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First Move with Julia Chatterley
Ukraine Marks "Day Of Unity" As Russian Troops Encircle; U.S. Defense Secretary Meeting With NATO Leaders; Poroshenko: We Need Sanctions To Make Russia Weaker; Americans Still Shopping Even As Inflation Soars; Ukraine Intel: Russian Forces Not Enough To Invade; Cybersecurity Likely A Focus For Nadella In The Future. Aired 9-10a ET
Aired February 16, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[9:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is first move. And here's your need to know. Because
messages need to cease there's no evidence Russian troops are withdrawing. Ukraine unity President Zelensky holds a national day amid the tensions.
And China's command, Beijing tells Hong Kong to contain its COVID outbreak. It's Wednesday. Let's make a move. Welcome to "First Move'. Once again,
thank you for joining us, this Wednesday a day of pageantry under pressure.
Ukrainian citizens are celebrating their day of national unity a show of solidarity in troubled times, despite a lack of certainty over Russia's
next steps. The big question remains what is Russia doing with its troops?
NATO's Secretary General Jens Stoltenberg is saying that Moscow must provide proof that troops are retreating, in fact, basically the opposite.
Even as President Putin signals he's willing to give diplomacy more time.
Joining us this hour with his take former Ukrainian President Petro Poroshenko, who led the nation after the invasion of Crimea in 2014, and
remains the opposition party leader.
The security crisis in Europe of course remains pivotal for investor sentiment to U.S. stock market futures cautious, as you can see there after
a snapback rally yesterday tied to hopes of that troop withdrawal.
Some of that optimism leaking away today, as you can see in a muted session across Europe, despite a higher close across Asia, the real fear gauge
remains the energy complex.
Oil still hovering near eight year highs, Brent crude, close to $95 a barrel as you can see there. That's adding to the panic over rising prices
more broadly data today. So UK inflation hit a 30 year high, while prices of goods leaving factories in the United States now rising at a near record
pace a ward Wednesday or round.
But we have you covered, let's get to the drivers amid the threat of invasion and with 150,000 Russian troops surrounding his country. Ukrainian
President Vladimir Zelensky has declared a day of unity.
It comes as Russia releases video they say shows tanks and troops returning from Crimea on the train after exercises. But speaking ahead of a meeting
of NATO Defense Minister, Jens Stoltenberg said he's not seeing signs of a pullback.
(BEGIN VIDEO CLIP)
JENS STOLTENBERG, NATO SECRETARY GENERAL: We have heard the signs from Moscow about readiness to continue diplomatic efforts. But so far, we have
not seen any de-escalation on the ground. On the contrary, it appears that Russia continues the Military buildup.
(END VIDEO CLIP)
CHATTERLEY: And the new Ukrainian intelligence reports shared with CNN shows the government believes the current Russian troop level is not enough
to effectively invade. Sam Kylie is in Kharkiv, in northern Eastern Ukraine near the Russian border, and Melissa Bell is following the NATO meeting in
Brussels.
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Thank you both for joining us. Sam, I'll come to you first. The message seems to be at least
from the United States and the UK, even from NATO, their actions speak louder than words.
And irrespective of what Russia is saying about a de-escalation of troops, their thing the opposite and worrying signs.
Yes, they are seeing the opposite. I mean, this is quite a radical increase in estimated troop numbers just a couple of weeks ago, the United States
and others were talking about 100,000 troops massed on or near the borders with Ukraine, and that's in a big arc of territory, Julia from the - in the
Far East, right around - north of Kyiv up into Belarus.
Now they're talking about 150,000 at a time when the Russians are insisting that they are downsizing the scale of their deployments in Crimea and in
east of the rather to the east of Ukraine.
And the Western District as it's called, for Russia, the Western Military district saying that at the end of the operations, the exercises in those
areas, those troops are returning back to their permanent barracks of denial.
Or at least cynicism is coming from not only the Ukrainians, but also we heard there from Jens Stoltenberg. So what we've got is this push pull
thing going on. And then we're seeing the same thing now with Ukrainian analysis saying that they don't believe that the Russians have enough
troops to conduct an invasion.
Now that may be slightly parsing the issue in that if you want to do an invasion you can do it with any number of troops, it's quite kind of
question of what you want to do with that invasion. Do you want to topple the government, do you want to slice off a bit of territory?
[9:05:00]
KILEY: Do you want to cause instability and then simply leave? Or do you want to occupy the whole nation? And as the U.S. lead allies discovered in
Iraq, any number of troops of your fighting, and insurgents could -- insurgency is unlikely to be enough.
So it's a very long issue that one. But I think ultimately, there is a sense still in the Western powers that the nation of Ukraine is in near
mortal danger from a Russian invasion.
But again, on this day of unity a day, slightly ironically, that the president here declared a day of unity because he had been one of the dates
given out by American analysts inside the administration of President Biden as a potential day for a Russian invasion.
That hasn't happened here in Kharkiv, a fairly low key marking of the day people wearing the symbols of the national flag but going around their
business, as per usual.
Now one other thing to note here, Julia is unlike in Kyiv, where there are a large amounts of Soviet era bunkers have been opened up very few of them,
we understand from friends and connections here have been opened in Kharkiv, and some of them are, many of them are simply locked up or
flooded. There isn't even that level of preparation, just 25 miles from the Russian border.
CHATTERLEY: Yes, I mean, you raised some great points there, Sam. And particularly the point about what's required for an invasion here, but at
least that intelligence report, I think, is consistent with what the government's been trying to do in terms of reducing panic and instilling
calm relative to some of the other messages that we're hearing from other nations.
Melissa, in line with that, if you're there, do I still have you? No, I think I can see her telling me that she's lost me there. Sam, I just wanted
to ask, actually, the relevance of what took place in the Russian Parliament this week, the Duma.
If you can, if you can clarify what happened there and the push by the parliament for Vladimir Putin to recognize the independence of a couple of
the areas in the Donbas region in the east of Ukraine, Luhansk and Donetsk.
Obviously, if they were recognized as independent that would contravene the Minsk agreement, the peace agreement that was signed after the invasion of
Crimea in 2014, what do you see happening here?
KILEY: Well, it's a long and slightly painful process, if you like it's symbolically very important and the time is not lost on the Ukrainians.
Today the Ukrainian foreign minister reiterated the long standing commitment that this country has to regain control not only of those two
self-declared Republic's in the Donbas region to small region, opposite the essentially Rostov on Don, in Russia, but also the Crimean peninsula, which
has been formally annexed to Russia.
As far as the Russians are concerned, that is already or has been returned those they were put it back into Mother Russia as part of the Motherland
that is not the case for these two breakaway republics in the east of the country.
The process, Julia is a little bit convoluted, they have to go through several readings of the Duma and other counselors, then they need to go to
the Federal Council, then it needs to sign off from Vladimir Putin.
And then they would join a kind of potentially, recognized areas that Russia lays claim to elsewhere such as North, the set here and others that
have been granted a similar sort of status.
It's all fairly vague in terms of certainly clear in international law, that these are completely unrecognized status, that this would be an area
of territory that was firmly remain in Ukrainian hands.
But there are opportunities there for a bit of wriggle room, down the line with discussions over greater legal autonomy from the central government in
Kyiv.
But one of the central issues in those negotiations is that the Ukrainians will not speak to any of the leadership in those breakaway republics, their
leadership that they insist is nothing more than terrorists.
And they will only speak that as the Ukrainians are talking about directly to the Russians who may hold responsible for those responsibilities. They
would I mean, inside that Russian back those Russian back breakaway republics, Julia.
CHATTERLEY: Yes, I just find the timing, uncanny in light of a suggestion from the Russians that they are withdrawing troops at the same time, this
discussion perhaps, of a push to recognize independence of these regions, which is another pressure point for Ukraine.
Sam, thank you for that, Melissa, just come in two seconds. I think I have you back. Now the message seems to be from NATO. Look, we welcome the
suggestion from Russia that you're planning to deescalate and remove troops, but we need to see the proof.
MELISSA BELL, CNN CORRESPONDENT: We need to prove and for the time being Jens Stoltenberg is quite clear Julia as he headed into that meeting that's
underway even now between NATO Defense Ministers that in fact this the evidence as far as NATO is concerned is that for the time being that
buildup continues.
[9:10:00]
BELL: Now, what's happening inside that meeting right now is the defense ministers are sharing with each other the intelligence they have or
reporting back to one another, the communications.
And there have been so many diplomatic meetings these last couple of weeks between so many different NATO leaders, and Russia and Ukraine.
This is a chance for all of them to get back together and bang heads and bring together the information they've collected and have another look at
the intelligence together.
It is also Julia and perhaps more importantly, an opportunity to decide what they're going to do with all of those allied troops have been brought
in to shore up at NATO's eastern flank.
Now 5000 American troops that are apt to be added to the 8500 American troops that are already on a heightened sense of alert, the United
Kingdom's pledged troops France as well, between 25 and 30.
That would be all of NATO countries have pledged or have already deployed extra troops that is, according to sources within NATO. What that meeting
is about today is working out, should there be an invasion of Ukraine?
What do those troops then do? Now what we understand from NATO sources is that there would be three potential triggers to a NATO Response Force being
action. That would be first of all, of course, any direct attack on a NATO country, any humanitarian catastrophe with allied troops preparing for the
flood of refugees that would no doubt come across Ukraine's border into countries like Poland.
But also the problem or the mistake happening is a misunderstanding some kind of accident that might lead to a direct engagement of Allied troops
against Russian troops.
And when you bear in mind, Julia that along the border between Belarus and Poland, there are on one hand active ally troops and on the other active
Russian troops now engaged in those Military exercises, the fears for potential accident miscalculation are extremely real.
So that's what was going on in the meeting. We're going to hear from the Secretary General later on today, no doubt more about exactly what's been
decided.
CHATTERLEY: Yes, Capital Management required, Sam Kylie, Melissa Bell there. Thank you both for that. In around five minutes time, I'll be
speaking to the former Ukrainian President Petro Poroshenko to get his take on what he sees taking place.
For now, let's move on COVID surge in Asia, South Korea seeing record daily cases with more than 90,000 new infections in one day. Singapore and
Malaysia also report a spike in cases.
And in China President Xi Jinping is telling Hong Kong to take all necessary measures to control its fifth wave as Kristine Lu Stout reports.
KRISTIE LU STOUT, CNN CORRESPONDENT: Chinese President Xi Jinping is urging the Hong Kong government to take the main responsibility to stabilize a
growing COVID-19 outbreak, this according to local pro Beijing media on Wednesday. According Xi, they say the Hong Kong Special Administrative
Region government should take up the main responsibility.
It should mobilize all forces and resources that can be mobilized and take all necessary measures to protect Hong Kong people's lives and health, as
well as ensure Hong Kong social stability of the reports add that Beijing will help Hong Kong by boosting its testing treatment and quarantine
capacity.
Hong Kong's top leader Carrie Lam issued a response thanking Xi for his concern, while promising to unite Hong Kong to fight the virus. Now Xi's
message comes as Hong Kong grapples with a growing fifth wave of infection on Wednesday.
The city reported 4285 new daily COVID-19 cases and 7000 more preliminary positive cases a significant rise from the previous day. A number of public
hospitals are running out of beds and some have set up outdoor treatment areas at the Kertesz Medical Center.
Patients are waiting outside for care. The parking lot has been turned into a field hospital in isolation facility. Despite the worsening situation
Carrie Lam on Tuesday said that the city remains committed to its dynamic zero COVID strategy, a policy designed to suppress every outbreak. Kristie
Lu Stout CNN, Hong Kong.
CHATTERLEY: OK and coming up here on "First Move' day for unity and another day for diplomacy. Former Ukrainian President Petro Poroshenko joins us
after the break. And later windows of opportunity for Microsoft, there's nothing micro about their buying spree. The question is, who's next? Stay
with us.
(COMMERCIAL BREAK)
[9:15:00]
CHATTERLEY: Welcome back to "First Move'. And back to our top story. An intelligence report from Ukraine obtained exclusively by CNN suggests
Russia does not have enough troops in place to invade.
And the country declares a day of unity in defiance of the threat of a Russian invasion. Moscow releasing videos of tanks and troops that it's
these are pulling back from Crimea.
And today, NATO defense ministers meet as do Russian President Vladimir Putin and Brazil's Jair Bolsonaro. In the meantime, Petro Poroshenko was
Ukraine's President before the Zelensky Administration and dealt with the aftermath of Russia's invasion of Crimea in 2014.
He's also an entrepreneur and businessman and was Head of the National Bank. After his presidency ended, he was charged with treason, a charge he
strongly denies. And I'm pleased to say he joins us now live, Sir, fantastic to have you on the show with me, great to talk to you once again.
Can I start by asking whether in your view, in light of what we've seen in recent days, has the risk facing Ukraine reduced in any way in your view?
Petro, can you hear me?
PETRO POROSHENKO, FORMER UKRAINIAN PRESIDENT: Yes, I can hear you. But first of all, thank you very much for this opportunity to speak with you
and keeping Ukraine's very high agendas. This is now crucial not only for Ukraine, but for the global security and for our global wellness.
And we definitely celebrate today not only the day of unity, but the day when the aggression and invasion is not happening.
And this is start to be possible because the absolutely active role of our partners in NATO partners in the European Union, an absolutely crucial
leading role of the American Administration and President Biden, State Secretary Blinken and all of the team.
I think that this battle, which happening today, when Putin start to blackmailing Ukraine, blackmailing Europe and blackmailing world, same way
like he do in the year 2014. And in April this year, he lost this battle.
And I congratulate the whole the whole world with that, but the challenge is still present. And if you want to separate the escalation, we have two
types of escalations heart and soul. For the heart escalation, we still have 140,000 Russian troops alongside of Ukraine and Russian border.
And 30,000 troops in Belarusian Ukrainian border, Russian troops which is present in - Belarusians. And we don't have an attack today, but we should
keep very strong to be ready for the attack of Putin in future. And this is not happening, the de-escalation. But we have a target for de-escalating --
.
[9:20:00]
CHATTERLEY: Petro, forgive me for interrupting. But you raise a very important point. President Putin said yesterday, he doesn't want war. Do
you believe him? Do you trust him?
POROSHENKO: This is very good question, because I have two recommendations to the whole world. My advice number one, don't trust Putin. Because when I
was a president of Ukraine since the year 2014, he promising me longs many, many times, starting from the means, one means, two means, three, three,
releasing the Ukraine imprisonment and nothing happened.
Please don't trust Putin. And second recommendation; please don't be afraid of Putin. And third, because Putin go as far as we allow them to go when we
afraid of him.
And Advice number three, keep unity, so keep demonstrate the solidarity with Ukraine. And this is the only way how we can keep the world safe, keep
the Western value protected, keep the freedom, keep democracy, keep Ukraine.
And with this situation, I very much happy that at least United States NATO Europe speaks the language which I speak in the year 2014, Ukraine begins
the year 2014. And definitely, this is the great progress, which can save the world.
And I am again want to thank before the rest of world for supporting global security.
CHATTERLEY: We understand, you mentioned de-escalation, too. And today there is confusion. Would you like to see de-escalation defined in terms of
numbers because President Putin could remove 50,000 troops, and there would still be 100,000 troops remaining? That to me is a problem.
POROSHENKO: We don't have actually any confirmation about withdrawal 50,000 troops. This is just a declaration of podium, but unfortunately troops is
remaining on the same place. And the second thing is that we have not only hard escalation, but soft escalation.
And soft escalation means that yesterday Ukraine was an object for the biggest cyber-attack in the history. If there was attack our government
side, our minister of defense side, our sight of the president, and with that situation, I'm absolutely confident that we don't have happening with
this de-escalation.
Yesterday, the State Duma voted for the request to the President Putin for the recognition of the occupied territories independent state. This is de
facto means that the Putin withdraw Russia from the Minsk agreement, Putin want to have additional pressure to the free world.
And with this situation, we need three things now to support Ukraine. Point number one, we need a sanction, sanction to make Russia, we can sanction to
motivate Putin not doing these types of things.
And sanction would be in the form for stopping Nord Stream 2 as a form of the political pressure for European Union and for Ukraine and to
disassemble to make ruin the unity of European Union.
We need a sanction answering public mailing podium for prohibited Ukraine to be a NATO member state, instead of that definitely this year's summit
this year in - Summit, may distribute to Ukrainian to Georgia.
The Membership Action Plan as the right answer for the Putin blackmail. Point number two, this is the support of the defensive capability of
Ukraine, which should learn very attentively the experience of land lease from the Second World War.
And with this situation, definitely we should increase the kinds of capability we should supply the new type of weapons significantly increase
it. You don't need American or NATO soldiers in our soul.
But we definitely need to increase the effectiveness of Ukraine and armed forces and I'm proud the neoplasm 14, 15, I have three, the Ukrainian army,
which is now one of the strongest in Europe. But against Ukraine, we have the second biggest second strongest army in the world. And they have a
stake of that technology.
[9:25:00]
POROSHENKO: And definitely we should have weapons to protect our land. And point number three is to increase the resilience of Ukraine. And
definitely, we should have assistance from U.S. from EU for providing reform, which was launched by my team.
This is anti-corruption reform; reset the desulfurization reform, reform of security sector, reform of the civil society. This is to help us to meet
the criteria for the future -
CHATTERLEY: I understand, Petro. Petro, you and I have known each other many years now, because I chased you on the campaign trail in 2014. And I
interviewed you when you first became president.
And one of the things that we discussed at that time that makes Ukraine vulnerable, are things like corruption, a lack of trust in institutions,
the need for reform, and I know you began that work, but more work needs to be done. Is Ukraine strong enough to stand alone today?
POROSHENKO: First of all, I want to thank United States American people, American congress, for bipartisan support for the reform including the
corruption before my launch in my country.
I'm proud that I - dependent and effective now, the National anti- corruption Bureau, national anti-corruption distribution office, the high supreme anti-corruption court, which is now put in jail, a long list of the
minutes, the corruption is who is catching on the corruption when we create this infrastructure, unfortunately, now we have a backslide of the reform.
Unfortunately, now, because lots of the people from the President Zelensky team is very heavily involved in the corruption, they stop at suspend the
appointment of the special anti-corruption prosecutor appoint and suspend the role of the international experts in the commission for appointing
them.
And definitely also we need as a precondition for the cooperation, the effective and firm position of our partners for continuation of the reform
for fighting against corruption.
And that was the only things how we can move our country not back to the Russian Empire, but directly to the European Union for the future --.
CHATTERLEY: It's such a critical point. Petro, I want to ask finally, do you trust NATO? Do you trust President Biden to support Ukraine and do
whatever it takes to allow Ukraine to resist an invasion if it comes?
POROSHENKO: First of all, I'm very much happy that I have an adherence to work with the President Biden for many, many years. And I think that he
played a crucial role since the year 2014 because he come to my inauguration and we spend more than three hours to discussion, our future
cooperation.
And I definitely trust the President Biden. And I definitely trust NATO. Because I was very much happy to hear yesterday the very strong words which
President Biden said in their statement. And this strong word was demonstrated that this is not just their aggression, Russia against
Ukraine, this is not just fighting and not just a question of Russia and Ukraine.
This is a President Biden confirm that this is the question for the global security. This is the question for the values of the Western world. And
now, everybody in U.S. everybody in EU understand that this is not just an assistant Ukraine.
This is not just a supportive Ukraine. This is just an investment in their own security, both in the U.S. and both in the EU, and the success of
Ukraine in this fighting.
This is definitely success of the United States, success of NATO and success of the European Union. And for the NATO it simply not exist any
other mechanisms who can provide the security.
No Budapest Memorandum, no Minsk agreement, because there is not any effective mechanism of punishment for the violation of the Minsk agreement
for the country aggressive.
Putin by making aggression against Ukraine completely ruined all post for security system based on the Security Council of the United Nations. And
now the only mechanism who can protect Ukraine would be our future membership in NATO, then only mechanism who can stop Russia for destroy a
democratic institution is NATO.
[9:30:00]
POROSHENKO: And with that situation Ukraine are ready to be shoulder to shoulder with other member States. And to demonstrate that Ukraine
privilege and the effectiveness of Ukrainian membership in NATO, this is a win-win cooperation with other NATO member states. With that situation, we
should receive their membership - of NATO for Ukraine and for Georgia.
CHATTERLEY: Sir, thank you so much for your time. Petro Poroshenko, former President of Ukraine and I appreciate there were terrible sound and issues
there.
POROSHENKO: Julia, thank you very much.
CHATTERLEY: Thank you for your time and for bearing with us. We're back after this, stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: And welcome back to "First Move'. U.S. stocks opening lower this Wednesday with tech stocks actually pacing the declines. Global
Investors cautious as NATO warns that Russia is continuing its true build up near Ukraine.
The U.S. now saying it is yet to see any meaningful pullback of Russian forces despite assurances from Moscow that some troops are returning to
bases. Oil remains a main gauge of investor nervousness with Brent crude touching $95 a barrel in recent trade.
As you can see, we're just below that today. Data from financial advisory firm RSM shared exclusively with CNN says, if the Ukraine crisis worsens
and oil spikes to $110 a barrel, U.S. inflation would soar into double digits.
Inflation, already a number one concern for the U.S. consumers, but they are still shopping retail sales rising a better than expected 3.8 percent
last month, the biggest rise in 10 months.
And the turnaround from December's unexpected drop and bucking the trend to luxury fashion took a hit during the pandemic, but Mytheresa the global
ecommerce platform with brands like product.
Gucci and Tom Ford seems to have made its mark on the industry earnings for its most recent quarter show growth in the tight market including a record
number of first time buyers.
[9:35:00]
CHATTERLEY: The Company recently partnered with Vestiaire, which features pre owned design of fashions, and announced the commitment to become carbon
neutral. Michael Kliger is CEO of Mytheresa, and he joins us now.
Michael, it's fantastic to have you on the show. Much to discuss, but the standout for me from your earnings actually was the growth that you're
seeing and the strength of demand in the United States, a place that you call void for a true luxury play a void for a true luxury player. Talk to
me about what you're seeing there specifically.
MICHAEL KLIGER, CEO, MYTHERESA: Thanks, Julia, for having me. Yes. I mean, we were very pleased with our second quarter results, we posted a 26
percent increase in GMV. And the U.S. was the fastest growing market was with 74 percent growth in the second quarter compared to previous year.
And we see huge demand for true luxury. The consumers out there the consumers looking for opportunities to dress up. So it's really the
dresses, the shoes the clutches, the unique pieces that U.S. consumers are looking for, and there seem to increasingly lean on into Mytheresa to find
them.
CHATTERLEY: Are you fighting though for a larger share of a smaller pie because we did see the overall luxury market contract. I just wonder how
big you anticipate the online luxury market can get as a proportion of the entire business, whether we're talking in the United States or globally.
KLIGER: The online share and luxury is actually still to expand heavily. It's estimated that at the moment slightly above 20 percent of luxury is
bought online. And most consumer research companies estimate that this share will go up to 30 percent by 25.
And we are the leading platform for the busy shopper for the professional shopper that loves luxury, but doesn't have the time to go to stores and
really loves the multi brand duration that we offer.
And that is really unique about Mytheresa 250 of the best brands highly curated, serving the professional customer that is time constraint. And
that gives us this unique opportunity to grow 26 percent overall much faster in the U.S. and be profitable. That's the other story.
CHATTERLEY: Yes.
KLIGER: We are profitable though.
CHATTERLEY: Yes, I noticed that too. It's funny how we get very excited about that, like it's something rare. You know, if we go back five years,
there were questions about to your point, luxuries ability to be sold online.
Here were questions about what the resale market meant for some of these luxury brands. And it would have been the same question for a site like
yourself, fast forward to today and you're saying there's still huge growth online and you're doing deals with these kind of second hand resell sites.
Does it suggest an embracing of what the customer wants rather than perhaps what brands want or what the luxury market tells consumers that they should
be, should be buying?
KLIGER: I mean, you're right on. I mean, Mytheresa success is due to the customer focus.
CHATTERLEY: Yes.
KLIGER: We listen to the customer, we try to bleed please our customers as much as possible with services. And online creates a luxury experience but
is really for the time constraints sharper. And if anything, more and more professional successful woman, men feel that they have less time at their
hand and we solve for that still with inspiration with luxuriously packaged shipments.
And this is a trend that continues and the same for resale. I mean, we have customers that love fashion that always want the latest luxury pieces are
very well made materials is excellent.
So after a season, our customer may not feel that they want to wear this piece still, but it's still of outstanding quality and with resale. These
loved products find new homes.
And it underlines the longevity of luxury pieces and it combines again, the resale convenience. And of course a commitment to sustainability because
via Vestiaire Collective, our partner, we have incorporated circularity into our business model.
CHATTERLEY: Yes, I saw that. And that's quite fascinating. You promised you'll be carbon neutral this year. And I know you've allowed customers the
option to buy something, get it delivered to them and be carbon neutral themselves, which I think is a really important point.
I do want to ask you though, as well, because I certainly allegedly see it in retail shops here in the United States, reduced inventory, prices going
up.
What are you seeing in terms of and I know you've said in the past that you've managed your supply chains incredibly well, particularly in Europe
and you're not seeing pressure. But what are you seeing in terms of inventory and supplies and also prices rising?
[9:40:00]
KLIGER: So, second quarter, we have been very proud to have been able to completely continue operations by protecting our staff and focusing on
health. So we have not been really impacted.
We did see some delays and shipping around the Christmas holidays because of online being swamped with orders, but there was some shortages and
workforce due to Omicron.
And there continues to be pockets here and there were maybe shortages or workforce delays production, but we get all our products almost all our
products here in Europe. We are based in Europe, I mean most of our brands are Italian French luxury houses.
And so, we have by far not suffered from supply chain issues of supply chains spanning across the globe. Inflation, it is happening, it is also
happening a luxury. But here of course, we are dealing with a very special consumer segment.
This segment has the - wells has the means as long as the product is desirable, feels emotional needs and dreams. We have not seen. The price
increases have led to slower demand. I mean, not that we have seen that in a decade.
CHATTERLEY: Yes, the luxury of operating in the luxury market. I think that's the message there, Michael, congrats on the results. And we'll
continue that the conversation again soon, great to have you on the show. The CEO of Mytheresa there, Michael Kliger, thank you. We're back after
this.
KLIGER: Thank you.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move'. And back to our top story once again. The latest Ukrainian Military intelligence report obtained by CNN
suggests Russia's current troop levels surrounding Ukraine are not enough to invade.
Matthew Chance has that report and joins us now. Matthew, great to have you with us, what more can you tell us about this report?
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it's a very interesting report. It was given to us exclusively this morning. It comes
from Ukrainian Military intelligence. And basically it says that, first of all, it looks at the direction travel of the Russian Military buildup and
saying that's been increasing.
[9:45:00]
CHANCE: It's increased to approximately 148,000 troops, Russian troops ground air and sea, more than 148, it says, which brings the assessment
very much in line with the latest figures we got from United States of President Biden on Tuesday night and his address saying there are about
150,000 Russian troops there.
So there's a degree of agreement there. But there is deviation from the United States assessment when it comes to what the intention is or what the
capability is of those troops.
The latest Ukrainian intelligence assessment, saying that even at that level, Russia does not have sufficient forces in place near Ukraine's
borders to stage a large scale Military attack against Ukraine, doesn't mean that we can try it.
Of course, it doesn't mean that it wouldn't be a smaller scale operation that could be could be set in motion. But in terms of a large scale, full
invasion, basically, that's something that Ukrainian intelligence officials assess is unlikely to happen with the current level of forces in the
region.
Acknowledging that the report goes on to say what Russia is emphasizing is trying to cause the stabilization inside Ukraine through pulling economic
levers using energy as a weapon, and cyber-attacks.
And of course, tallies with some of the reports we've had coming out of Ukraine in the past 24 hours or so. It was a big cyber-attack, a
distributed denial of service attack, for instance, that put down Defense Ministry websites and websites of a private commercial bank as well.
And so we are seeing these kinds of regular kinds of cyber-attacks, which in the past have been blamed, or suspected of being the responsibility of
actors inside Russia, and elsewhere, as well.
And so it's interesting as we see this build up, and I've received these optimistic signs relative that Russia is prepared to negotiate further, and
that Russia is prepared to draw down some of its forces near to the border of Ukraine.
We're still seeing the latest Ukrainian assessment, saying there is a buildup of forces, but it's not at the level that would warrant acute
concern for an immediate attack.
CHATTERLEY: Yes, consistent with the government's efforts to downplay the risks here and not to provoke panic I think. Matthew Chance, great job.
Thank you so much for that.
Now multiple development bank tied to the World Bank Group is accused of providing funds to businesses using forced labor in China. The claims come
in a report compiled by the UK based Helena Kennedy Center for International Justice.
Ivan Watson joins us with the details on this, Ivan, great to have you with us. What more do we know about those that have been receiving the money and
the due diligence required in order to allow them to receive it?
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, the report, the timing is very interesting because it goes the U.S. government has been
leading a diplomatic boycott of the Beijing Winter Olympics, accusing China have genocidal policies in Xinjiang of the mass internment of up to 2
million ethnic Uyghurs.
So this report, which is called financing genocide, it accuses the International Finance Corporation.
It's the private investment arm of the World Bank, which is aimed at poverty alleviation and financing environmentally sound businesses, accuses
it of putting some $486 million into four Chinese companies with operations in Xinjiang, companies that the report accuses of participating in and
benefiting from forced labor programs from compulsory land appropriation programs, from doing things like having factories and facilities in close
proximity to suspected internment camps.
And there's some satellite images that can show the growth of one of these suspected internment facilities and how close some of these factories are
nearby to this.
The report goes on to say that the IFC doesn't seem to have adequate monitoring and due diligence to make sure that its standards of that human
rights are not being abused in the companies that are receiving its investment that there is an independent verification.
For instance, the report claims that there was only one group from the IFC that went in 2019 to Xinjiang. They only were on the ground for about 24
hours, and they were reportedly detained by Police no less than three times during that period.
Of course, reporters like CNN, we have a very difficult time doing anything independently in the Xinjiang region. This is all the more striking because
the U.S. government is the largest independent stakeholder in the IFC. So this seems to run contradictory to the U.S. government's own policies.
CHATTERLEY: Yes, that raises huge questions. What are the IFC saying in response to this report, what's China saying, Ivan?
[9:50:00]
WATSON: Right, well, we've reached out to the companies, which did not respond, but we've independently verified that they did receive IFC
funding, and that they did use some of that money to finance operations in Xinjiang.
The Chinese government the Foreign Ministry wrote to CNN, "China has repeatedly emphasized that the so called issues of forced labor and
repression against ethnic minorities are huge lies concocted by anti China forces in the U.S. and the West, they're entirely baseless goes on to say
that attempts to attack and smear China are bound to fail'.
Now, the IFC did not respond to specific questions from CNN, it did issue a statement saying that it does not tolerate discrimination or forced labor
under any circumstances.
And whenever serious allegations are brought to their attention, they'll work to verify them. I do have to say, Julia, that I have reported on the
issue of forced labor in Xinjiang.
I've interviewed people who say they have been sent to internment camps, then released unconditioned that they work for almost no money in terrible
conditions, in factories under threat that they would be sent back into detention if they complained or refused to work. Julia?
CHATTERLEY: Yes, Ivan, great reporting. Thank you so much for that, Ivan Watson there. Stay with "First Move', there's more to come.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move'. Sathya Nadella is one busy fellow as he seals mega deals at Microsoft. Forget the metaverse. It's all about
the merger verse. Paul La Monica joins me now. We can't forget about the metaverse because actually a lot of this is tied to the metaverse. It's
good to be a shopaholic when you have lots of cash to spend.
PAUL R.LA MONICA, CNN REPORTER: Yes, definitely, he's got a lot of cash. You're burning a hole in Microsoft's corporate - coffers Julia $130 billion
in cash. That pile will get smaller assuming the Activision Blizzard deal goes through because that's a purchase price of nearly $70 billion dollars
in cash.
And that's just the biggest and latest major acquisition for Microsoft under Nadella. This is a company that bought software cloud Software
Company nuanced last year. They bought the zander digital ad business from our parent company, AT&T for about a billion dollars.
And Microsoft has done several deals since Nadella took over LinkedIn obviously being the biggest and boldest up until the Activision Blizzard
deal.
CHATTERLEY: Yes, you know whether you're thinking about the growth that they're making in cloud in chips in gaming? I often wonder what's going to
differentiate these companies in the end for clients and it comes down to how well you protect them, I think this security.
So I think one of my big questions, particularly like some of the smaller acquisitions they've made, and of course, Microsoft's role in the solar
winds cyber-attack and bringing that to light. Do you think Mandiant cybersecurity firms going to be the next acquisition for?
MONICA: It could be, that's what the chatter has been Julia last week Mandiant stock went up a little bit on rumors that maybe Microsoft was
going to buy them next during Mandiants earnings call. The CEO declined to do give any of those rumors or speculation any credence saying they're not
going to talk about it.
Microsoft when I reached out to them also said they do not comment on any chatter any rumor speculation. But that talk is definitely out there and
you know what Mandiant about a four and a half billion dollar market cap, that's a lot of that having to do with the price going up on the
speculation.
[9:55:00]
MONICA: But four and a half billion that's, you know, chump change for Satya Nadella if you're going to spend almost 70 billion on Activision
Blizzard.
CHATTERLEY: Yes, peanuts. What the price to me, I think I will ever price given the challenges that we're facing, actually like we have a name for
the segment or even the show. Chattering with Chatterley, yes, yes.
MONICA: You map very well --.
CHATTERLEY: I know, yes. How about we wrap? Yes, Paul La Monica, thank you for that. And that's it for the show. If you've missed any of our
interviews today, they will be on my Twitter and Instagram pages, you can search for @jchatterleyCNN as always. And in the meantime, stay safe.
"Connect the World' with Becky Anderson is next. And I'll be back tomorrow.
END
