In China in the 1990s, retail was a restricted investment industry.
Foreign capital is not allowed to enter independently, including Wal-Mart and Carrefour, which have chosen to establish joint ventures with state-owned assets.
Mainly to solve two problems: government relations and the convenience of obtaining land.
One of this model is to reduce the investment costs of Carrefour Group.
Another one has the power of these local snakes, Carrefour has obtained very good positions.
Chen Dongcheng tapped his fingers on the table rhythmically, thinking in his mind.
What should we do to best solve the problems in these stores?
There are more than 20 stores with annual sales approaching 200 million, and part of the equity is in the hands of some small shareholders.
Over the years, these small shareholders have made a lot of money, but they are still not satisfied.
Faced with the acquisition offer made by Carrefour China, the lion opened his mouth and shouted a high price that made Chen Wenyuan frown.
If it weren't for this, given the number of Carrefour stores, they wouldn't be the only ones interested?
The complex store ownership structure, completely useless supply chain system, and inefficient operating model are all factors that hinder other capital acquisitions.
“Which companies currently have a bigger appetite?”
“The leader is Chengda, a company in Liaoning Province, and they have cooperated with us in six stores.
Among them, only Carrefour in Bingcheng made a profit of nearly 10 million yuan, and Carrefour in Fengtian suffered the most serious losses, about more than 60 million yuan.
Six stores lost more than 100 million in the first half of last year."
Chen Wenyuan also showed the investment data of Chengdu University in Liaoning Province: "They invested a total of 226 million yuan at the beginning. Over the years, they have received 238 million yuan from dividends alone, which has already paid back."
"Fortunately, they only hold 35% of the shares in Fengtian and Bincheng Carrefour stores. Others such as Bingcheng, Hangzhou, Ningbo, and Changchun Carrefour do not hold more than 25% of the shares."
This shareholding ratio is very low. Carrefour China has the decision-making power over store operations, and they are only a financial investor.
"They already sold it once last year. At that time, they asked for 420 million, but now they are asking for 600 million. I would like to ask for your opinion first."
Carrefour China's only advantage was that it added a preferential acquisition clause.
If Liao Chengda wants to sell it, it must first ask Carrefour if Huaxia wants to buy it.
Chen Dongcheng frowned and shook his head: "600 million is too high. My bottom line is 500 million. If it doesn't work, we will choose another location."
This is because Director Chen has given the other party some favors because of the 16 years of cooperation between the two parties.
"Then I'll contact them and I'll be tougher."
Chen Wenyuan's ability can be seen from his ability to win over a group of people and clean up a group of people.
Either agree to the acquisition or continue to suffer losses.
Not surprisingly, Liaoning Province Chengda chose to give up when the situation was good, and agreed to sell all the equity in six stores to Carrefour Huaxia, so it was safe to settle.
"Director Chen, according to your instructions, Liao Provincial Chengdu Conference will completely give up its equity. I will start to buy back other stores one after another."
Chen Wenyuan glanced at Chen Dongcheng cautiously and said tentatively: "Director Chen, if possible, I hope you can provide a sum of funds for the group."
"The funds have already been prepared. The initial payment of US$500 million is enough for you to complete the renovation of the first few stores, right?"
"It's enough. We can also buy back the equity of more than 20 stores one after another." Chen Wenyuan replied with some surprise.
According to the purchase price, Chen Dongcheng’s capital injection this time reached half, which was far beyond Chen Wenyuan’s expectations.
"As for Carrefour, you can notify us and we will either inject capital or dilute the shares."
Chen Dongcheng estimates that Carrefour will not choose to follow up. They are completely afraid of the Chinese market.
"In addition to repurchasing the equity of more than 20 stores, I plan to lead a team to visit, close the unprofitable stores one after another, and select new locations to open stores."
Chen Wenyuan has just taken office and must make some achievements.
In the field of supermarkets, the best result is sales.
There is a saying in the field of supermarkets: To build a store, the first is location selection, the second is location selection, and the third is location selection.
This shows how important location selection is to a store’s sales.
"For those stores whose leases have expired, you will hold a meeting and analyze them before deciding whether to renew the lease or open a new store, and follow your own ideas."
Chen Dongcheng knows how to delegate power very well, which is one of the reasons why so many talents are willing to work under him.
What professional managers like them hate most is layman bosses who don’t understand and pretend to understand.
Chen Wenyuan said with a serious face: "Director Chen, I would like to tell you my opinion on Carrefour's future development ideas."
"You tell me."
"I think the fight in the first- and second-tier markets is fierce now. Our brand influence is already declining. If we continue to compete with several competitors in the first- and second-tier markets, our losses will become more and more serious."
Chen Wenyuan wrote the words 'third tier' and 'fourth tier' on a piece of white paper, and said with a smile: "We might as well compete with RT-Mart in the third and fourth tier markets. I have done analysis, and in the future the sinking market will be the retail industry.
of the finals.”
"The population in the first and second tiers is just over 400 million, while the population in the third and fourth tiers and the vast sinking markets exceeds 900 million. This is our opportunity to overtake in a corner."
The performance of these Carrefour stores in first- and second-tier cities is not good.
Not only are rents getting higher and higher, brand influence is declining year by year.
In the short term, you may not be able to see much improvement.
Chen Dongcheng nodded and put forward his own opinion: "I agree with your idea, but the first and second tier cities cannot be completely lost."
"You pick some properties with good sales and good locations, renovate these stores and upgrade them to a higher level."
Chen Dongcheng said with a smile: "These stores don't have to make money, but they must make consumers satisfied with the quality and service.
Retain our influence in first- and second-tier cities.
When the time is right, we might as well return to first- and second-tier cities."
Carrefour's stores are now concentrated in first- and second-tier cities, many stores are struggling, and customer traffic has declined very seriously.
It is time to take advantage of this wave of rent expiration to kill a number of stores with poor performance, streamline talents, and adopt a refined operation strategy.
Costs in third- and fourth-tier cities are lower, both in terms of employees and rent.
They may even invest in land.
Although Carrefour has been a bit miserable in recent years, it is still somewhat well-known in third- and fourth-tier cities.
"I plan to control the current number of stores to around 150 to ensure our competitiveness in some cities and use more funds for third- and fourth-tier cities."
"If the conditions are favorable enough, we can acquire land, build our own shopping malls, and increase the number of properties we own."
Chen Wenyuan is still somewhat ambitious. He is very clear about the importance of his own properties to Carrefour China.
Yonghui has always been questioned by the outside world, and there are big problems with their model.
All properties are leased, and the proportion of owned properties is only about 3%.
The more properties you own, the stronger your ability to withstand stress.
Land prices in third- and fourth-tier cities are cheap, and if good policies are met, there will be no need to change locations in the next 20 to 30 years.
According to Carrefour's model, the area of land acquired in third- and fourth-tier cities will definitely be very large, and part of the commercial area can be subleased, so the rent will not be reduced.
After finalizing the future development ideas of Carrefour Huaxia, Chen Dongcheng looked at the time, it was already noon, and said with a smile: "The time is just right, I will take you to have a meal."
Chen Wenyuan thought Chen Dongcheng was going to take him out to eat. Unexpectedly, Chen Dongcheng took him directly to the 6th floor in the elevator.
"Director Chen, shall we have lunch at the restaurant?"
"Well, the restaurant is still a bit small. We are currently discussing a project, which is probably coming to an end."
Chen Dongcheng patted Chen Wenyuan and walked out of the elevator first.
The 6th and 7th floors of Century Tower were opened and transformed into restaurants.
For the first time, Chen Wenyuan realized how extravagant his boss was.
Two floors of office space were taken out and transformed into a restaurant. The employees of Cao Cao Group have gone crazy with happiness.
The restaurant is equipped with chefs from eight major cuisines, and provides late night snacks to employees who work overtime in the evening. The welfare index is five stars.
The two took their dinner plates, found their favorite cuisine stall, ordered a few dishes, and found an empty seat to sit down.
The restaurant is decorated with some green plants. When dining, looking at the green plants can relieve visual fatigue a lot.
Chen Wenyuan was eating his meal with some emotion: "When I came to Century Tower, I discovered that the Cao Cao Group has become so powerful that even Wal-Mart's China headquarters cannot reach this level."
"I have always believed that a brave man must be rewarded with a big reward. If I don't give my employees enough to eat, how can they have the strength to make money for me?" Chen Dongcheng joked.
Chen Wenyuan shook his head and said, half jokingly and half sincerely: "It is our honor to have a capitalist like you."
Chen Dongcheng is willing to make more than 10 million less every year, and specially designed a restaurant to provide benefits to employees.
I don’t know how many times Mr. Chen has been praised by the employees of Countless Century Building.
Chen Dongcheng smiled and talked about the arrangements for the afternoon.
"You will have a meeting with me later. You will meet Lu Guangyu, Zhou Shaohua, and Zhu Zijing. There will be more places for your companies to cooperate in the future."
Chen Wenyuan's eyes lit up and he nodded quickly: "Okay, I will definitely communicate with a few colleagues and learn more experience."
Now that Chen Dongcheng's business is getting bigger, there are more and more places where companies can collaborate.
For example, Zhou Shaohua, who is engaged in logistics, can help Carrefour solve logistics, warehousing and distribution problems.
Lu Guangyu, who engages in intra-city delivery and has millions of crowdsourcing riders, can help Carrefour solve the last mile problem of delivering products to consumers within an hour.
Zhu Zijing, who is engaged in mobile payment, is even able to cooperate with Carrefour to transform it into a digital store.
Add more automatic checkout areas, help analyze consumer data, reduce commission payments, etc.
Unknowingly, Chen Dongcheng already possessed such huge power.
Now that these forces are integrated, it is enough to make many competitors tremble.
Carrefour, which was originally weak in the supermarket field, now has the support of these brother companies and is instantly qualified to compete with RT-Mart and Yonghui.
Not to mention that behind Carrefour is Chen Dongcheng, the financial backer and dad, so milk is not always available as much as you want.
Backed by the happiness of his benefactor father, Chen Wenyuan can laugh out of his dreams just by thinking about it.