Impact of Rising Natural Gas Prices...Talks at GS With Gymshark's CEO...Takeaways From Goldman Sachs' Communacopia Conference

[Goldman Sachs]( [BRIEFINGS] October 7, 2021 How Rising Natural Gas Prices Could Crimp Growth As natural gas prices rise to record highs in Europe and Asia, so does the risk of economic damage. “The gas shortage is, first of all, symptomatic of broader trends in commodities of strong demand and supply underinvestment,” explains Damien Courvalin, head of energy in Goldman Sachs Research’s commodities team, on an episode of Exchanges at Goldman Sachs. Power demand has surged during the COVID recovery, but disruptions to gas supply and a lack of investment in recent years have left exceptionally low levels of inventory ahead of peak winter demand, portending a temporary (albeit likely to recur) boost to inflation and a damper on consumer incomes. “Ultimately, the real risk is the one we’re now seeing in China where, because of energy shortages, our economists had to reduce their year-on-year growth rate forecast by a percent for the end of ’21 and the beginning of 2022,” Courvalin says. “That’s the real risk to economic growth—not so much prices themselves, but really the point where you are just unable to generate electricity and you are forcing much lower economic growth.” [Listen to podcast]( [Subscribe on iTunes]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=The%20Impact%20of%20Rising%20Natural%20Gas%20Prices&body=https%3A%2F%2Fyoutu.be%2FUfm7WvCxlb0) How an Oversized Shirt Inspired the CEO of Gymshark Above (L to R): Khamran Ali of Goldman Sachs and Ben Francis of Gymshark In a recent Talks at GS in our London office, Ben Francis, founder and CEO of athleisure brand Gymshark, sat down with Khamran Ali of the Investment Banking Division to talk about how he started his company as a teenager and has grown it into one of the UK’s most valuable privately held companies. Here are some highlights from the conversation: On the inspiration behind Gymshark: “A lot of my heroes were on YouTube. I was a massive fan of Ronnie Coleman, who's a huge lifter from Texas, obviously Arnold Schwarzenegger, guys like this. And they would always wear these bodybuilding clothes that just looked really cool, if I'm honest. I bought one of these tank tops and it completely drowned me. Honestly, I looked like an absolute idiot in it. It was nuts. So I just thought to myself, how great would it be if this was smaller and it would actually fit someone that isn't a massive bodybuilder?” On choosing to sell directly to consumers: “We said, for example, ‘We’re not going to allow Gymshark to be stocked in other people’s stores, because we want to truly control the consumer experience and understand the consumer better than anyone else in the world…The high street just wasn’t working in a way that made sense to our age group and our demographic.” On what's next for Gymshark: “So, back in the day, Amazon just sold books, right? Now they sell everything…I want Gymshark to be like that. And in 10 years’ time, I would love us to be sitting here and chuckling about the time that Gymshark only sold apparel and accessories.“ [Watch video]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Talks%20at%20GS%20With%20Ben%20Francis%2C%20Founder%20and%20CEO%20of%20Gymshark&body=https%3A%2F%2Fyoutu.be%2FOHwnGVhAvMs) Briefly…on How Cable, Telecom, Media and Mobility Companies Are Managing Through the Pandemic Telecom, cable, media and mobility companies saw a surge of growth when the pandemic began, but how are they faring now that people aren’t quarantined at home? We sat down with with Goldman Sachs Research’s Brett Feldman, Stephen Laszczyk and Eric Sheridan following the firm’s 30th Annual Communacopia Conference to discuss what industry leaders are saying. Cable and telecom sectors were among the biggest beneficiaries during the pandemic. What’s their outlook as economies reopen? Brett Feldman: The major cable companies have benefited from strong growth as people relied on broadband connections for work, school and entertainment during the COVID-19 lockdowns. But the companies signaled that they expected growth to moderate in the third quarter. So investors are asking whether this is simply a natural moderation of growth following a period of overwhelmingly strong demand or whether we’re seeing a shift in the competitive landscape. Telecommunications firms, for example, are emerging as a competitor, as they look to supply fiber networks to people’s homes. Overall, however, the cable companies highlighted underlying growth opportunities: Broadband is generally underpenetrated in many markets, providing further room for upside, and the management teams at the conference highlighted the significant network investments to deliver gigabyte-capable speeds and new products, such as in-home mesh Wi-Fi and free streaming hardware. What about the outlook for media companies—what’s the appetite for streaming services? Brett Feldman: Several media companies reported some deceleration in the growth of their streaming subscribers. So the question again for investors is whether this deceleration is a signal that the overall market for streaming is going to continue to moderate as people come out of lockdown, or if we’re just starting to learn more about the seasonal cadence of these products as we move into a potentially more normal operating environment. Let’s talk about the flip slide—how are industries dependent on in-person traffic faring? Stephen Laszczyk: Live-events companies signaled they’re continuing to march ahead toward normalcy, albeit having to adapt to some of the curveballs thrown by the delta variant. Demand looks strong on both sides of the ticket: Artists, for their part, are looking to tour again and connect with their fans—and obviously, touring contributes a big part of their income. Meanwhile, the demand from fans, who are looking to experience live events again, is just as strong, in some cases surpassing the demand we saw in 2019, pre-pandemic. Eric Sheridan: We also heard from travel and mobility companies that people are getting out and about. As more people get vaccinated, they’re going back to school and back to work, although the travel picture has been a bit more volatile. This was an industry already facing slower growth prior to COVID-19, so we think companies' pandemic shifts toward local offerings and marketing targeted at deepening customer engagement are likely to stick, and we heard that echoed by presenters at our conference. [Read more Briefly Q&As]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Briefly%E2%80%A6on%20How%20Cable%2C%20Telecom%2C%20Media%20and%20Mobility%20Companies%20Are%20Managing%20Through%20the%20Pandemic&body=https%3A%2F%2Fwww.goldmansachs.com%2Finsights%2Fseries%2Fbriefly%2Findex.html) Goldman Sachs Media Highlights CNN - October 5 [Goldman Sachs CEO: One Way to Help Solve the Nation's Labor Shortage]( Fortune - October 5 [Stephanie Cohen, Global Co-Head of Consumer and Wealth Management, is Featured on Fortune Magazine’s 2021 List of Most Powerful Women]( [Subscribe]( [Unsubscribe]( The data provided in this newsletter is for information purposes only and should not be construed as investment or tax advice nor as a recommendation to buy, sell, or hold any particular security. Goldman Sachs believes the data in this newsletter is accurate, but does not verify its accuracy independently and does not warrant or guarantee that it is accurate or complete. 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