First Lady Melania Trump Makes Surprise Visit to Texas Detention Center; France Through to Last 16 After Beating Peru; Denmark, Australia Battle to 1-1- Draw
GOLODRYGA: Hello, I'm Bianna Golodryga, coming up in the next half hour of QUEST MEANS BUSINESS, new nations are entering the global trade war. Now India and Turkey hit the U.S. with tariffs. And one of the world's top biggest stars is having the tournament from hell. But first, these are the top news headlines we're following at this hour. U.S. First Lady Melania Trump made a surprise visit to a detention center in Texas, housing dozens of immigrant children. The trip came one day after President Trump signed an executive order to put a stop to his own policy separating families at the southern border. The wife of Israel's Prime Minister has been charged with fraud and breach of trust. Prosecutors allege Sara Netanyahu misused government money to pay for meals and chef at the Prime Minister's residence. Her lawyers slammed the indictment, denying that she committed any felonies. And World Cup action, the big question is what happened to Argentina's Lionel Messi as his team failed to Croatia 3-0. That means Croatia through to the last 16, big blow for Messi. France will join them after beating Peru 1-0. Nineteen-year-old Kylian Mbappe became the Les Bleus youngest scorer at the World Cup. Australia- Denmark battle to a 1-1 draw, both are still in contention for the knockout phase, but the Socceroos will have to defeat Peru. New Zealand's Prime Minister Jacinda Ardern has given birth to a baby girl. She wrote on Instagram, "welcome to our village, we won", and posted with this happy photo. Miss Ardern is just the second world leader to give birth while in office after the late Pakistani Prime Minister Benazir Bhutto in 1990. And returning to our top story tonight, the U.S. Supreme Court has delivered a major blow to online retailers. Judges say states can force them to collect sales taxes in states where they have no significant physical presence. I'm joined in the C-suite tonight by retail veteran. Jerry Storch is a former CEO of Toy R Us. He's also a former vice chairman of retail giant Target. And he served as the chief executive of Hudson's Bay's own owner of Lord and Taylor. Great to have you on set with us --</s>JERRY STORCH, CEO, STORCH ADVISORS: Great to be here.</s>GOLODRYGA: First reaction to the ruling. Are you surprised?</s>STORCH: I'm not surprised really, although I thought this court might take the easy way out and just say, well, this is already decided, live it up to Congress with time to make the law which is what the minority said. Majority struck a blow for common sense and bringing the taxation scheme into this century instead of 1800s. So the idea that somehow it will be too burdensome for online sellers to collect sales taxes is ludicrous, it always has been because these are very technological and proficient companies by and by. You know, and they have total ability to accomplish this. And in fact, they accomplished it further for their bricks and mortar partners when they do business together, so this was long overdue.</s>GOLODRYGA: And some have actually advertised that the consumer should shop with them for the discount they will be getting for the sales tax they're not going to be paying.</s>STORCH: It may not seem like a lot, you know, where there's five percent, seven percent, eight percent, depends on the state that you're in. But actually, it is a lot when you realize that most retailers only make a single digit percent of sales as profits on the bottom lines. So it's going to 100 percent of the profits of many retailers. And when you have a sales tax holiday which many states do right before back to school in the U.S., you find that people flood into the stores to get that free or no tax day. So it does make a huge difference, and it gave an unnecessary advantage to online retailers versus brick and mortar which was particularly important during the growing days of online retailer. You've seen so many bankruptcies and closures on main street as a consequence of this. So it's dire overdue and it will be a level playing field now and consumers will choose who to shop with and how, not based upon who has a sales tax advantage, but based on who has the best package of goods and services.</s>GOLODRYGA: How much of that competition and the pressure from online retailers do you attribute to the downfall of Toy R Us?</s>STORCH: Well, that's a very complex situation, it was a very leverage company, I think part of that great firm is they took that private in 2005, couldn't have seen what was going to happen to retail in the future. And at that time it was a huge cash cow and so was heavily leveraged. What happened was, the Internet happened, a lot of things changed, so it required much more capital investment and there were much lower margin rates due to pressure from online shop. Including by way this tax advantage which in early days Amazon didn't collect sales taxes even on their first product sales. So that was definitely an issue in the early days. So it meant that the margins were much thinner to live through with the recession and what followed. And so I think it's a combination of factors, not just -- not just the Internet, but that was certainly a factor, but also just the extreme leverage on the company.</s>GOLODRYGA: Any political factor at all, given that the president had a wild there almost weekly, gone after Amazon for the lack of taxes that he says that they're paying and for the free ride they were getting.</s>STORCH: Well, I don't think the Supreme Court was influenced by politics. When you look at the make-up of the majority on the court, it was an unusual combination for conservatives and liberals who are -- who came out in favor of this judgment. So I don't think it was politically influenced. I have been here on CNBC before and I've said that I thought that even though I know a lot of people don't agree with Trump on a lot of things and we're questioning his motives vis-a-vis, you know, Amazon and "The Washington Post" --</s>GOLODRYGA: "Washington Post" --</s>STORCH: That I have said I thought he was basically right that everyone should be collecting sales taxes and that always should have been the case and it was sort of nonsense that we had the institution to begin with. It was a -- it resulted in the government picking winners and losers in the retail landscape which is something we never want to do.</s>GOLODRYGA: But brick and mortar company should not get too comfortable with this decision --</s>STORCH: Sure --</s>GOLODRYGA: Right, because e-commerce isn't going anywhere.</s>STORCH: No, I think what's important to remember here is that the good bricks and mortar companies have been built in their online arms. But those -- the e-commerce arms, the bricks and mortar retailers had other unfair disadvantage versus e-commerce only companies. So you could have a situation where you've had an office in one place that it was the Internet arm of bricks and mortar company function identically to the e-commerce-only company. And then the office right next to it e- commerce-only company, and the e-commerce-only company didn't have to collect sales tax. And the Internet arm of bricks and mortar company did. Big companies(ph) saying why are those bricks and mortar companies so bad at the Internet? Well, one big reason was they were forced to collect sales tax because they had stores, you know, whereas the e-commerce-only company did and that was just wrong.</s>GOLODRYGA: And consumer shop for convenience, they also shop for the better deals. And when they hear about the ruling today, the first question they're going to ask is what does it mean for me? Are they going to be paying more now because of this ruling in online shopping?</s>STORCH: Well, no one wants to pay taxes, let's face it. But eventually, there will be sales taxes and every -- so with the Internet, it's going to take a while because the states have to take action in order to -- eventually, what a -- eventually, there will be taxes on everything on the Internet. But look at it this way, the poor guy on main street who is starting up his store and has to compete with an online retail out of state, you know, where there's a 5-day percent cost advantage over the guy on main street in your community the store, you know, now we'll see that he has level playing field with the out-of-state competitor, and that makes sense.</s>GOLODRYGA: Yes, Justice Kennedy called it a form of tax evasion.</s>STORCH: It wasn't, it was totally wrong. And you know, we were all supposed to remit use taxes to the state where we live when the retailers didn't collect it, but I don't know of any who would pay a use tax on the products that they bought from Amazon.</s>GOLODRYGA: Well, Jerry Storch, great to have you in the C-suite --</s>STORCH: It's a pleasure --</s>GOLODRYGA: Thanks for coming in, we appreciate it. Well, Lionel Messi wants to be known as the greatest footballer to ever play the game. But after a stunning loss for Argentina last hour, he's on the verge of World Cup elimination.