Chen Zhiwen nodded and said: "I will entrust an investment bank to conduct this transaction. The price will be 1.3 times the average stock price in the past three months. It is an all-cash transaction. However, the premise of this transaction is that Mr. Pierce's team needs to retain at least In the next ten years of operation, we will sign a corresponding agreement, and the content of the agreement can be further negotiated by our lawyers."
"I naturally want my team to be able to work stably, but I am almost 60 years old. Doesn't Mr. Chen find a younger professional manager?" Pierce said with a smile.
"Mr. Pierce's value far exceeds Fedmart's assets. I will look for professional managers who focus on management and operations. I hope that Mr. Pierce can stay and be responsible for the company's operating philosophy, which means you are responsible for the overall direction and details. Just have other people in charge. So it won’t be too tiring, and age is not that important. Among large American companies, there are many CEOs over 60 years old." Chen Zhiwen said with a smile.
Older age does not affect a person's business ability. This has been proven by later generations. One of the advantages of being older is that when the company reaches a huge scale ten years later, he will not have any ambitions. In the original history, By the mid-1980s, Pierce could no longer keep up with the expansion of his second startup, Price Club, and eventually merged with people who started businesses from his company. In fact, Price Club was larger than Costco at the time. big.
If it weren't for the age factor, how could Pierce voluntarily withdraw from the management of the new company, or never sell it at all? Then the largest warehouse supermarket chain in future generations would be Price Club.
Of course, in order to ensure that Pierce has enough motivation, the shares that should be given will still be given. Whether it is him or other management staff, they must be motivated and have desire.
Furthermore, they deserve it. Anyway, when the supermarket chain business in the United States has really reached a large scale, it must be listed. Only by going public can the interests of all parties be balanced. But that’s a thing for the future.
"Mr. Chen will not interfere with the company's operations?" Pierce asked.
"I won't interfere, I will only invest. How much money you need, as long as it's reasonable, I will definitely give it. I just hope you can expand quickly, but there are several aspects where I need to intervene. I will make it clear to you now. If you have any opinions or ideas, you can express them and we will discuss them together." Chen Zhiwen said with a smile.
"Please tell me." Pierce nodded.
Chen Zhiwen said: "First, regarding the way supermarkets operate, warehouse-style supermarket chains including Fedmart are actually not my ideal warehouse-style supermarkets. My ideal warehouse-style supermarkets should target all users, including ordinary consumers. ordinary people instead of a designated group, thus rejecting more than 90% of customers."
"This is impossible. The core of a warehouse supermarket is those commercial customers. This is our core." Pierce shook his head and rejected: "We provide discounts for dedicated members, and they spend with us for a long time."
"If you think about it this way, warehouse supermarkets will always be small-scale and cannot be compared to supermarkets such as Sears and Kmart, or even one-tenth the size." Chen Zhiwen said with a smile.
In the 1970s, including all previous warehouse supermarkets, they also had a membership system, but unlike Costco in later generations, their members were selective. Some were civil servants, some were specific groups, some were nearby companies, and others As a non-member group, if you go to the supermarket with cash, you will not be able to get in.
In later generations of mainland China, if you go to a Metro supermarket before 2010, you won’t be able to get in without a membership card, and it’s useless even if you have money. In the 1970s, chain warehouse supermarkets in Europe and the United States had this kind of business strategy.
Bind specific groups, give discounts, and then cooperate with each other to get what they want.
"Our customers all like unique discounts. If everyone can enter, it will only disrupt the current system. Moreover, the warehouse model is a business model with fewer SKUs and more quantities. Will the public consume like this? If the public likes it, If you are shopping in an ordinary supermarket with a large number of SKUs, such a change will destroy the once stable customers." Pierce analyzed with a frown.
"How to operate it is a commercial secret. If I can acquire fedmart, I will naturally tell you. And even if we reform, we can also set up another brand and then open a separate store to try instead of changing the existing model. In this way, Come, the risk will be reduced a lot." Chen Zhiwen said with a smile.
SKU refers to the type of product in the retail field. For example, there are 50 brands of toothpaste in a supermarket, and each brand has an average of 3 models. Then there are a total of 150 SKUs. The number of SKUs directly determines the perfection of the supermarket products. It also determines the cost.
The more SKUs, the more resources need to be invested in procurement and the higher the operating costs. However, ordinary supermarkets have no choice. Enough SKUs can meet the different needs of thousands of customers.
Warehouse-type supermarkets are different. Their core is to have fewer SKUs. Each SKU has a large reserve. They follow the route of selling specific products to specific groups, such as corporate material procurement. These are large quantities and have similar models and brands. . It can even be said that warehouse-type supermarkets gradually appeared in the 1950s because of the special needs of specific business groups, which ordinary supermarkets could not meet.
However, with the development of social economy, the situation in 20 years will be completely different from that of 20 years ago. Warehouse supermarkets have also reached an era of change. As for how to change, Chen Zhiwen will naturally not say that the other supermarket has not yet obtained it. , how stupid it would be to say it.
In fact, many of the simple business models of later generations can be explained clearly in one sentence, and others can quickly understand them, but it is difficult to figure them out for the first time. There are many such things in human history, such as the industrial industry a few decades ago. The assembly line, the early profit model of countless Internet companies in later generations such as Tengxun and Guge, etc.
"Then I don't want to use my existing supermarkets for testing." Pierce said: "This will affect the entire FedMart brand."
"No problem, we can just buy another warehouse. If it doesn't work, just build one." Chen Zhiwen agreed boldly. In the United States, except for big cities, land prices are not expensive in other places, not to mention that warehouse supermarkets are generally in the suburbs. The largest cost of building a supermarket may be the construction cost, which is usually several hundred thousand dollars.
"Okay, if we really cooperate, let's discuss it later." Pierce naturally doesn't care if it doesn't affect the current brand.
"Okay." Chen Zhiwen continued: "The second point is the procurement channels. I hope that supermarkets will tilt their procurement towards Asia instead of mainly purchasing in the United States."
