Welcome to the pulse live from bloombergs European Headquarters in london. I am Francine Lacqua. Guy johnson is off today. Thats get straight to my big interview with philip green, the owner of top shop which has hundreds of stores around the world. Now he wants to expand the brand even further. The Biggest InternationalFlagship Store in new york city. When we put our flag down in the middle of 5th avenue, there is no leaving. It is a commitment. We have to get it right. Our flag store bills Flagship Stores, we try to do something unique. It will probably be slightly more difficult. There are certain things we are not allowed to do. You move a light bulb and they want to come and see you. And we have more and more i am on shoppers. And yet the brickandmortar flagship is where you wanted the. I believe you need flagships. It will build our Online Business as well. Here, look at this store probably half our business is tourists, half local. Fifth avenue i assume will be pretty similar in profile. The floor plates are perfect. 10,000 square feet. The size of this building. Which is huge. If you go to most major cities in the world, there is an bestreet where you want to on that hundred meters. It takes time. Which is why it is taking you over two years. Every time we got to negotiation, to find the premises, we got into all these complicated different words. English, twosh and countries divided by a common line which. We were in the room on a different location with the landlord. I said, youre just inflexible. He touched his toe, said no, i am not. [laughter] that is trying to find a shop in new york. That was billion at top shop owner philip green speaking to me earlier. You will hear more from him in just a few minutes. We are getting pmi figures from some of the other countries. We had france and italy. He pointed to a contraction but they were better than expected. We have the eurozone as a whole, we also have figures from germany. In terms of what we are seeing overall, they are better than expected. Eurozone, they are a little short of estimates but pretty much unchanged. They still indicate expansion. It is a story that we have been telling you over the last couple of quarters. Germany exceeding expectations. The only one in expansion, italy and france and contraction. This is important because of course it is among some of the factors that the ecb will look at. Pmi, just one of the data they are looking at. But the big one is inflation or the lack of inflation, the specter of deflation. Will the ecb cut rates further or not . Find out tomorrow. A lot of banks say they will do so by march. Switzerlands biggest watchmaker swatch reported this morning. John ferro has all the details. Eurozone data disappoints. Swatch does not disappoint. Profit for 2013 up 17 . The stock goes with it up 4 . They had that bump in compensation money from tiffany but the company says they have very good sales for january this year. That is despite plenty of headwinds for the luxury goods makers. We saw a respond missed estimates. Even with that crackdown on big gift giving in china, they havent exactly had luxury sales there but swatch is saying mid to low brands that are going to fuel growth. Expecting optimistic numbers as well this year. They also mentioned currencies. How much of a problem is that . The ceo also told bloomberg the Exchange Rate was the headache. Co the headache. You can see it having a real impact on the company itself. The Central Banks, we know they put a flaw on the euroswiss franc exchange. Whether that turns into another single and altogether. Haven inout that safe switzerland, they want a big trade surplus there. It is still strong fundamental demand for the currency. It is something that Swiss Companies have to get used to. Thank you so much, Jonathan Ferro with the latest on swatch. That stock gaining a touch. It could be a deal worth a billion dollars. Novartis is said to be drawing interest from potential bidders for Human Vaccine data. Bloomberg industries now joins us with the details. Talk to us about the vaccine unit and what is going on with mark. Merck is one possible buyer of that business. What is going on with merck is that there is some speculation they may be interested in doing an asset swap with novartis for the Animal Health business. In both divisions, Animal Health and vaccines, novartis is subscale by their own definition. If you look at the revenues from , it is difficult to know because that is reported in Consumer Health services but you can get some feel for it. They are much smaller than the rest of the competitors out there. Merck is in both vaccines and Animal Health, much bigger than novartis. What is interesting with the vaccine side is that novartis bought for five . 4 billion. The vaccine business them from there. If they get 1 billion for this, the total comes to about 2. 6 billion. There was a couple other assets that they put two other divisions. One really has to wonder, when ifl we know what paper loss anything novartis is taking on the acquisition . The point is that it is still difficult to evaluate. That is because of the scalability. At 1. 4 billion. It is much bigger than the Animal Health business. That is estimated at 300 million. It seems like from what management told us, some of the numbers they have been throwing around during the last earnings call, it doesnt make any money. Or if it does, it is very small. 1 billion would be a great price they could get for it. It comes down to whoever takes this, whether they believe in , whether there is a product that is going to make a difference to growth. When they bought it it was the fifthlargest. It is still the fifthlargest vaccine business and they havent managed to grow the size of it. Also, can whoever buys it get operational leverage . Are the synergies that would make is more profitable for them . We are expecting figures from glaxo later on. We are speaking to the cfo. What is the killer question that investors want to know . With a company this large, you want to know how much impact they have help from emerging markets. We talked all about that a couple of months ago. They have made some commentary along the way. The real question for me is how successful will they be in defending the business . There are a lot of attacks on it. They have some great new products come to market. Pricing pressures, etc. That is what we really want to focus on. Thank you so much for that. Interviewing you our with glaxos cfo later. Dont miss that interview. That is at around 12 00. Here is what else is on our radar. Investment bankers in europe are off to the leanest start to the year in a decade. Fell 22 last month from a year ago. That is according to the research firms. Rsa Insurance Group hired former royal bank of scotland chief executive Stephen Hester to lead the u. K. Insurer. Hester will replace will get an annual ceremony salary of 950,000 pounds. Googles chairman has received a compensation package of more than 100 million. That adds to eric schmitz 10 billion net worth. He is rising up the ranks of the rich as googles share price hit new record highs. Coming up, from google last of the pebble smart watch two bit band, the fashion in tech world are mourning together. Where is microsoft in all of this . We will discuss that next. Also, misery for millions of London Underground workers. A strike, the action starts today. Is matt ng hide Caroline Hyde is monitoring the action from liverpool station. The queues for the buses are more than 100 people deep. Everyone desperately trying to avoid the tube this morning. , is theirtravel chaos opportunity to lower and big business . I will tell you why london transport and the London Underground are trying to woo some of the big retailers in the u. K. And get big sponsors all to get cash in their pockets. Back to you. Welcome back to the pulse live on bloomberg tv and radio and also streaming on bloomberg. Com, your tablet, phone and any Windows Phone as well. Lets hear more from my interview with billionaire philip green, owner of top shop which has 500 stores around the world. A few minutes ago he told us he wants the brands Biggest International flagship shop to be in new york. Now he tells me more about his expansion plans. 2014 will probably be by the time we get to houston, san diego, washington and atlanta. Did you ever think you would be expending so much . 500 stores worldwide, that is pretty impressive. I think it has been a long journey. Overall, we have 3000 stores if we take all our brands. Brand, we have a lot more to do. What about expansion . You have 15 new stores 15 throughout the franchise network. We are now offered in 39 countries. We have very little in europe. We have paris, germany, we are now looking at amsterdam. Andre looking at this looking at freestanding in these markets. We will see what we can do. You are confident about world growth . You are seeing American Brands come here. I think everybody is looking for growth. Of an americaauty will be, we are not starting with 300 stores. Slowlyg and building exit a little easier for us to cherry pick where we want to go. We just heard philip green talk about plans. The fashion chain already has 500 shops. Should you focus more on top shops Online Presence . L. Ts welcome rahuk this is one of the first questions i put to fill up. We buy more online. Why does he want to open a 40,000 square foot shop in the middle of the fanciest place in new york . He says this goes to the brand. He wants to have Online Presence and beautiful big stores. I think when you are a new brand, establishing yourself in a country, youre selling as much a lifestyle. Particularly with Something Like top shop. You have to have something that embodies the brand physically. I dont think you are necessarily going to see a really Expensive Store but you do have to have flagships in key places that embody your brand. The other thing they have done is in terms of expansion, they have an agreement with nordstroms. Mosttrom is one of the aspirational retailers in america. The fact that nordstrom is looking for newness, it can bring in this new brand that it thinks is edgy and cool. Also, this is kind of what he was intimating. They go into the market with nordstrom and that is when they want to open more stores afterwards. Theyre also opening for more stores in addition to the flagship. The problem with burberry is that a kind of did the same at then lost control. They are really a department store. If you want to upscale your brand, and need to take them back. That takes a long process. The problem is when you are new in america, it is. Hard to start. There are a lot of brands out there. You need to be positioned somewhat specially. You need to be visible in very special places. Top shop is one of the only u. K. Retailers trying to take on america. It is usually the other way around. Of banana expansion republic, gap, j. Crew very recently in london. The factk it reflects that a lot of younger shoppers are looking for something new, something edgier. There are very few brands that play into it. Zara has decided to throw in with europe and emerging markets. It is not really doing anything in america. H m had a push on america but they have a slightly different positioning. Thingshis space like social media make it so much easier for these brands to make their presence felt. A younger consumer is so much more connected and aware not just in the u. S. But also in emerging markets. Look at michael kors. Phenomenal numbers yesterday. A lot of that is the buzz they have built through social media extending across europe and emerging markets, not just their home market of america. I asked philip green and he said ignore social media at your own peril. Talk to me about wearable technology. We are talking about really cool stuff coming out. Google, possibly microsoft. Is there something for retailers to play a part of . I think there is still some significant barriers to entry when it comes to fashion. In terms of wearable technology, everyone is excited. At this stage you still need to prove functionality. If something is really functional, something that if you are a sports enthusiast and this helped you get better, that certain person will be an early adopter. That sets the framework for you to potentially look at mass adoption. Everything else, you still have a little bit of the creepy factor. You have to prove something about functionality. Things like the Samsung Smart watches or smart watches in general are another effort in that direction. They havent proved that it adds exceptional value. I think fashion comes somewhat later. Again, retailers ignore that at their peril. Nike is a great example of adapting that technology. Ple Like Technology fitness is a great point. Technology can help you improve your fitness. Thank you so much for all of that, rahul sharma. Lets get some other company news now. Volkswagen is said to be considering raising its majority stake in the sweetest truck maker. Swedish truck maker. Ew would have to pay nearly 5 billion euros to buy out there remaining shareholders. The company has no firm plans to do so. Has a combined savings of 200 Million Euros from cooperation between the two divisions. Airbus may set up an Assembly Line in india for its c295 plane. The company is planning to pitch the plane to the Indian Air Force next month. India is the Worlds Largest arm importer. Alibaba is estimated at 153 billion. That is after the chinese ecommerce giant posted surging sales and profit last week. The company was estimated to worry worth 120 billion. Analysts expect the company to hold the largest initial Public Offering since facebook. Yahoo owns a 24 stake in the company. Still to come, find out why one man thinks air jordans are so dangerous they should come with a warning label. Welcome back to the pulse live on Bloomberg Television and radio, also streaming on your tablet, phone and bloomberg. Com. It is time for a look at todays hotshots. The motorcycle grand prix kicks off at the end of march. Competitors are preparing. The preseason testing in malaysia this week saw some pretty impressive time scores. The new craze is taking off in cambodia, fly boarding. It is a water sport that lets people sail across the water using highpressure water drats. Borders can dock and scam in and out of the sea. They are attached to a jet ski to maintain power. Temperatures,o thousands of visitors gather to check out japans annual ice festival. The elaborate ice and snow sculptures celebrate the countrys Winter Olympics and recreated famous buildings from around the world. Millions are expected to visit the festival over the next few weeks. Pretty impressive. Lets get an asset check. Jonathan ferro joins us at the touchscreen. Markets, a little bit frothy. A little bit, soaring in japan overnight. Nikkei up over 1 overnight. The challenge for abenomics remains. A 19th straight month in decline for wages. Inflation, you have some of that, but that means real people, real wages are dwindling. They are getting poorer. In april, a consumption tax hike. Big challenge for abenomics. How does he get those corporate step pay people more . Even if you generate inflation, it doesnt matter. European stocks up on the back of that. The dax and the cac 40, but for the euro, no gains here. Weaker than expected eurozone data ahead of the big one, the ecb also grappling with some very low inflation numbers. 0. 7 . The threat of deflation, disinflation a real thing right now. One,services pmi, the big that if three quarters of the u. K. Economy expected to come out at 59. It is well into expansion territory. That is something the bank of england has to grapple with. Will rates stay low for longer . That is a tough one. Up next, bloombergs billionaire exclusive. We speak to the man known as russias vodka kicking. Find out. Welcome back to the pulse live from bloombergs European Headquarters in london. I am Francine Lacqua. We are getting data at of the u. K. Pmi Services Numbers are breaking as we speak. We had a little bit of figures from the eurozone and this is a tale of two fortunes. , pointing to disappointing figures. The u. K. Piling ahead. Pmi services were a touch below in the u. K. , 58l a very strong number. 3. Anything above 50 indicates an expansion. 58 is a pity pretty strong expansion. It is time for the Bloomberg Top headlines. The euro weakened towards its 10 week low against the yen. Investors are betting that the ecb will reinforce its commitment to lower rates. That is as europe faces a slowing inflation. Arts of the u. S. Could see more travel delays. Another snowstorm is heading the week. Ast, the second this new york and boston face as much as 10 inches of snow and ice. Billionaire philip green speaks to bloomberg. He is the owner of top shop which has hundreds of stores around the world. Withans to expand further the Biggest InternationalFlagship Store based in new york city. When we put our flag down in the middle of 5th avenue, there is no leaving. It is a commitment. We have to get it right. Stores, we tryp to do something unique. This will be slightly difficult. With us. Roustam tariko is often referred to as russias vodka king. Bloombergs Ryan Chilcote talked to him in an exclusive interview. How many cases of vodka will you make this year . 30 mi