Different from the common leveraged buyout in the 1980s, Cersei Capital bought LTD and did not intend to split it up and sell it for quick cash out in a short period of time. Instead, it preferred to conduct a secondary listing after long-term operation.
Therefore, in terms of funding, it is impossible for Cersei Capital to adopt the short-term high-interest lending and junk bond financing models that were common in the 1980s.
In order to raise the funds needed to acquire LTD, Cersei Capital was already preparing to issue a new fund specifically for this acquisition before the official acquisition began.
The acquisition deal was concluded, and Cersei Capital has basically completed the fund-raising work for this fund.
Although the acquisition of more than 2 billion U.S. dollars is far from comparable to the acquisition of Reynolds Nabisco with a total transaction value of 33 billion U.S. dollars, it is still in the context that the United States has not completely recovered from the aftermath of the bond market collapse a few years ago. This acquisition is already the largest private equity acquisition in the past two years.
In order to give investors confidence and for investment considerations in the Westeros system itself, after the transaction was concluded, Westeros Company quickly announced that it would purchase 10% of the shares of LTD Company at the agreed price, minus the Wexnay family For the other 10% of shares retained, Cersei Capital actually bought only 80% of LTD's shares, requiring a payment of US$1.96 billion.
The Westeros Company's direct involvement enabled investors who had previously signed the intention subscription agreement to quickly fulfill their fund subscription shares, thus ensuring the smooth completion of the acquisition.
The specific acquisition process would take two months to complete, but Simon quickly contacted LTD founder Leslie Wexner.
Leslie Wexner's fortune is very typical in this industry.
It started out as a fashion store, and then continued to increase the scale of the chain over the next two decades, eventually becoming an LTD company with thousands of chain stores in total.
The Victoria's Secret that Simon cares about most is actually the underwear chain brand that Leslie Wexner bought from another businessman in 1982.
Because it is not the foundation of its origin, although Victoria's Secret has developed very rapidly in recent years, and later when LTD was mentioned, everyone would only think of Victoria's Secret, but in fact, Leslie Wexner still regarded LTD's women as Sub-brands such as fashion and sportswear are the core of operations.
Therefore, compared with the later Victoria's Secret brand accounting for more than 60% of the parent company's sales, Victoria's Secret at this time only accounted for just over 20% of LTD's sales in 1991.
Economic downturn, over-expansion, abandonment of the original 'Limited Brands' business strategy and unbridled pursuit of more areas ultimately caused LTD to fall into operating difficulties after the collapse of the US bond market.
Speaking of which, Leslie Wexner, the founder of LTD, is a very radical businessman, which is actually very similar to the impression Simon gives to the outside world.
The Westeros system has risen as quickly as a miracle in just six years. Simon's various bold and adventurous moves during this process cannot even be described as simply radical.
However, Simon, who has lived in two lives, has always known what he is doing.
Many of the Westeros Company's layouts are unreasonable to outsiders, such as the crazy investment in Ygritte Company in the past two years. For Simon, it is just to seize some opportunities in advance that are destined to explode the industry.
Leslie Wexner could not have Simon's prophetic advantage.
LTD's continued expansion over the past two decades is more of a natural move by a businessman who dares to take risks.
The fashion field is already a very competitive Red Ocean market.
LTD's continued over-expansion has also fallen into the homogenization problem that many fashion companies cannot avoid: after all, it is difficult for the fashion industry to come up with too many new tricks.
The homogeneity of clothing products is serious, the scale of enterprises is too bloated, and relative costs have increased, which will inevitably lead to a decline in brand competitiveness.
In recent years, LTD's sales of women's fashion and sportswear have continued to decline along with the sluggish economic situation. The only one to buck the trend and rise is Victoria's Secret, which focuses on underwear.
Simon was also privately curious if this was the legendary 'lipstick effect'.
However, the original space LTD company began to turn more attention to the operation of Victoria's Secret in the 1990s and returned to the 'limited brand' business strategy of focusing on core brands. This was probably inspired by the market performance of Victoria's Secret in the early 1990s.
LTD is headquartered in Columbus, Ohio.
Ohio is located in the northeastern United States, bordering Pennsylvania to the east and the Great Lakes to the north. Unlike the winding and mountainous western states and counties, Ohio is located in the endless eastern plains. Columbus, the capital of Ohio, is located right in the middle of this plain.
After Simon and Janet returned from Australia, they quickly accepted Leslie Wexner's invitation and came to Columbus, Ohio.
Of course, there are other reasons.
Simon's 'butterfly effect' on the world became more and more obvious, but it did not change what happened.
For example, the Los Angeles riots at the end of April 1992.
The cause of the incident was that in March 1991, a black young man, Rodney King, was violently treated by the Los Angeles police for resisting arrest while driving while drunk. The incident was captured on video by a passerby and sold to a television station. As a result, the major TV stations, which are accustomed to "creating topics", edited out the first half of the video of Rodney King's various behaviors of resisting arrest, leaving only the scene of the opponent being beaten on TV.
On April 28, the Los Angeles District Court acquitted the four police officers involved based on the complete record of the incident, which aroused dissatisfaction among the black community and triggered large-scale riots.
Although the riots in my memory only occurred in South Central Los Angeles, who knows whether there will be any unusual changes this time.
As soon as the incident happened, Simon quietly left Los Angeles and met up with Janet who came from New York in Columbus.
Due to habit, a 50-acre farm-style manor has been purchased in Columbus in advance.
Unlike Los Angeles and other large cities along the coast where riots have occurred, Columbus, located in the central plains, appears to be very peaceful.
This is actually not without reason. Located in the conservative northeastern United States, the proportion of people of color in Ohio is much lower than that of states on the east and west coasts. In this era, the proportion of white people is still over 90%.
Simon didn't feel much about the riots, and it wasn't the first time something like this had happened in this country.
At the farm estate in the northern suburbs of Columbus, Leslie Wexner had no intention of talking about this sensitive incident.
For politicians, this matter is wrong no matter which side they take. Therefore, President Bush did not come forward to make peace with the riots until two days after the riots, and made a few gentle appeals. It's an election year, and the candidates have been surprisingly tight-lipped about the riots.
It’s all votes!
Simon and Leslie Wexner are both public figures. Even without the scruples of professional politicians, saying too much will only lead to many mistakes.
Although it is clear that when a country moves towards a certain extreme political correctness, it is often the consequences of this constant silent concession, and Simon has no intention of trying to change anything.
A certain deep-rooted pessimism in his bones made him more accustomed to turning a blind eye to too many things.
Don’t talk too much about politics, of course we still talk about business.
Today is May 1st, and it’s late spring and early summer before we know it.
Strolling along the busy farm roads, ignoring the distractions from the outside world, my mood became very comfortable unconsciously.
Over the past few days in Columbus, Simon has been working non-stop with Leslie Wexner to discuss the next steps for LTD.
LTD's difficulties in recent years have proven that the company must make changes.
In the original time and space, LTD abandoned many peripheral brands to focus on the operation of Victoria's Secret, which was the result of this change.
However, combined with the information in memory, Simon found that LTD could actually make another attempt.
Now that it has proven to be very successful, the sexy marketing method of promoting the Victoria's Secret brand through the Victoria's Secret Show must of course be retained, but for LTD's women's fashion and sportswear businesses, Simon also proposed to Leslie Wexner Another concept of 'fast fashion' that is gradually taking shape in recent years but has not developed and grown.
Many years later, the world's most famous affordable fashion brands, Zara, H&M and GAP, all adopt the 'fast fashion' operating model.
To put it simply, fast fashion is the rapid promotion of fashion trends displayed in major fashion weeks in relatively cheap consumer fields in a very short period of time.
First-class design, second-class brand, third-class price, this is a very vivid summary of fast fashion brands.
To put it bluntly, the so-called fast fashion is actually the rapid plagiarism and imitation of fashion trends created by major top luxury brands.
In Simon's memory, Spain's Zara brand was sued every two days for plagiarizing designs, and the infringement fees paid every year reached tens of millions of dollars. However, this company has never meant to 'reform its old ways' and still tirelessly dispatches its large team of designers to major fashion shows.
Compared with the huge profits, the annual infringement fees of tens of millions of euros are really not worth mentioning.
Amancio Ortega, the boss of Zara, once used this world-class fast fashion brand to squeeze out Warren Buffett and rank among the top three richest people in the world with a net worth of tens of billions of dollars.
Whether it is Zara in Spain, H&M in Sweden or GAP in the United States, the three major fashion giants have been established many years later. However, the three companies are still a long way from their peak. LTD already has a deep foundation in the fashion field. It is not too late to transform into the fast fashion field before the rise of the three giants.
After the affordable fashion chain has developed to a certain extent, the further breakthrough of the brand has been a problem that has troubled Leslie Wexner for a long time.
Unlike luxury brands, affordable fashion is too easy to homogenize. The biggest problem is that it is difficult to maintain its own distinctive brand characteristics for a long time. This problem cannot be solved by large-scale marketing alone.
The concept of 'fast fashion' that Simon proposed in recent days gave Leslie Wexner a feeling of enlightenment.
Since you cannot maintain certain fashion brand characteristics that are enough to attract consumers for a long time, you should do the opposite and always pursue the latest and fastest fashion trends.
As for the moral risks of plagiarism and imitation that may be involved, for a businessman who has been in the mall for decades, there is no psychological burden at all.
After several days of discussion, Leslie Wexner accepted Simon's suggestion.
In the next step, while focusing on promoting the Victoria's Secret brand, LTD plans to integrate its fashion business and build a fast fashion brand using the foundation of LTD's earliest brand called 'Express'.
In addition, LTD will also sell some non-core businesses. This kind of sale is certainly not the kind of sale after the leveraged buyout in the 1980s.
All funds obtained from the asset sale will be used to develop the 'VS' and 'Express' brands.
"Simon, regarding the idea of the underwear fashion show you mentioned yesterday, I thought about it seriously last night. It is a great idea. However, according to your idea, invite a group of top models in the fashion industry, and also For a TV broadcast, the budget would be a little too high, so maybe we could start off a little simpler."
"I have also considered the budget issue," Simon smiled and said, "Les, how about this. This show is jointly produced by Daenerys Entertainment and LTD Company, and both parties share 50% of the budget. Dan Nelis Entertainment is responsible for distribution on television platforms and videotapes.”
Strolling along the green farm roads, the scenery is pleasant but not intoxicating.
Leslie Wexner quickly calculated.
Simon had gotten to know both LTD and Leslie Wexner. Likewise, after the two met, Leslie Wexner also studied the young man's career very carefully.
Daenerys Entertainment can sell a Gucci brand documentary for tens of millions of dollars at the box office, can make Madonna's concert documentary a box office hit, and can make an Antarctic landscape documentary a box office dark horse. So, this lingerie and fashion show Show, it's hard to say whether it will have the same value.
Thinking of this, Leslie Wexner quickly asked: "Simon, we share the budget, so the profits should also be shared, right?"
Simon glanced at the middle-aged man in his fifties next to him and said: "Les, LTD can get a major promotion of the Victoria's Secret brand with only half of its budget. Isn't that enough?"
"But, after all, we bear half of the budget."
Leslie Wexner hesitated, but still did not agree that LTD could bear the entire production budget.
According to the vision of the young man next to him, such a big show would be impossible to win without tens of millions of dollars in funding.
Investing tens of millions of dollars at a time for a fashion brand catwalk is really a bit risky.
And it seems it's not just about money.
This matter definitely needs Simon's personal planning, including inviting top supermodels. Without Simon's help, it would be difficult to make it happen.
Although Victoria's Secret's performance and popularity are very good, after all, it is just an affordable underwear brand.
For many supermodels, walking for such a brand is a bit pricey.
If you still get together with other supermodels, then your status will be even lower.
However, it would probably be easier to accept if it was a catwalk for a project planned by Simon Westeros.
Leslie Wexner is still aware of the two "waist essence" and "leg essence" who suddenly emerged in the fashion circle last year.
Westeros created two rapidly rising supermodels in just one play.
With this young man's strong influence in Hollywood and the fashion industry, it is absolutely easy to assemble a team of supermodels to walk for Victoria's Secret.
This is something that LTD at this stage simply cannot do.
Victoria's Secret in the original time and space, the underwear show first started in 1995.
However, unlike the growing momentum after the new century, the initial catwalk could only invite one or two quasi-A-list supermodels as the main features. It was not until ten years later that the Victoria's Secret show finally reached its peak state of gathering gods.