章節 762: Chapter 762: A bank is needed
Seeing Arthur Blank's attitude change, Xia Yu immediately realized that he had scared him and was inclined to back down.
Therefore, he immediately adjusted his pace, not wanting Arthur Blank to continue to calm down.
He changed the subject and asked knowingly, 'Mr. Blank, I wonder how many shareholders there are in the Home Depot company?'
Arthur Blank thought for a moment and said, 'Including myself and Bernie Marcus, there are a total of 146.'
This kind of equity distribution is extremely rare for a company that has only been established for two years.
Xia Yu was therefore surprised and asked in puzzlement, 'Why are there so many shareholders?'
Arthur Blank did not tell the real reason. After all, the real reason was that no major capital was willing to invest in them, so they went around soliciting small investments to make up the capital.
He said flatly, 'The main reason is to stabilise the supply chain of Home Depot at the beginning. Therefore, these shareholders, who are basically suppliers, have invested a little money to take up a small part of the equity.'
Xia Yu let out a light 'oh' and said with a sudden realisation, 'So it was a strategic investment. It was a very wise choice in the early stages of the company's development.'
He then changed the subject and said, 'However, there is also a downside. Being tied to suppliers will affect the choice of brands, and it may be detrimental to future competition and external expansion.'
Arthur Blank felt a little embarrassed when he heard this. Xia Yu was right, he had considered it, but at the time, there was simply not enough capital, and they were still relying on suppliers to give them credit. They had no inventory, and were just fooling customers by putting empty boxes on display. Therefore, Home Depot was very dependent on suppliers, and they were all well taken care of. Even now, they are not in a position to counter pressure on suppliers.
But this is the way the retail industry works. When the volume is small, the upstream has the say, but when the volume is large, because of the importance of the market, the right to choose naturally comes into their hands, and it is time for the downstream to manipulate the upstream.
There have been too many cases of large-scale Chinese supermarkets bullying suppliers in the future, and some suppliers have even been forced into bankruptcy by supermarkets.
Turning back to the topic of Home Depot, with its current shareholding structure, in future operations, if a supplier shareholder's product quality is not outstanding, but the choice of Home Depot is affected due to the relationship with the shareholder, that will definitely cause trouble.
One or two are fine, but with more than 100 supplier shareholders like there are now, the probability of problems is too high, which is a big hidden danger.
And when you go beyond Atlanta and Georgia, the strength of some suppliers may not be able to keep up. If you purchase products in Atlanta and then transport them to other regions, it will greatly increase logistics and management costs, which is not cost-effective.
The logistics costs for building materials are too high!
Although this is the case, it is absolutely impossible to admit it. Arthur Blank said with righteous indignation, 'Mr Xia, we treat the selection of each supplier with extremely strict requirements. So far, there have been no problems.'
'And in the future, I believe we will not let personal relationships affect the healthy growth of the company, even if the problem is with one of the minority shareholders!'
Xia Yu smiled, not dwelling on the issue, feeling that the timing was right, and he planned to bring up the topic for discussion.
'Mr. Blanc, retail companies have a great demand for capital. I have also learned about your company. Your company has outstanding advantages in management, but the disadvantages of capital are also very obvious. I can help you with this, what do you think?'
Arthur Blank looked embarrassed and hesitant.
Xia Yu pondered for a moment and asked bluntly, 'Mr. Blank, if there is anything that is difficult, you might as well say so. Any cooperation requires a process of discussion, doesn't it?'
Arthur Blank nodded slightly and said, 'Mr. Xia, you are right, but there is another founder of the company, and he is not available at the moment. I need to discuss it with him before I can make a decision.'
'But before that, I want to ask you a question.'
Xia Yu leaned forward slightly and said, 'Please go ahead!'
Arthur Blank said, 'Your company invests in a company, what is the positioning of this company?'
Xia Yu had already seen Arthur Blank's attitude towards the company's control, so of course he would be careful with his words.
He said with a smile, 'Our company has always believed that the key to the value of a company lies in its people and management model. Our investment has always been towards people. As long as we recognise a person's abilities, then we will choose to invest regardless of the size of the company or whether it is in a downturn.'
'Therefore, Mr. Blank, you don't have to worry about us taking Home Depot away from you. I recognise the abilities of you and Mr. Bernie Marcus. If the two of you leave, then Home Depot will have no value in my eyes.'
'The current management and operating model of Home Depot was invented by you, and I don't think anyone in the world understands it better than you.'
Hearing this, Arthur Blank smiled and thanked Xia Yu, 'Thank you for your recognition!'
Finally, Xia Yu added sincerely, 'So, Mr. Blanc, even if we invest in Home Depot, we will not interfere with the company's operations. We will only send someone to supervise the finances. The rights to manage and operate the rest of the company will still be yours. All we need to do is give you our greatest support when Home Depot needs funds, so that you can expand without any worries!'
'We, Polaris Capital, are just a company that invests capital. We don't have the ability to manage all kinds of companies. If we have the time and energy, we might as well look for more investment opportunities!'
These two sentences, spoken by Xia Yu with sincerity, were met with Arthur Blank's calm gaze.
Arthur Blank looked at Xia Yu for a long time, then nodded slowly and said, 'Mr. Xia, I understand your attitude. I need to discuss with my partners before I can decide.'
At this point, Xia Yu knew that this was all there was to it for the day.
He stood up, and Arthur Blank followed suit.
Before leaving, Xia Yu said to Arthur Blank, 'Mr. Blank, although our company requires an investment of tens of millions of dollars, you don't need to worry about losing too much of your equity. Our investment approach is very flexible.'
'The advantages of Home Depot are obvious, but so are the disadvantages. If you are willing to accept our investment, we will first get rid of the other minority shareholders, buy their shares, and then inject capital into the company. After all, with sufficient capital, you don't need to be strangled by suppliers. The US dollar can buy anything, including the right partners!'
'If we can reach a cooperation, then on the basis of the investment, we can also provide Home Depot with a commercial loan, which can prevent you from losing too much equity.'
Arthur Blank raised an eyebrow, not expecting Xia Yu to say that, but after hearing it, his mind was activated.
The fact that Xia Yu could say that at least showed that he was not aggressive. Although he didn't know if it was true or not, his first impression of him was really good.
'Mr. Xia, I understand what you mean. I will discuss it with my partners first, and if we have a decision, we will contact you.'
Xia Yu shook his hand and said with a smile, 'No problem, but I hope I can get an answer as soon as possible. My schedule is quite tight, and I won't be staying in Atlanta for long.'
'This is my current address and contact information.'
After leaving Arthur Blank a contact, he took Arthur Blank's business card and was shown out the door.
After the car started, he looked at the big sign of the Home Depot again, and a flash of thought appeared in his eyes.
'It seems that we need to acquire a bank in the United States as soon as possible. After all, not all company founders don't care about control. Even if we can't get too much equity for the time being, we still need to use the cooperation of the bank to tie it down. There will be plenty of opportunities in the future!'
'And it's not good to have all the equity concentrated in Polaris Capital. If a bank comes forward to hold some of it, it will not only reduce public attention, but also reduce the vigilance of the founders of the invested companies!'
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