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Compared with Melisandre's Van Cleef & Arpels, this company is much larger in scale. In 1993, its turnover was equivalent to 5.3 million U.S. dollars and its net profit was 1.1 million U.S. dollars. It has recently begun to seek a listing on the Milan Stock Exchange. , the IPO valuation is expected to be between $10 billion and $15 billion.

Melisandre has already approached the Bulgari family.

Regarding the listing, the Bulgari family has different attitudes. Of course, the listing of the company has many benefits, but it will definitely be bound by various constraints, which has advantages and disadvantages.

This is Melisandre's chance, too.

However, although some people in the Bulgari family tend to cooperate with Melisandre, according to the results of previous negotiations, Melisandre can get up to 30% of Bulgari's shares.

This did not meet Sofia's expectations.

Because Melisandre already owns a subsidiary of the same type, Van Cleef & Arpels, the development momentum has been very good in recent years. In 1993, the turnover reached 3.5 million US dollars. Compared with 1990 before the acquisition, the overall turnover increased by 105%. %, the scale is not much worse than Bulgari.

The most important point is that Melisandre has a 60% stake in Van Cleef & Arpels.

Therefore, if only 30% of Bulgari's shares can be acquired, it will inevitably face a problem of resource balance.

With the same resources, it is self-evident which side the operator will favor, between a subsidiary holding 60% of the shares and a subsidiary holding 30% of the shares.

This is not what Sophia wants to see.

In order to avoid the emergence of competitors, large luxury goods giants often eliminate potential threats through early acquisitions.

LVMH in Simon's memory has done this kind of thing more than once.

However, Melisandre's company, which is in the rapid rise stage, has not yet entered this stage.

If Bulgari is to be acquired, Sophia naturally hopes that this jewelry and watch company, which is already better than Van Cleef & Arpels, can go further, instead of unequal internal competition due to uneven distribution of resources, and even lead to one of them eventual decline.

Therefore, if you want to maintain a certain balance, even if you don’t get the same 60% stake in Bulgari, according to the assessment of Melisandre’s acquisition team, this ratio must reach at least 40%.

30% and 40% of the shares seem to be similar, but for the Bulgari family whose shares have been dispersed in the hands of various family members, it means that Melisandre will become the largest shareholder.

The Bulgari family is willing to accept external investors, but they do not want to lose control of the family business.

If so, it might as well go for an IPO.

With Versace that followed, the question was even more interesting.

As one of the most popular luxury brands in recent years, Versace's turnover reached 1993 million US dollars in 6.5, and its revenue scale even surpassed that of Bulgari.

For a luxury business, this is actually quite astonishing.

You must know that Bulgari was founded in 1884 and has a history of 110 years, while Versace was only established in 1978. Even if Gianni Versace is talented, the growth of luxury brands cannot avoid sufficient accumulation.

So, what's the problem?

Sophia didn't play tricks in the profile.

Italian Mafia.

According to Sophia's investigation, as Simon remembered the rumors, the Versace brand was indeed used as a tool for money laundering by the powerful Italian mafia.

Ordinary people are always confused about money laundering, and always think it is very mysterious and high-end, but the actual operation process is very simple.

Take luxury money laundering.

The gang first signed a loan contract with the luxury goods company and lent the other party a large sum of money out of thin air.

The money certainly does not exist.

Then, the gangsters use their power to buy a large amount of goods from the luxury company's stores and contribute revenue to the luxury brand. The brand then returns this revenue to the other party in the form of debt repayment, and the original black money immediately becomes legal income.

In order to save costs, the purchased luxury goods can even be recycled.

Overall, however, money laundering tends to be very costly.

If someone can create a money laundering model with a cost of less than 30%, he will definitely be regarded as a guest of honor by the global gangsters.In fact, black money becomes legal income, but the tax and fee may not be less than 30%, and the total money laundering cost is often more than 50%.

The key reason why the governments of many Western countries maintain varying degrees of tolerance to gangsters is that these gangsters are actually contributing large sums of taxes to governments of various countries.

After the former Gianni Versace was shot, it was reported that the Mafia tried to steal Versace's ashes and demand debt from the Versace family. This detail can be seen.

Versace's operating conditions are so good, with huge profits every year. Even if there is a temporary problem with capital turnover, it can easily obtain financing through formal channels. How can it be possible to borrow money from the mafia?

Moreover, in the original time and space, at its peak in 1996, Versace's revenue once reached 11 billion US dollars.

This is even more unusual.

The profit margins of luxury goods companies are very high, and the revenue scale is limited by the market capacity, but it is difficult to expand.

In the 90s of the twentieth century, the revenue of 10 billion US dollars was definitely a giant in the luxury goods industry.Could it be that a designer who was born as a small tailor in the Italian countryside really has such a great charm to create all this?

You know, after Gianni Versace was shot, even after another 20 years, the Versace brand has been revived, and the turnover has never exceeded 10 billion US dollars. When Versace was acquired by another comprehensive luxury giant in 2017, its annual revenue was only 6.6 million euros, equivalent to 7.5 million US dollars.

Moreover, after the death of Versace, the Versace company quickly declined, and both revenue and profit plummeted. It was once hovering on the verge of bankruptcy where even catwalk models could not afford it.

Where is the problem?

In less than 20 years since its founding, a luxury brand giant that has achieved a revenue of over US$10 billion, even if the founder dies, and even if the heir is no longer successful, he should have sufficient anti-risk capabilities.

That being the case, the rapid decline of Versace, the rapid decline in revenue and profits, the reasons for which anyone with a little brain can figure out.

Because some of the original extra income disappeared.

Not only that,

The matter of stealing ashes to press for debts is certainly not aimless.

However, the Mafia will certainly not be so stupid as to 'kidnap' Versace's ashes for dunning, which is obviously just a warning.

Warning what?

It's very simple, coercing the dead is not as effective as coercing the living.

With the terrorist influence of the Mafia in Italy, Simon believes that even if Versace dies, the Versace family cannot escape certain 'debts' owed.

Therefore, in order to repay the 'debt', Versace must withdraw a large amount of funds from the company, which may cause the company's capital chain to dry up or even break. To make matters worse, the decline of Versace is inevitable.

Chapter 674 Melisandre's Next Target (5) (Revised)

Among the three candidate companies, Vacheron Constantin, which focuses on top-level watchmaking, has the longest history and has been founded for more than 200 years.

In 1987, Jacques Cutler, the head of Vacheron Constantin’s controlling family at the time, died. His children chose to sell the brand and it was bought by Ahmed Yamani, the former Saudi oil minister who had just immigrated to Switzerland.

As one of the few non-royal high-level government officials in Saudi Arabia, Ahmed Yamani achieved the position of the most important oil minister in Saudi Arabia by virtue of his outstanding personal ability, and single-handedly planned the Middle East oil crisis in the 70s, winning for OPEC. Lots of benefits.

It's a pity that personal ability cannot match the court struggle after all.

In the mid-80s, the Saudi crown prince, Yamani’s biggest backer, was assassinated and killed. The oil minister was dismissed by the new Saudi king in the second year and moved to Switzerland to avoid further purges.

At that time, Vacheron Constantin was just looking for a buyer, and Yamani took advantage of the opportunity.

According to media reports, the former Saudi oil minister loved watch collection, so he bought Vacheron Constantin.However, in Simon's view, this incident is more like the typical way of self-protection by name of many wealthy people from emerging countries who went to the west to buy basketball or football teams in memory.

Like Rolex and Patek Philippe, Vacheron Constantin is the top watch brand in Switzerland. Buying such a company can greatly enhance the owner's international reputation.

In many cases, fame is indeed an invisible talisman.

From the mid-80s to the present, after so many years, the Saudi political situation has long been stable, and no one cares about a long-lost former oil minister. Only then did Yamani begin to seek to sell this watch brand that took up a lot of his assets.

Unlike ordinary watch companies that mass-produce, Vacheron Constantin's annual output has just exceeded 11000 pieces so far.However, because the average price exceeds 1993 U.S. dollars, there are still many luxury-level limited editions every year. In 1.43, the turnover was equivalent to 2100 million U.S. dollars and the net profit was [-] million U.S. dollars.

During the initial contact, Yamani offered an offer of US$3 million.

Top watch brands are not able to expand rapidly through a large increase in production and strengthened marketing like clothing, luggage and luxury goods companies. Therefore, although their profits are stable, their growth is weak.Calculated based on the profit scale in 1993, the price-earnings ratio of 3 times the price-earnings ratio of 14 million US dollars is still too high.

According to the assessment in the information just now, if an acquisition is actually initiated, the company should be acquired at a price of no more than 2.5 million US dollars.

Sophia handed a glass of juice to Simon, but she still didn't want to get off his lap. Hearing the man's comment of 'all are good and all have problems', she said, "That's why I need you to make up your mind."

Simon took a sip of cold fresh apple juice, and casually wrapped his other hand around the waist of the woman in his arms, and said, "Three companies, you should want to get Bulgari the most, right?"

Sophia nodded, moved her body slightly to make it easier for the man to hug her, and said: "I have investigated many comprehensive jewelry and watch brands, such as Cartier, Bulgari, Piaget, etc., as well as our own Van Cleef & Arpels. These companies have a common feature, jewelry sales are the bulk, sales basically account for more than 70% of the brand’s total revenue, and watches often only account for about 20%.”

Simon smiled and said, "So, women's money is the best to earn."

Sophia rolled his eyes at him lightly, and continued: "Unlike luggage and clothing companies such as Gucci and CK, top jewelry and watch companies must not over-expand if they want to maintain their brand value, and the turnover of a single brand should be maintained within US$10 billion. The best. Therefore, if we want to expand this part of the business, we can only expand in disguise by acquiring multiple brands.”

Simon directly pointed out the problem facing Sophia: "The Bulgari family is not willing to sell too many shares, how do you plan to solve it?"

Sophia said: "I have considered that if we are willing to give up a part of Melisandre's shares, the Bulgari family should be moved."

Melisandre's acquisitions in the past were all in cash. Therefore, apart from Simon and Sophia, this company has no other shareholders.

Over the years, Simon has given Sofia a total of 20% of Melisandre's shares through several consecutive incentive equity transfers.

Because it is not listed, the outside world's valuation of Melisandre's company has been very different, generally ranging from 50 billion to 100 billion US dollars.Even at the lowest valuation of US$50 billion, Sofia is now a top rich woman with a net worth of US$10 billion.

However, Sophia was very low-key in this matter, and the shareholding structure of Melisandre Company has been kept secret. Many media even still think that Melisandre is fully owned by Simon, so the woman has never appeared in any on the wealth list.

Using the shares of Melisandre, one of the four women in the Westeros system, for a stock exchange acquisition, as long as the Bulgari family is not stupid, they should understand the gold content.

Simon had no objection to Sophia's suggestion, but said: "Think carefully, Sophie, if you use Melisandre's shares this time, and buy other brands in the future, the other party will probably make the same request."

Sophia said: "I know, but it is definitely okay for us to maintain a controlling stake for a long time in the future. For example, this time, I think it is enough to transfer 3% of the shares to the Bulgari family, and the rest will still be used. cash payment."

Simon asked again: "What about the valuation?"

If you want to exchange shares, Melisandre's valuation is also a very troublesome issue.

The huge difference in the valuation of Melisandre's company is not unreasonable, because this company is indeed not easy to value.In the past few years, due to different shareholdings and different types of subsidiaries, Melisandre's financial reports are calculated separately for each subsidiary.

Take 1993, for example.

Gucci is still the core of Melisandre, with a shareholding ratio of 75%. In 1993, its revenue was US$18.9 billion, with a growth rate of 32%, and a net profit of US$3.1 million.

Subsequently.

Van Cleef & Arpels: holding 60% of the shares, 1993 revenue of 3.5 million US dollars, a growth rate of 35%, net profit of 5900 million US dollars

CK: holding 55% of the shares, 1993 revenue of 1.7 million US dollars, a growth rate of 33%, and a net loss of 800 million US dollars

Chateau Latour: holding 100% of the shares. In 1993, the annual revenue was 3600 million US dollars, with a growth rate of 7%, and the net profit was 600 million US dollars.

Christie's auction house: holds 31% of the shares. In 1993, the auction turnover was 23.6 billion U.S. dollars, with a growth rate of 41%, and the net profit was 7300 million U.S. dollars.

According to the shareholding ratio and profit figures, in 1993, the profit of all Melisandre's brands attributable to the parent company was about 2.9 million US dollars.

However, for the development of these companies, Sophia did not implement full dividends, but only recovered about half of the profits.

That aside.

Calculated based on the net profit of US$2.9 million attributable to the parent company, and because Melisandre’s brands have maintained a high growth rate of more than 30% except Chateau Latour, which is Simon’s collection, if an IPO It is easy to obtain an IPO valuation of 20 times the price-to-earnings ratio, which is a market value close to $60 billion.

If it is really listed, it will not be a big problem for the price-earnings ratio to rise to more than 30 times after listing, and it will be at the market value level of tens of billions of dollars by then.

Therefore, now that both parties are not listed, if they want to adopt a share swap acquisition model, the valuation issue will inevitably lead to a back-and-forth between the two parties.

The best solution is of course to go public.

Sophia can probably guess Simon's thoughts. Although she has kept a low profile these years, she does not object to Melisandre's listing at the right time, saying: "For an IPO, this year must be too late."

Simon thought for a while, and said, "Let's talk about it, and try not to suffer too much. Moreover, we can give the Bulgari family about the listing in advance, which should also win us a lot of initiative."

Sophia nodded.

The market capitalization miracle created by Daenerys Entertainment’s IPO is widely known even in Italy.

Melisandre is also a 'woman' under the Westeros Corporation, probably no one would doubt her listing prospects.The Bulgari family should also be aware that if Melisandre’s equity is acquired under privatization, once Melisandre conducts an IPO, the value of the other party’s shareholding is likely to double within a year or two.

This rate of return is definitely very attractive.

After talking about Bulgari, which Sophia is most inclined to, Simon asked again: "What's going on with Versace?"

Sophia said: "I met Gianni Versace in Cannes during the Cannes Film Festival in May. After a few chats, the other party invited me to a party of the Versace brand, and then I had several contacts. In the middle of last month, Versace took the initiative Test whether I am interested in taking a stake in his company."

Simon asked with a smile, "What do you think?"

Sophia took the glass that had bottomed out unconsciously in Simon's hand, sipped the last of the juice through a straw, put the glass aside, and said, "Versace obviously wants to use our influence to get rid of the Mafia, so this The thing is not what I think, but what you think. You are a man, and of course you have to decide this kind of thing."

Why was Gianni Versace shot dead?

Because Versace wanted an IPO.

After an IPO, a company must publicly disclose its operations and financial status. If some people do not want to be caught, it is impossible to use the shell of Versace to launder money.

At the end of the day, Gianni Versace just wanted to get rid of the Italian Mafia.

It's a pity that it didn't work out in the end.

Simon has nothing to fear from the Mafia.

The Italian Mafia prides itself on being a group of desperadoes, and Simon, who dared to start a war in Africa, is not a higher-ranking desperado.