Chapter 230: Gucci and Latour

"Gucci is currently undervalued, and it's hard to get worse. Buying this company, even if I don't do well, you can replace me and still profit," Sophia said, hesitating before adding, "If you're not willing, there's another option. I can use the money you gave me to buy 10% of Gucci's shares. If you support me, the Gucci family might be willing to let go of control. In a few years, if Gucci's situation improves, you can consider buying more shares."

Simon listened without immediate response, asking, "What about your original plan for the wine business?"

"The backup plan was initially intended for the wine business," Sophia replied. "My target is Château Latour, one of the five first-growths of Bordeaux, and the only one currently for sale. The others, like Lafite and Mouton Rothschild, are in the hands of the Rothschild family, Château Haut-Brion with the Dillon family, and Château Margaux owned by Félix Potin company. Latour's controllers are two British enterprises: Pearson Group with 75% stakes and Harvey Sons & Co. with 25%. Pearson Group, mainly in education and publishing, invested in Latour just for investment purposes. The winery's operations have always been managed by Harvey Sons & Co. Recently, due to business difficulties, Harvey Sons & Co. started seeking to sell their shares, and my initial idea was to take over that 25% stake and the management of Latour."

Simon finally understood why Sophia had suddenly approached him with such an 'enticing' proposal last time.

"What happened next?"

Sophia's expression turned somewhat downcast. "I was about to finalize the deal with Harvey Sons & Co., but then another British company, United Leon Group, intervened and snatched the deal."

Simon, observing Sophia's expression, asked, "You just let it go without a fight?"

"United Leon Group is a comprehensive liquor, food, and fast-food company with strong capabilities. They not only bought Harvey Sons & Co.'s shares but also sought to acquire Pearson Group's stakes. The offer for Pearson's 75% shares has reportedly reached 100 million pounds, and it could even go higher," Sophia explained. "Latour is precious, but not worth that high a price. Félix Potin company bought Château Margaux, another of the five first-growths, for just 16 million dollars in 1976. In my view, Latour's current actual price should be around 100 million dollars. The price I roughly agreed with Harvey Sons & Co. was about 25 million dollars."

100 million pounds, with the current exchange rate of approximately 1.6 dollars to the pound, amounts to 160 million dollars.

Simon had no doubt about Sophia's judgment in this matter, having known her family's background in the wine business.

Hearing the name of Latour, Simon was actually very interested.

A French national treasure like Château Latour, even if not profitable, would be a worthwhile collection, far surpassing antiques and paintings.

However, since Sophia said Latour was not worth that high a price, Simon was not inclined to compete with United Leon Group for it. He did not have the strength to frivolously spend a couple of hundred million dollars.

Jennifer quietly stood at the bedroom door holding several clothes.

Noticing his assistant, Simon looked at his watch and said, "It's about time. Let's discuss further after dinner with Gucci's representatives."

After getting dressed, he headed towards the bathroom.

The dinner with Gucci's representatives was held at an Italian restaurant near Kendale Hotel.

Gucci's founder, Guccio Gucci, had three sons, and the family was now in its third generation, quite extensive.

After Guccio Gucci's death, the company's shares were not managed through a trust fund but distributed evenly among family members, leading to years of internal strife.

By now, most Gucci family members realized that continuous infighting would only lead to the company's collapse. Once Sophia got involved and they confirmed Simon Westeros, a rising young tycoon, supported her, a consensus was quickly reached.

In fact, Sophia's ability to simultaneously persuade three warring factions to send representatives to Melbourne for acquisition talks had already impressed Simon.

Otherwise, he would have directly refused when Sophia mentioned this over the phone.

Although Simon had a firm attitude towards Sophia in private, during the dinner, he formally discussed the acquisition details with Gucci's representatives.

Simon did his homework in advance, and the dinner was a pleasure for both host and guests.

Around 10 p.m. Melbourne time, after the dinner, although the deal wasn't completely finalized, everyone knew it was a done deal.

Back at the hotel suite, Sophia looked at Simon somewhat peculiarly.

What surprised her wasn't Simon's preparation or his attitude change before and after the dinner, but his fluent Italian.

The Gucci family, being Italian, had few English speakers. Sophia, having grown up in Corsica, closer to Italy than mainland France, was proficient in Italian.

She initially thought to translate for Simon at the dinner table, but unexpectedly discovered that Simon's Italian was even more fluent than hers, clearly earning him great favor from the Gucci family.

Sophia knew Simon spoke French, but Italian was unexpected. Considering Simon's various skills, her curiosity about this young man intensified.

How did a twenty-year-old grow to be so dazzling?

Entering the room, they didn't stay in the living area but went to the study.

Simon, noting Sophia's odd expression, gestured for her to sit opposite the desk. As he opened a folder from the cabinet, the phone on the desk rang.

Around this time, he usually discussed business with the U.S. office. Signaling Sophia to wait, Simon picked up the phone. The first call was from Nancy Brill.

Simon talked with Nancy in a low voice. Jennifer brought in coffee for both, and then sat quietly on the sofa, flipping through a document.

Nancy insisted on mortgaging Daenerys Entertainment's shares with no risk, but Simon did not agree, needing zero risk. Finally, after much persistence from Nancy, he agreed to a 5% mortgage, still feeling slightly disadvantaged.

Of course, Simon understood that with increasing personal debt, banks would not allow him to secure funds solely through credit guarantees; collateral was inevitable.

Hearing Simon's comments, Sophia looked a bit bewildered but defended, "Boss, I'm not trying to trap you."

Simon chuckled, explaining, "We recently added a French executive to the company; I'll introduce you sometime. You two have some similarities."

Sophia nodded, waiting for Simon to continue.

Simon wasted no further words, opening the folder, "I've recently collected some data on LVMH, and I must say, your approach is very correct. However, you haven't managed a company before, which is my concern."

Sophia couldn't help but retort, "Boss, you also had no experience managing a company before, yet Daenerys Entertainment has grown rapidly."

Simon glanced at her, "You're comparing yourself to me?"

Sophia instinctively wanted to roll her eyes but refrained, realizing she couldn't compare with Simon. Thinking it over, she added, "I majored in Business Administration in undergrad and got an MBA three years ago. I helped manage my ex-husband's family business and gained sufficient experience. My work in real estate brokerage was excellent; I could have started my own agency by now. Doesn't this prove I have the capacity to manage a company?"

Recalling Sophia's background, Simon finally nodded, "Alright, I'll give you one year..."

"At least two years, boss. Gucci is in bad shape now. Adjusting management, reorganizing product lines, reshaping the corporate image - these must be done carefully. To rejuvenate Gucci, I need..."

Simon, interrupted mid-sentence, felt displeased and cut her off, "No negotiating with me."

Sophia paused, recalling this was what Simon had just said to Nancy over the phone. Amused, she stood her ground, chin slightly raised, "Two years."

Simon fingered the documents, finally nodding after a moment, "Fine, two years."

Sophia was surprised by his immediate agreement, feeling a bit triumphant about her treatment compared to Nancy's.

Of course, Simon had no intention of favoritism. Having calmed down, he agreed, seeing the reason in Sophia's request.

They then discussed acquiring Gucci shares and subsequent operations.

Simon's ultimate goal in acquiring Gucci was to build a luxury group like LVMH.

Years later, as the world's largest luxury group, LVMH's market value surpassed 100 billion dollars. Although not comparable to tech giants like Apple or Amazon, reaching such a scale as a non-tech, non-monopolistic enterprise was remarkable.

According to his memory, at its peak, LVMH owned over sixty top luxury brands, including Dior, Givenchy, Hermès, and Louis Vuitton, with Gucci once a target.

In the original timeline, following LVMH's successful luxury conglomerate model, other companies followed suit, leading to a luxury market dominated by LVMH, Kering (formerly PPR), and Richemont.

Richemont, based in Switzerland, mainly focused on jewelry and watches, with less direct competition with the other two.

Kering's brand portfolio was similar to LVMH's, often in fierce competition. Gucci, Kering's core luxury brand, supported half of the group's value, worth at least tens of billions of dollars.

At this time, LVMH was just integrating and still in its infancy. Bernard Arnault hadn't fully controlled it, with tense relations between LVMH management and him as the major shareholder.

Brands like Givenchy, Hermès, Fendi, and Bulgari weren't part of LVMH yet.

Kering and Richemont were not yet formed.

LVMH was built by Bernard Arnault, with Christian Dior as its foundation.

Now, with Simon acquiring Gucci, a brand with a comprehensive line of fashion, bags, and cosmetics, he had the foundation to build a similar luxury conglomerate.

Following LVMH's original expansion model and leveraging Daenerys Entertainment's media resources in Hollywood, Simon might even build a top luxury empire, replacing LVMH in the original timeline.

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