"In that case, we can discuss the specific content of the cooperation." Phil Knight said.
"If supply chain cooperation is not a problem, then the problem you are troubled by, Phil, is the problem of our investment?" Chen Zhiwen said with a smile.
"Yes, Eric, you want 25% of Nike's shares at one time, which is too much. Not only I can't agree, but other shareholders are also not willing." Phil Knight paused and said.
"Then there should be no problem with the bank." Chen Zhiwen said with a smile.
"It's really not a problem with the bank." Phil Knight nodded and said. Not only did the bank not agree, but they also wanted Chen Zhiwen to acquire a larger proportion. The more Chen Zhiwen invested, the more funds Nike would naturally receive. , the risk of bank loans will be lower. Anyway, the bank only cares about your company's ability to repay normally, and it doesn't care about the equity ratio.
"Based on Nike's current economic situation, if I buy 25% of the shares, I can bring an investment of US$5 million to the company. You are the boss of Nike. You know that without so much money, Nike's situation will be difficult to solve." Chen Zhiwen said with a smile. .
"I want to know, if our board of directors has not reached an investment agreement with you, will you stop building a factory for us in Hong Kong?" Phil Knight did not answer directly, but asked another question.
"Of course, you also know some of my investments in the United States and the situation in Hong Kong. How could I specifically build an OEM factory for your company and build a very low-profit OEM factory?" Chen Zhiwen said formally.
Taking advantage of Nike's ultra-rapid development in the next two decades to master the high-end shoemaking industry chain is one of Chen Zhiwen's core business strategic plans that he set as early as when he traveled to Hong Kong. He first started in Hong Kong and moved to Hong Kong in the 1980s. The Mainland, with its population size and cost-effectiveness, can completely swallow up Nike's massive orders, and then use its own capital and the Mainland's own market to develop its own sports brand, which can naturally be derived from the entire clothing brand, and even decades later Then counterattack the European and American markets.
Although the goal is very far-reaching, and there may be many changes in the future, at least from a business logic perspective, this line of thinking is no problem. For this reason, he also deliberately moved Berkshire Hathaway, which is about to go bankrupt, to We got Hong Kong so that Hong Kong could have high-end textile materials to meet the needs of Nike OEMs. After the mainland reopens, we will either bring the Berkshire Hathaway factory there or invest in mainland companies. To build this factory, the arrival of Berkshire Hathaway's factory in Hong Kong will be enough to train hundreds of relevant talents. Besides, the mainland will not be weak in textiles in the future.
We spend so much effort just to have relevant industrial chains locally. Otherwise, we would have to purchase raw materials from overseas. The cost is one thing, and the time difference is even more intolerable.
The core point of the entire plan is to ensure that we can steadily obtain orders from Nike. But how to stabilize it? Naturally, like Wal-Mart, you have to buy enough stocks to have a certain degree of influence, and the products you can supply are of high quality and low prices, so that you can ensure that there will be no problems in the future.
Although Wal-Mart's market capitalization is much higher, because it is listed, you can still spend money to acquire stocks. However, Nike has not been listed, so it will have to wait until 1980, and by then the acquisition will naturally be possible to copy Wal-Mart's model. But this delayed at least 5-7 years.
Moreover, Nike's supply chain was mature at that time, and shoemaking was not like daily goods in supermarkets. It had a certain technical content. Even if I became a shareholder of Nike in the future, I would not be able to make high-quality and cheap sports shoes because I did not have the relevant technology. So even if he becomes Nike's largest shareholder, he can't let Nike use his goods, right?
Therefore, this year is the only window. Nike is deeply in debt due to huge losses in its factories in the United States. While it is short of money, it also urgently needs to divest its production department. At this time, he will naturally take over, but he must also obtain Nike's affirmation. Otherwise, if Nike comes back to life in the future, the order will be given to others when it changes hands, what can I do?
As for technology, now that Nike has no suppliers, it will inevitably support itself. As long as it masters the relevant technology and becomes one of Nike's major shareholders, there will be no big problems with orders.
"But the idea of the board of directors is that if Eric can build a large shoe-making factory in Hong Kong, Nike's economic problems will be greatly alleviated, so they are willing to accept you as a shareholder, but they are only willing to provide 15% of the stock. Quota," Phil Knight said.
"15% is too little. I need to spend millions of dollars to build a factory for Nike in Hong Kong. What I need to ensure is that Nike's orders will always be given to me. If my factory is built, your orders will not be given to me. What should I do? Who will be responsible for my losses? Or we can sign a long-term mandatory supply agreement." Chen Zhiwen said with a smile.
"Eric, as long as your quality is up to standard and the price is right, we will naturally find you for long-term cooperation." Phil Knight quickly shook his head and said, once such a contract is signed, Nike will be controlled by this supplier. In the history of business, except for some top technology monopoly suppliers, others have never heard of such a thing.
"So I should only bear the risk of building the factory? Phil, do you think this is fair to me?" Chen Zhiwen said with a smile.
"This" Phil Knight is also a little embarrassed. He also knows that it is very unfair to let others invest millions of dollars to build a factory without any contract. In terms of business cooperation, he is not one of them. If you are a very large customer, there is no guarantee that they will not treat you badly.
"Let's make a compromise, 20% of the shares, I will invest 4 million US dollars in capital, and sign a ten-year OEM contract. As long as there are no quality problems in my factory within ten years, Nike will have to transfer at least half of it to How about giving orders to my factory? It's only ten years, it's not a long time, right?" Chen Zhiwen continued.
Any larger company will not choose just one supplier when purchasing. This is a normal operation to avoid risks, and this is true for any industry.
Long-term mandatory supply agreements only exist in a few special industries, and are almost non-existent in ordinary textile and footwear industries. Ten years is a time for both parties to accept it.
"In ten years, we can discuss it. I think the board of directors will also seriously consider this issue." Phil Knight said with some confidence.
"Okay, then after you go back and confirm, inform me as soon as possible. Building a large factory here in Hong Kong will also take a certain amount of time to prepare." Chen Zhiwen nodded and said.
Naturally, ten years is not safe, but if the so-called long-term contract is too mandatory, then Nike will never sign it. Even if it can be negotiated in the end, it will waste too much time. It is too urgent to force it. Nike is completely Other investors can be found at other costs.
Nike's current problem is actually a matter of money. As long as there is enough money, all crises can be easily solved. Chen Zhiwen only proposed the best solution to the problem, and it is definitely not the only option. Nike's board of directors includes the ones in front of him. Founder Phil Nike actually basically doesn’t want outsiders to acquire too much equity.
And if the contract is not very mandatory, then Nike will be able to bypass it in the future, but it will lose its meaning.
Now we need a ten-year agreement, just to ensure that we can obtain stable supply in the first ten years, and then to obtain relevant technical knowledge. If we want to stabilize it in the long term, the best way is to obtain more equity. We only need to Wait a few years for Nike to go public, and the stocks on the market can be traded. If you can, you can easily continue to increase your own equity. After all, a newly listed company will not cost much.
"No problem, I will arrange for the board of directors to confirm this matter as soon as possible." Phil Knight promised.
PS: To explain, a large investment actually requires a long period of negotiation, ranging from months to years. Therefore, some investments in the book will not end in several consecutive chapters, but will be discussed as much as possible. If reasonable, come back to the ending in a few months.
However, in some cases, such as non-strategic investment real estate layout, etc., it will be negotiated in one chapter, but the prerequisite will be that a professional team has negotiated for a long time, and then the protagonist comes forward to negotiate with the other party's boss to finalize the final link.
Relatively speaking, this should be about finding a balance between being uncool and realistic.
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(End of chapter)
