The Best One Yet - 🧢 “Merch Monday” — Aesop’s profit shampoo. Levi’s denim drama. The Pope’s fancy AI.

Episode Date: April 10, 2023

L’Oreal acquired Aesop, the Australian soap and shampoo company, for $2.5B because they sell the most profitable physical thing we’ve ever seen. Levi’s stock dropped 15% in one day last week because when the economy drops, so do your jeans. And if you’ve seen images of The Pope and Harry Potter looking fancy, they’re AI-generated — because artificial intelligence can go from zero-to-artwork in 3.2 seconds.Check out our new website: tboypod.com$LEVI $LULU $LRLCY $LVMUYFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. Welcome back. It is Monday. A big Monday. April 10th. And today's pod is the best one yet. Nick and I whipped up a tea bar.

Jack, first story. What do we got? What does a French luxury company like L'Oreal love the most? What do they love, Jack? A really expensive bottle of anything. So L'Oreal just acquired ASOP soap. The biggest profit puppy we've ever seen. For our second story, we're looking at Levi Strauss.

The San Francisco-based denim stock just fell by 15% in one day. Because your jeans, they're wrinkle-proof, but they are not recession-proof. For our third and final story, it's Gucci Pope and Valencia Harry Potter. They both went viral last week. Because AI isn't just an assistant, AI is now an artiste. But before we hit that wonderful mix, Yatties. Stuck the landing on that intro, Jack. Looking fantastic. I love this mix.

Oh! Look what you did. there, Jack. Look what you did there. Yeties, Jack, is putting on something that I have never seen before and I love it. Are you picking up what I'm putting down over there? I'm grabbing it, I'm eating it, and I'm throwing it down like shouter, man. Yeti's

A-B-L-E, A-B-L-E, A-B-L-E, what does that stand for, Jack? Always be launching everything. Always be launching everything. That's what we do. Yeties, today, we are launching t-boypod.com. We repeat our brand new spanking website, T-Boy Tboypod.com.

T-boypod.com is your location for all things T-Boy. We've been working on this for months. It is literally the best one yet, isn't it, Jack? If you want a shout-out on the show. Go to T-boypod.com. If you want to send in the best fact yet, go to T-boypod.com. If you want to listen to all our episodes,

play our weekly quiz, and see what Nick and I actually look like. Go to T-boypod.com. But the biggest drop of them all. The highlight of the website. Do you want to wear some T-boy merch? Then go to t-boypod.com. The best merch yet. We got a hat.

We got a t-shirt. We got a crew neck. We got a fancy embroidered t-shirt. We got it all. T-boypod.com. We put together an entire apparel kit for you. We're talking cute tops and slamming salmon people. That's what we're doing.

Yeties, Nick and I tried out 14 different t-shirts before we were satisfied with this merch. Besties Jack, test drove 12 different pairs of sweatshirts before we felt fulfilled. If it wasn't soft enough, for Dalina Duncan. Yes, Jack. Then we're not putting a T-boy logo on it. No logo, no go-go.

So stop the show, grab your phone and go to T-boypod.com. Pause the pod. Hit up the new website. Nick, are you ready to celebrate the win? Jack, you look fantastic

in that thing. I've never agreed more. The takeaway? Go to tiboypod.com. Yeah, we didn't really prepare one. Jack, let's in our three stories. 15 years before this song, two boys from the northeast met in the dawn.

They had an idea to cause a cultural storm It's the best one yet, but the best is a norm Jack Nick, that's it, this 50% that's a fat tip Tea Boy City on your at list If you know, you know, cause we're ready to go We can't wait no more, so just start the show Start the show

For our first story, L'Oreal Just made its biggest acquisition ever $2.5 billion for ASOP, The Soap, Shampoo, and Beauty Brand. And we may have found the most profitable, product on earth in ASOP. But Jack, before we jump into all that first, how can you tell if your date night is actually a special date night?

If he wears a jacket, if she wears that black dress? Jack, I wish that were the case. But it's actually, if you go into the restaurant bathroom and you see if that restaurant is using ASOP soap. Oh, I know what you're talking about. The little glass brown bottle with a minimalist white label, ASOP hand soap. Asob handsop. It's like if you bottled the show's succession and stuck it in a shampoo, that's Asov. It'll clean your hands, exfoliate your hands, and massage your hands at the same time.

Honestly, I'm actually full disclosure. I'm using the hair product right now and it's got three different types of nuts. I don't even know how to pronounce it. We're talking about Australia's Aesop Cosmetics Company. Yes, we are. 36 years old, $500 million in sales. This is like Michel and starred cream soap and shampoos. And Nick, if you want some conditioner and shampoo with that hair product, you better put together a pitch deck find a venture capitalist and raise some money. This product is expensive. So sharks, I'd love to buy some new hand soap, but first I'll need a check.

ASOP offers customers two value propositions. Here they are. Aesthetics and vegan. That's what they do. Think avocado toast, but for your skin. Yeah, and here is the ASOP shocking news. L'OLE just beat out LVMH in a luxury bidding war to acquire ASAP for two and a half billion dollars.

We're talking about the largest beauty company on Earth. L'Oreal treating itself to some A-Sop. L'A. L'Oreel just bought a whole bunch of A-Sop for that medicine cabinet. Now, here's why Jack and I were fascinated with this story. L'Oreel got to be the biggest beauty company on Earth by following the billionaire brand playbook. The billionaire brand playbook. That's what they call it.

How does this go down, Jack? L'Oreal identifies smaller brands that are at the intersection of luxury and clean ingredients. Luxury and clean ingredients. Those are two mega trends that are just fantastic tailwinds for a business right now. If L'Oreal finds that company, they acquire it, stick it into the L'Oreal distribution network and then grow sales beyond a billion dollars. Like we were saying, it's the billion dollar brand club. L'Oreal has done this with Mabeline, with keels, and with Garnier fructice. All of those brands joined the billion dollar sales club after L'Oreal acquired them. SeraVe is a great example. Have you ever used SeraVe's evening and afternoon and morning? skin cream. I'm not cool enough. I prefer to overspend on ASOP, Jack. They got SPF in there. You're

going to want to use SPF every day. 15 all day. Well, L'Oreal acquired Saravet in 2017, introduced the product to China and grew sales by 10x in the meantime to over a billion dollars. Well, with ASOP, L'Op, L'Oréal is trying to do the same thing. L'Oreal is trying to apply the billionaire brand playbook. They're going to introduce ASAP to China, market it to Gen Z, and then double sales to a billion dollars. That's the plan. Cha-ching. So, Jack, what's the takeaway for our buddies

lotioning themselves over at A-Sah? It puts the lotion, never mind. A-Sah is the most profitable physical thing Nick and I have ever seen. Look, Yeti's last week, Jack and I covered Dole. We told you about the fruit company. And what do we notice about Dole, the pineapple, mango, avocado fruit company, Jack?

Okay, Dahl was the least profitable company we had ever seen. Dole was making, like, pennies. on every pair, no profits. But ASAP's luxury shoeps and hair products, they're the opposite. They make almost a dollar of profit on every dollar of sales. Okay, we should sprinkle on some context here. ASOP is selling those. Oh, I'm sorry, by the way, Jack, we should say ESOP. I actually think the pronunciation's ESOP. Really? An Australian Yeti pointed it out

the other day to us. Esop, you know those little pump bottles of a hand soap next to a faucet? Yes, know them well. I know what you're talking about. ESOP markets them as a luxury product and sells them for $39 a bottle. Get this yetties. According to the financial times, ESOP enjoys 90% margins. What does that mean, Jack? 90% of the sales of that hand cream is pure profit. 90% of every is profit. In other words, it costs ESOP 4 bucks to make that soap and they sell it for almost 40 bucks. And because of that, ESOP soap is more profitable than tech software. ESOP's profit margins are double Apple's products and they even beat Google's software. ESOP's profits are more profitable than Google. So ESOP's acquisition reveals just how powerful a luxury brand's pricing power can be.

ESOP's soap is just one of the most profitable things we've ever seen. For our second story, Levi's jeans just saw their stock drop 15% in one day. If you thought denim was recession proof, I'm going to have to talk to your manager. We're going to have to speak to the manager here. Now, Jack, should we share that lesson that we learned from Z. Zoolander. You want to share that thing, man? Don't serve your boss a steamy latte if his belly's bloated. They're going to get bloated. Your boss will get bloated if they have too many lattes. But, Jack, what was that other lesson we learned from Zoolander? We learned that you're only as good

as your latest collection. Yeties, you are only as good as your latest collection. Well, Levi's is a 170-year-old company that was invented during the gold rush for goldmires. Yeah, Levi's is pretty old, but all that analysts wanted to know on their earnings call was what's next? Yeah, you're historic and all. But, What about right now? Jack and I noticed that on the earnings call, the CEO of Levi's kept getting questions about their newness. What is that? What is newness? Four times analysts asked Levi's about their newness. It's not even a word. Yeah, I'm checking Miriam Webster. Yeah, it's not a word. It's not a thing. Newness. Well, the CEO's response was balloon fit wide leg jeans. Balloon fit wider legs. Levi's is adding extra roomy to their genes ASAP.

The newness that Levi's is offering is genes that feel more business class, less economy. Plenty of room. Skinny jeans are dead, so the new king of the closet is comfort. But funny timing. Because last month we covered Lulu Lemons earnings. Yes, we did. The princess of the yoga pants. And how did Lulu do, Jack?

Lulu stock jumped by 15% in one day after a big sales surge. On the other hand, Levi's stock just dropped 15% after their earnings. Now, part of this is that denim costs are jumping as much as the price of eggs. Yeah, Lulu, they'd never done denim before. But all that Levi's does is, uh, yeah, like, Levi's only does denim. So denim inflation is one issue. The other issue is that people are leaving Levi's for leggings instead.

Because Jack, what's even more comfortable than a set of wide leg jeans? Leggings. Any pair of leggings. Honestly, it's leggings. So part of the problem is the price of denim. Part of the problem is switching over to leggings. But the other problem is our takeaway. So Jack, what's the takeaway for our buddies over at Levi's?

When the economy drops, so do your dreams. Yadis, we've talked about industries that succeed in a race. recession. Like we've told you about Uber. Uber, it's a downturn diva. We've also told you about recession-proof products like Elf Beauty's lipstick and crispy creams donuts. But denim is no downturn diva. Jeans, yeah, they're wrinkle-proof, but they are not recession-proof. And history is our lesson. After the 08 financial crisis, gene sales fell badly in the recession that came after. He didn't replace old jeans in your closet. Maybe you shifted to sweatpants instead. You wriggled out of Wranglers, you let go of your lees, no more made well. And that is the

same trend we are seeing today in Levi's earnings. Right now, many people are buying cheaper jeans or no jeans at all. Because when the economy drops, so do our jeans. And now a word from our sponsor, Robin Hood. Golf at 11 a.m. Pickleball by two. Got to see the grandkids, but I don't know if we'll have enough time. You're probably not thinking about retiring to Del Boca Vista quite yet. But you could be thinking about how to afford retirement. So the newest product from Robin Hood, the IRA. The only individual retirement account, the 1% match on every eligible dollar you contribute every year, limitations apply. In an IRA, your money has tax-deferred or tax-free growth potential.

So older you can maybe play pickleball at 2 o'clock. To get started, go to robin hood.com slash T-boy and get your first stock for free conditions apply. That's robinood.com slash TBOI. All investments involve risk, contributions to and withdrawals from IRAs may entail tax. Consequences, Robin Hood does not provide tax advice. Robin Hood Financial LLC, member SIPC. Our third and final story, Gucci Pope, Valenciaaga Harry Potter, and the internet are getting

their first taste of AI artwork. With generative AI, we can go from zero to artwork in 3.2 seconds. Okay, last month, Jack, the internet, it lit up because the Pope, the Pope kind of got, would you say the Pope got his groove back? Did you see the pictures of the Pope wearing that belted, white, fabulous puffer coat? Yes. It looked like the Catholic Church got sponsored by Canada Goose. Good for you, Vatican City.

Not too shabby, the Pope walking around on a Montclair puffer. Unfortunately, that picture wasn't real. It was created by some guy using an AI image generator. Hey, Adam, can you throw up a picture of the Pope and a puffer on the screen? We're looking at it right now. It's on the video. It's a deep fake. It's so real looking that it tricked us.

It looks so real. Okay, that's the Pope in a puffer jacket. The Pope walking around looking fancy. But then, Jack, what was that other video that went viral last way? It was hilarious. It was a bunch of Harry Potter characters, but, as if they were Balenciaga models. It was like AI generated videos of Hagrid, Ron, Hermione, Dobie,

just looking fantastic, weren't they, Jack? But the videos of Hagrid, Ron, Hermione, and Dobby and Harry, they had chiseled cheekbones and a fierce bossy gaze. Yeah, it was the whole Hogwarts cast, but they were like blue steel mode. All of this Yeties were specific forms of artificial intelligence. It's called Generative AI. Generative AI, and this is the kind of AI that you should get to know.

Generative AI, Like ChatGPT is artificial intelligence that can generate or create brand new content. Now, so far, Jack and I have talked to you mostly about text-based AI, like ChatGPT. Right. ChatGPT, it puts words together in human-like responses to your questions. Or like Microsoft's Bing copilot. It generates Word docs, spreadsheets, PowerPoints. But generative AI is not limited to just text.

No, it is not. The output can also be images or videos or music. Now, Jack, I know you have. hate the word content, but it feels like we're describing something that creates a lot of content. Content means anything. Content, the definition, is anything. Well, this generative AI can create pretty much any form of content. This AI isn't just going to answer some boring question you have about accounting. No, it can do a lot more. It can generate an image that looks like an oil painting personalized of your face. You could get a portrait and put it above your fireplace that AI made for

you. And that is why generative AI is that. the number one focus of venture capital right now. Jack, the numbers? The average valuation of a generative AI startup has doubled in the past year. To $90 million. So Jack, what's the takeaway for our buddies over in generative AI? Generative AI is the first creative robot. It can go from zero to artwork in 3.2 seconds. Yet he's all the focus on AI. It's been around like menial tasks and just answering questions. But Gucci Pope and Balenciaga Harry Potter, those are signs that AI can be an artist too. And we're seeing examples of this in the real world. Spotify already launched an AI DJ which generates playlist for you just like Diplo. Instagram could generate your

headshot like a photograph and then send it to you to put in a picture frame. And pretty soon YouTube will serve you a personalized rom-com just for you. That's why generative AI is so exciting but also scary. This thing can go from zero to artwork in 3.2 seconds. Jack, can you whip up the takeaways for us to kick off the week? ESOP was acquired by L'Oreal because it can sell $4.00 for $40. ESOP might be the most profitable thing we've just ever seen in the real world. For our second story, Levi Stock fell 15% last week on news of profit shrinkage. When the economy drops, so do your jeans.

And our third and final story is Gucci Pope and Balenciaga Harry Potter. They show that AI can create images and videos too. Generative AI. It is the first creative robot. Zero to artwork in 3.2 seconds. Now, time for the best fact yet. This one sent in by the birthday girl Savannah Westwood from lovely Orlando, Florida. Flowers, they could be expensive. You think your bouquets are expensive, though, but wait to hear this one.

The most expensive, most valuable, priciest rose ever sold? Jack, ding, ding, ding, what price are we seeing? One rose was sold for $15.8 million. $15.8 million for a special, very, very, very, very. particular type of rose. A very particular type of man is David Austin, who was a rose breeder and he spent 15 years and $5 million breeding a rare variety of rose. He called it Juliet. The Juliet. And Jack, the investment, I guess it kind of paid off. He did pretty well, didn't he? He invested $5 million. He sold it for $15 million. This rose thinks it's an orchid.

But this guy also spent 15 years. So I hope we got some time. with the rose before selling it. Yeties, you look fantastic to start the week. Jack, you look particularly fantastic over there in your T-Boy hat and your T-Boy T-Boy T. Yetis, Nick is rocking the T-Boy hat backwards right now, and I'm into it. You like it? I'm like Balenciaga T-Boy, Jack. Look at me.

Look at me. Look at this. Look at that. T-Boy. Yadys, check out T-Boypod.com. We're very proud of the website. We think you're going to freaking love it. Absolutely is the best site yet.

Nick and I, we'll see you tomorrow. We'll see on T-Boy. Before we go, a shout out to Yeti Dan Turchin in Silicon Valley, who created a transcript of this pod using chat GPT. And it wasn't that much different than Jacoby. It wasn't too shabby. Here to artwork in 3.2 seconds. And Jalani and Marlowe and Bowie Maryland are celebrating six years together and two years of T-Boyant together. And congratulations to Kyle Mattson and Tracy Meg, who just had a new baby boy in San Francisco. And Daniel Mosing is celebrating a two-year missionary anniversary.

down in Peru. Congratulations to MP who got a new job in Boston at the Cambridge Health Alliance. And Caleb Randall enjoy that birthday down in Arlington, Texas. And happy belated birthday to Ben Einstein from Los Angeles living in San Francisco. This man's one year older. And his dog Albert just had a birthday too. Albert Einstein, are you kidding me? If you know, you know. This is Jack. I own stock of Levi's and Nick and I both on stock of Apple, Lulu Lemon, Spotify and Robin Hood. And now a word from our sponsor, Robin Hood. Not spending money can be tough.

We're all tempted by that top we just saw on TikTok. Even harder, saving money for when you're 60. But what if you got paid money to save money? Robin Hood Retirement offers the only IRA that does that on every eligible contribution every year. For every eligible dollar you contribute to your retirement fund, they match 1% of it. No employer necessary. Limitations apply.

To get started, go to robin hood.com. T-Boy and get your first stock for free. Conditions apply. That's robin hood.com slash T-B-O-Y. All investments involve risk. Contributions to and withdrawals from IRAs may entail tax consequences. Robin Hood does not provide tax advice. Robin Hood Financial LLC, member SIPC. Yeah, because what's more comfortable than wide-legg jeans? Nothing. Leggings. Leggings.