quarterly reports
due to higher material costs here's the
macro picture the consumer price index
in march
rose six tenths of a percent year over
year consumer price index is our best
indication
of inflation at the consumer level
meaning what all of you guys pay when
you walk to the store or you buy a car
that's the biggest gain in nine years
while the figure is high
fed chief jerome powell has signaled
multiple times over and over he's not
alarmed
i would note that a transitory rise in
inflation above two percent
as seems likely to occur this year
okay so transitory means it's only
temporary nothing to see here folks
well who is alarmed the business guys in
the real world we thought bring in some
of them joining us live
two top guys in the business world
arnold campbell chairman and ceo the
biggest bicycle manufacturer in the
country
kent international and isaac larian ceo
of
mga entertainment maker of the famed
bratz and lol
surprise dolls uh guys welcome isaac to
you first
jerome powell says prices if they even
rise materially they won't be
big deal and it's it's only temporary is
he right or is he in government
fantasyland
well lizzy he's he's full of it or he's
not in touch
with reality the fact is
that right now prices out of china
are average for toys up 23 percent
there is lack of capacity transportation
is double
double the cost of last year and we have
a factory in usa
we cannot get labor so resin is up
everything is up i think inflation is
going to be up
double digit by the fourth quarter and
if not if if the government doesn't do
anything about it we're going to be like
turkey
well you know that's the thing arnold
the government says it's only transitory
temporary but you've got to tell me what
you're seeing
and what you're doing as far as material
costs and
price hikes for your bicycles yeah
i mean this is a quite interesting time
i've never seen
so many things happening at the same
time i mean right now we've had in the
past
six months to a year increases of
30 percent in aluminum uh 30
or more in steel wow uh my ocean my
ocean freight now
um to from say china to the west coast
has
more than doubled actually we're paying
about fourteen hundred dollars a year
ago
we're paying thirty five hundred dollars
now if we can get the containers
so it's just a huge thing and then of
course we have the other factor
uh the trade war uh which we were kind
of hoping
when biden's off administration uh took
um took office that that would go away
but
um i'm hoping it will but i don't see
anything in the near territory
so i mean we're paying an additional 25
tariff on every single bicycle right now
and every single
icicle that we produce in our factory in
south carolina
so what happens isaac when you go to
your companies that you sell to walmart
target and you tell them i i gotta raise
my prices on you guys
because my material prices are are
getting so high you know i'm holding a
bratz doll the red-headed bratz doll
that that you sent me
what was the price last year and what's
the price prices but
they know the prices are going up
because they import themselves and
that is going to be the reality the doll
that you have the rainbow high leaves
the doll
which was 26.99 probably going to go to
29.99
we're going to take the price increases
but a lot of that price increase we're
going to take ourselves
so we take a hit to our profit but at
the end
the consumers are going to pay for these
and i fought the u.s treasury and the
government for these i mean
do you know why last year there was a
shortage of toilet paper and lizzie
toilet paper shortage well why yeah
because they were using those meals to
print us dollars
that's why so so
shecky green is a what's his job back
but okay so let me let arnold get in
here before we go arnold
what are you hearing from walmart you
are the largest supplier of bicycles
to walmart here in the united states and
what
should what should viewers understand
about what's really going on
separate from what the fed tells us is
going on with rising materials prices
yeah look i mean i i i don't see the
same macro information
obviously the chairman powell sees but
uh all i know in our world costs are
going up and our customers hate it
and um very unhappy when we
uh give them the information but they
know it's true i mean they have so many
different
products with these same kind of
pressures and so they're doing their
best
i know walmart is fighting these
increases and they're not passing on the
full
increases that we're even giving them so
it's uh but it's it's
it's it's tough for everybody i mean
we're we're hoping that the the trade
war terrorists will go away
and but i don't see any let up steel
prices particularly if the new
infrastructure plan goes into effect
arnold isaac uh thank you because i i
really
think it's important for our viewers to
listen not just to people in dc
and due respect jerome powell has done a
great job certainly through the early
part of the pandemic but
what business leaders like yourself are
seeing in the trenches thank you so much
yeah thank you