She’d wrapped them in kitchen paper and foil before leaving home, and they were still warm. Perfect. George would have enjoyed them.
In the bay next to the Gissings’ lorry, a larger truck drew up emblazoned with the Asperton logo. It reminded Val of the paintshop fiasco and her absent boss, and she sighed.
Darren and Dave collected in front of her. Could they have a bit of her bacon sandwich? It smelled so good and they’d forgotten to get anything for breakfast. Children, honestly, they were children. She gave them one of her two sandwiches to divide between them. They weren’t having any of her tea, though. They stood munching, then, all of a sudden Darren leaped up.
‘Bloody thieves!’
He jabbed his sandwich at the Asperton lorry.
Val and Dave turned to look. Two men, in Asperton company overalls, were unloading furniture painted in brilliant primary colours, styled and finished almost identically to the Gissings Bright and Beautiful. The display screens advertising the range were visible too.
‘Welcome to the Asperton Brilliants!’ they boasted.
‘Functional and dazzling - and at prices you won’t believe.’
Darren and Dave started to sing a football chant usually reserved for referees awarding the other team a controversial penalty in the ninetieth minute.
‘Don’t worry about it,’ said Val. ‘We always expected this to happen.’
It was true. There is no copyright in design and somebody was bound to copy the Gissings Bright and Beautiful range before long. It was only a pity that it should be the Aspertons who’d done it. They wouldn’t just copy Gissings, they’d do it well.
The real shock was to come. When the show opened, Val sauntered over to the Asperton stand. She wanted a price list. Michael Asperton was on the stand, round and twinkly, with the inevitable cigar between his lips. He saw Val coming.
‘Valerie Bartlett, isn’t it? I remember you from the times I used to meet up with old Tom Gissing. Terrible shame about the old man, wasn’t it? We sent a big bouquet to his funeral, you know.’
Tom Gissing had never liked or trusted the Aspertons, but he’d never been able to say no. Val didn’t like them either.
‘What can I do for you, my dear? Do you like our Asperton Brilliants? We’re very pleased with them.’
He was chuckling and puffing and bouncing with delight.
‘So I see. I was looking for a price list.’
‘Prices, my dear? How very commercial! Old Tom Gissing would never have asked for prices before he’d looked at the product. Always liked to inspect the dove tails first. Still, you want a price list. Let me see if I remembered to bring any. Ha, ha. Yes, here we go. These are list prices only, of course. We’re always happy to talk about volume discounts. Let me know if you’re interested.’
Val took the list and walked off without a thank you or goodbye. The man was insufferable. Walking back to the Gissings stand, she opened the price list. If she hadn’t felt sure that Michael Asperton’s eyes were on her, she’d have stopped dead in her tracks. The prices weren’t just cheap. They were giveaway.
Back on the stand, they assessed the damage. The Asperton range included a copy of everything in Gissings’ own range. The prices were between twenty to fifty percent lower. Val also remembered Michael Asperton’s crack about the volume discounts. That was his way of telling Val that if they needed to slash their prices even further to win business, then away they’d slash.
There was a decent press of potential buyers round the Gissings stand. They always had a good reception now. Nobody thought the firm was on the brink and it was developing a reputation for quality, innovation and service. But despite the interest, Val wasn’t deceived. Polite words cost nothing, but orders wouldn’t come until the buyers had checked out everything, and once they got to the Asperton stand, they wouldn’t return to Gissings.
She was right. The morning grew quieter the longer it dragged on. It turned out that the Aspertons had slashed prices on a couple of other furniture ranges, close in style to Gissings’ other ranges. They had held prices steady on their other stuff, aimed at markets Gissings didn’t even compete in.
This was personal. This was war.
Over a dour lunch, Val, Darren and Dave discussed how to react. They were joined by Jeff Wilmot and Andrew Walters, whom Val had summoned from the factory. This was an emergency - or worse. It would have been an emergency if George had been there. As it was, he’d disappeared after Kiki had landed in Gissings’ yard two months ago, and nobody had heard from him since.
‘It’s war, innit?’ said Darren. ‘We need to match their prices and knock another ten percent off if we have to. This is our idea and we can’t just let ’em pinch it.’
Dave, predictably, agreed. Val was silent, but Wilmot and Walters formed a united front against price cuts.
‘We simply aren’t able to support any price reductions at present,’ said Wilmot, speaking for the pair of them. ‘Our costs have increased since - er - the paintshop contract was withdrawn -’
‘It was withdrawn cos you handed them our profit figures,’ said Darren.
‘Well, er, the point is that our costs are higher than they were. Our profit margins are now around six or seven percent. If we take even ten percent off our prices we’re into loss. If we take twenty to fifty percent off, we’ll make a huge loss on every item.’
‘Well, we’re not going to sell anything with the Aspertons pissing on us.’
Darren’s logic was hard to refute, but Wilmot persisted.
‘Look. The point is that the Aspertons can’t be making any money at these prices. They probably just want to ensure a good launch, before normalising their prices.’
‘That’s right,’ said Walters. ‘I’m absolutely certain we can produce more cheaply than they can. We’ve become very lean and mean these days. Any price that gives them a profit will give us a bigger one. I say we sit back and wait for them to come to their senses.’
Val shook her head.
‘You’re wrong. The Aspertons won’t stop until they’ve put us out of business. They’ve looked through the numbers which Jeff kindly left in their office and they’ve worked out that in a couple of years’ time, Gissings might be a real competitor. They’ve also worked out that, although we’ve recovered fast, we’re still close to death’s door. They plan to just nudge us through.
‘They copy our furniture, sell it at insane prices, and wait until we can’t pay the bank. The second we give up and declare bankruptcy, Michael Asperton picks up the phone to David Ballard and offers to buy Gissings. We’ll be bleeding so fast that Ballard will say yes. The price will be miserable, but he’ll have to take it, because the longer he leaves it the bigger his losses. And the moment that Gissings is handed over, the Aspertons put their prices up. Overnight, Gissings becomes profitable again. And what will it have cost the Aspertons? Not much. They just need to put up with selling some unprofitable furniture for a few months. They’ll recoup everything in no time.’
She was right, of course. There was no other explanation. Even Darren was silent. If George had been there, he might or might not have known what to do. But either way he’d have taken action, instead of letting the company drift rudderless towards annihilation. The outlook was bleak.
‘How long have we got?’
Val was speaking to Jeff Wilmot.
‘Until we need to declare insolvency? Er, well, I would need to develop some planning scenarios, and analyse the impact of alternative sales strategies - er, and obviously the important factor will be commercial judgement’ - Wilmot meant that somebody else would need to take the blame if he were wrong- ‘but I’d say we have about three months. Three months at the outside.’
5
Matthew crumpled his styrofoam cup and chucked it at a stained plastic dustbin. His shot struck the lip of the bin, the cup spun upwards, and a few drops of cold coffee splashed out on to his leg. His trousers were light tan and stained easily.
It was no
w just ten minutes before the plane was due to close its doors and there was no sign of Fiona Shepperton. Matthew needed to decide if he was going to go on to Vermont by himself or whether he should forget the whole thing and return to his apartment. Little as he fancied knocking around a luxury holiday cabin by himself, the thought of pacing his apartment was worse. He picked up his holdall and boarding pass. He’d go. Just then, the glass doors at the end of the lounge burst open. It was Fiona, arriving breathlessly. She was comfortably dressed in faded jeans and a flannel shirt, a picture of relaxed confidence, but her eyes were wide open and vulnerable. As she reached him, she coloured.
‘Made it. Sorry.’
‘Never mind. I’m pleased you came.’
He bent to kiss her, then, not quite sure how she would respond, pulled away to land a stupid sort of peck high up on her cheek. She was confused too, and gave him an embarrassed smile in return. What were they? Lovers? Colleagues? Friends? Conspirators? Matthew still didn’t know why she had saved him during the compliance investigation four weeks ago, and since then, they’d hardly exchanged a word.
Matthew had tried to speak with her at work, but she oscillated between cold professionalism and embarrassed but not unfriendly efforts to change the subject. Finally Matthew, remembering their Jamaican trip, took the plunge and booked a superb holiday home in Vermont for a long weekend, paying top dollar for the privilege. He sent a handwritten invitation to her home address, saying he was keen to get to know her away from the bank. He booked two tickets and waited. After a week, when he still hadn’t heard from her, he approached her at the bank and asked if she could come. She muttered that she’d like to but wasn’t sure. So he mailed her her plane ticket and went to the airport not knowing if he was alone or in company.
The plane was delayed, but only after everyone had boarded, so there was an extra hour to endure the cramped seats. Matthew flicked through the in-flight magazine and Fiona dug through a pile of company research reports. A stewardess brought round coffee as feeble apology for the delay and managed to spill some on Matthew’s other trouser leg.
At last, the plane was ready and taxied out for take-off. Matthew threw his magazine on the floor and leaned across to his companion. He took all the company reports off her lap and out of her hands, and shoved them into the seat pocket in front of him.
‘No more business of any sort until we touch down again on Monday evening,’ he said.
Her face revealed a short struggle. Then she nodded submissively.
‘OK.’
‘And if you get withdrawal symptoms, you can ask special permission to spend an hour on bond analysis.’
She smiled and nodded.
‘OK. Thanks.’
The further the plane took them from Manhattan, the more relaxed she became. By the time they landed, Fiona Shepperton, the hard-as-nails Managing Director of Madison, had been carried off and replaced by Fiona the human being.
They picked up a hire car at the airport and drove for ninety minutes into the wooded hills. They collected the keys from a nice old couple, who called them Mr and Mrs Gradley and insisted on their taking a basket of food ‘to get them started’. Their home for the weekend was a traditional but luxurious log cabin, heated by an enormous log-burning stove and discreetly equipped with every modem convenience. Beyond the sundeck at the back of the house, a lawn stretched down to a private two-acre lake complete with rowing boat and jetty. The surrounding forest still sparkled with red and gold, but winter had long since begun to poke dead fingers through the golden canopy.
‘Like it?’ asked Matthew.
‘It’s fabulous. I love New England. I always tell myself I’ll retire to a place like this in time.’
‘You’d miss the city and be back the day after the first snow.’
‘You couldn’t be more wrong. I wouldn’t relax until I’d been snowed in a couple of times.’
Going upstairs, they found that only one of the two bedrooms had been prepared for use. After all, why would a Mr and Mrs Gradley want anything more? Fiona unpacked her things while Matthew just dropped his bag in the hall outside. Later, as Matthew loaded the stove with logs, Fiona heated up stew in the kitchen. She brought it out with a hunk of warm bread and they sat on the rug in front of the stove and ate by the light of its flames. They drank some Yorkshire beer which Matthew had bought from a speciality liquor store in Manhattan.
Once the stew and the beer and the crackling flames had done their work, Matthew could wait no longer.
‘Why did you lie for me in that compliance investigation?’ he asked. ‘I thought I’d had it.’ Fiona gazed into the firelight.
‘I don’t know for certain. I enjoyed our time together in Jamaica and I thought you deserved a second chance. Anyone can screw up once. But next time you see a presentation sliding around on an airplane floor, you leave it right where it is.’
‘You saw the presentation? I thought you were asleep.’
‘I saw it before I fell asleep. Some Wall Streeters trying to get Cornish to step into the bullring again, right?’
‘That’s right. It still seems like a great idea to me, but I’m hurting badly. I’m more than a million bucks underwater. Right now, I’d settle for getting out in one piece.’
‘Mmm.’ Fiona frowned, thinking over the problem.
‘Supposing you had no position in these bonds, and taking into account everything you know, what would be your best guess about how the bonds will trade?’
It was Matthew’s turn to think. He turned everything over in his mind.
‘Well, I guess the price could well fall further. The company’s debts are getting on top of it, and there’s still no sign of decisive management action ... Yes. Unless Cornish makes his move, the price will go on heading south. But on the other hand, if Cornish goes ahead with the raid, I’ll make a fortune.’
‘How many presentations like the one you found would you guess Nick Cornish receives each year?’
Matthew was taken aback.
‘I don’t know. Maybe two or three. There was a hell of a lot of work behind this one. It wasn’t a shot in the dark.’
Fiona shook her head.
‘The reason why our friends in corporate finance have such a shit life is that every presentation to major clients has to have that much work in it. If it doesn’t, the client throws it back at the bankers and never invites them back. That’s why they all work twenty-three hours a day.’
‘Well, this one had everything. Comparable company analysis, discounted cash flows, break-up valuations, funding scenarios. This was the full Monty.’
‘Matthew, Cornish’s worth two or three billion dollars. Would you go to see a guy like that if you hadn’t done your homework? Especially when he’s got a team of his own working on exactly the same kind of stuff.’
‘I guess not,’ said Matthew doubtfully. ‘But if this was just a try-on, it was a hell of a good pitch. He can’t see all that many ideas like that in a year.’
Fiona shook her head again.
‘Every bank on Wall Street has teams devoted to churning out stuff like that. I once knew a chief financial officer of a company where there had been speculation about a merger with one of their competitors. He told me that they had received fifteen presentations from fifteen banks in the same year, all making the same recommendation.’
‘Did they take it?’
‘No way. The two Chief Executives hated each other. They wouldn’t share the same room, let alone merge their businesses.’
Matthew thought for a long while. The fire burned low and he tossed some logs on to brighten it.
‘You’re saying I should quit?’
‘I’m not saying anything. I’m giving you some information. You do with it whatever you want.’
‘Well bang goes my bonus,’ said Matthew. ‘And bang goes my job, in all likelihood.’
Just then one of the logs popped, and a shower of sparks leaped from the fire. A few of them fell beyond the hearth on to t
he wooden floor. Another dropped, still glowing, on to Fiona’s thigh. Quicker than her, Matthew reached his hand out and swept it away on to the stone hearth. It was strange touching her. She was beautiful but unapproachable, a beautiful statue with stand-back eyes. Matthew still didn’t know what to feel about her, and, as far as he could tell, she was confused in exactly the same way. She thanked him and they brushed the remaining embers from the floor.
‘Don’t get too worked up about a single bad trade,’ she advised him. ‘How have you done aside from your Western Instruments play?’
‘I’ve done well. I’m up nearly eight hundred grand, which is good given that I’m still not allowed to play with much of the bank’s money.’
‘Yes. That does sound good. Well, you have to hope that the bank is smart enough to recognise that there’s a good trader in you, albeit one who made one king-sized screw-up this year.’
‘And do you think the bank will be smart enough?’
She shrugged.
‘I don’t know. But I’m chairing the PRC for junior traders this year.’
The Performance Review Committee had the annual task of assessing performances and handing out bonuses. Matthew smiled.
‘Thanks a lot.’
‘Don’t thank me. I’ll give my honest opinion. I’m never going to lie for you again.’
‘Fair enough.’ Matthew paused. Then he asked a question he had been burning to ask someone for a very long time. Now seemed like the right moment. ‘Fiona, what is the very most I’m likely to earn at Madison over the next two years? Assume I’m the best trader they’ve ever had and I get all the recognition I deserve.’ Fiona laughed at him.
‘You’re not the best trader we’ve ever had. And you’ve made a pretty poor start.’
‘Yes. But suppose I get everything right from now on. How much?’
‘Well, you’ve heard of the rule of Wall Street, haven’t you?’
Matthew hadn’t.
‘Well, the rule of thumb is a hundred thousand bucks for every year out of business school. You haven’t been to business school, but you started straight in on the trading floor which is what counts. So, according to the rule, you’ll get a hundred this year, two hundred the next, and three hundred the year after. Having said that, you’re a trader, not a corporate finance guy, and you can earn more faster. Also, you’re at Madison, which is one of the strongest banks on Wall Street, so that also translates into more money. So let’s say we double the rule of thumb in your case, you’d get two hundred thousand bucks this year, four the next, six the year after. And if you really do tum out to be the best thing ever to hit the trading floor, then maybe treble the rule. Three, six, nine.’
The Money Makers Page 28
