by Ian Hamilton
Ava had been making notes in her Moleskine during the presentation. She did have a number of questions, but she suspected Roland was going to answer some of them and decided not to pre-empt him. “I think we can continue,” she said. The others nodded.
Roland’s presentation was dominated by charts as he outlined VLG’s corporate structure. Ava paid particular attention to where the acquisitions fitted in and how many layers of management were between the acquired brands and the two VLG offices in Milan, especially the group that worked on Via Borgospesso. It was, to her mind, a surprisingly lean company. How the structure manifested itself in terms of control wasn’t explained and wasn’t obvious, but Ava did note that there were designated global corporate offices for finance, sales, marketing, planning, creative development, purchasing, and manufacturing. She had no idea how large these subsidiary organizations were, and the charts gave no indication.
With hardly a pause, Roland said, “Now, as to our financials . . .” and unleashed another flurry of charts that showed thirty years of uninterrupted sales and profit growth. Ava had seen most of the numbers in the VLG annual reports online, but as she checked her notes she saw that Fuda’s profit margins and net profits were higher than those that had been made public.
“Now, like Gabriella, I’ll be pleased to answer any questions you may have,” Roland said.
“Why are the profit margins and the net profits different from the numbers I saw in your annual reports?” Ava asked.
Roland turned to Pandolfo and Pandolfo leaned in towards Ava. “We have exceeded our profit estimates every year for the past twelve, but as a public company we are continually being scrutinized and judged against the estimates that various industry analysts post. We decided to build a ‘contingency fund.’ That is a deliberately vague term for a large amount of cash we keep on hand to use for acquisitions and to pump up our profit numbers if the need should arise. So far, thank God, the fund has been used only to make acquisitions.”
“That seems to be a rather complicated way of doing things.”
“My understanding is that you are an accountant.”
“I am.”
“Well, you’re correct that from an accounting standpoint we could make things simpler, but we’re in the marketing business, and we’ve taken that marketing mentality and extended it to the marketing of our financials. Unlike most companies, we understate rather than overstate our real position. It gives us flexibility, and we’re in a business that requires that.”
“I was curious, not being critical,” Ava said.
“Critical about what?” a voice said from the doorway.
Everyone at the table turned.
“Dominic, your timing is impeccable,” Pandolfo said.
( 8 )
During the course of her life and career, Ava had met only a few people whose sheer physical presence could dominate a room. There had been Captain Robbins, an enormous man who was the head of security services in Guyana. Her father, Marcus, looked like someone important; she had seen him quietly command attention by simply walking into a room. Xu had an aura, a bearing, that was similar to Marcus’s, but he also gave off the impression that he was a man not to be refused anything. To that short list she now added Dominic Ventola.
He walked into the boardroom with a slight smile on his face and a wave of his hand. “Sorry to be late,” he said. “I hope I didn’t miss anything important.”
“Roland and Gabriella have just finished their presentations,” Pandolfo said.
“And I’m sure they did their usual admirable job.”
Ventola was short, not much more than five foot six, but his physique was sturdy and muscular. He was clean-shaven, his skin a pale pink that highlighted the depth and richness of his dark blue eyes. He had a wide-set jaw and brow that were offset by a slender nose and thin lips. He wore a light blue shirt and crisp grey slacks with a crease as sharp as a razor’s edge. The shirt was tightly tucked in and the middle of his belt buckle was perfectly aligned with the shirt button above it. His nails were manicured. This might be the cleanest, neatest man I’ve ever seen, Ava thought.
Roland and Gabriella had stood when he entered the room. They moved, almost subconsciously, back from the table to give him space. Ava noticed that the four youngest members of the PÖ group had stood as well, their eyes locked on him. He walked directly up to Clark.
“How are you, Clark?” he said, his hand reaching out.
“I’m well, thank you.”
“And so you should be,” Ventola said, one hand shaking Clark’s, the other gripping his forearm. “You are an extremely talented young man with some great years ahead of you. Our hope is that you’ll permit us to take that ride with you.”
“Dom, we haven’t gotten to that part yet,” Pandolfo said.
“Then my timing really is impeccable.” Ventola grinned and walked to the head of the table. Roland pulled a chair back for him.
“I need some water,” Ventola said. The room went quiet while Roland filled a glass with sparkling water and brought it to him. He took a small sip, just wetting his lips.
“I have been a fan of yours for so long,” Clark said.
“You’re not going to make me feel old, are you?” Ventola said. “It’s bad enough that I find myself surrounded by so many young and beautiful people.”
“We’re all admirers,” Gillian said.
Ventola nodded as if he was acknowledging the obvious. “I’d rather talk about PÖ,” he said. “Your show in London was brilliant —wonderful designs married to spectacular theatre. How did you convince Pang Fai to do it?”
“I asked her to help and she agreed,” Ava said. “The actual runway performance was her idea.”
“She was paid well?”
“Of course.”
“Do you have her under contract?”
“No, we have a verbal agreement.”
“Really?” Ventola said, cocking his head slightly. “Will she work for you again?”
“Of course.”
“How do you know that? Her star is on the rise and so will be the demand and the cost.”
“PÖ is the only design house she will work for.”
“You seem so sure.”
“We have an understanding.”
Ventola sat back in his chair and folded his arms across his chest.
“Ava,” Pandolfo said, “I’m wondering if you could explain your partnership structure to us. You are obviously aware that we have an interest in the PÖ company. We’d like some idea of who owns what.”
“For the purpose of this discussion you can assume that we’re equal partners.”
“Our understanding is that Three Sisters owns forty-nine percent of PÖ,” he persisted. “Is that true?”
“I don’t know where you got that number,” Ava said.
“So it isn’t true?”
Ava shrugged. A moment passed. She felt the discomfort in the room rising.
“Ms. Lee, over the years we have invested in many young designers and most often have been successful,” Ventola said. “We have money, of course, but more importantly we have design, manufacturing, marketing, and merchandising support mechanisms. We understand the business and know how to nurture and grow young talent. We believe that Clark would benefit from an affiliation with us.”
“Your success has been remarkable. We don’t doubt that you could help PÖ grow, and we’re prepared to discuss how that might happen,” Ava said. “But you’ll need to explain what you mean by ‘affiliation’.”
“We’d buy into PÖ,” Pandolfo said.
“To what level?”
“It’s our company policy not to take minority positions when we invest,” Pandolfo said. “If we’re going to commit to a designer and put the full force of our organization behind him, then we want a majority, a controlling interest.”
“Fifty-one percent?” Ava asked.
“At a minimum, but it is normally more. We do pay fair market value, and often a
bit extra,” Pandolfo said.
“I don’t doubt that. But while I expect we could assign a value to the company as it currently exists, I think it would be far more difficult to assess its potential value. These are early days for PÖ. Who knows what we’re capable of accomplishing?”
“Our financial and marketing people have considerable expertise in making that kind of projection —we have done it often enough. If we agree there is a potential for a deal, then I’ll ask them to run numbers for PÖ. You obviously don’t have to make a commitment until you see what we’re prepared to pay,” he said. “And you won’t find many people who regret partnering with us. They may own a smaller share of their business than they once did, but that share is worth far more than the value of their business would have been if they’d tried to go it alone.”
“I’m sure all that is true, but we’re not ready to concede control of our company. Are you firm on your policy of wanting a majority interest?”
“We are.”
“And we’re not willing to be in a minority position, so we appear to be at an impasse.”
“Do all of you feel this way?” Pandolfo asked, his attention blatantly focused on Clark.
Ava saw Clark glance at Gillian. She pursed her lips, and for a second Ava thought she was wavering.
“Ava speaks for Three Sisters, and we are in complete agreement,” May said.
“That is also the view that Clark and I share,” Gillian finally said.
Pandolfo turned towards Ventola with a resigned look on his face.
“Let me switch topics for just a moment,” Ventola said. “Clark, I’m interested in how you construct your clothes. I know you’re using high-thread-count linens, but I’ve never before seen linen flow so beautifully. What are you doing to achieve that effect?”
Clark hesitated and then smiled self-consciously. “It’s amazing that you ask about the draping, because when I start to create a piece, that’s exactly what I’m thinking of. And I find that when I can see it in my mind’s eye, everything else —the cuts and angles and seams —takes on a life of its own.”
“I told Raffi that I saw a hint of genius in your work,” Ventola said, and then turned to Ava and May Ling. “You can’t teach what Clark has. There are designers who learn the tools of the trade and then go about constructing clothes by rote, like bricklayers. Then there are the few who see things that no one else can. I was a bricklayer —a good one, but a bricklayer all the same. What separated me from the rest of them was that I knew what I was and accepted it. It was that acceptance, I think, that allowed me to see the greatness in others. And there is greatness in Clark.”
“We think that as well, and that’s why we decided to support Clark and are committed to keep on doing that,” Ava said.
“Even though you’re not as well equipped as we are to ensure success?”
“That’s an unfair remark, Mr. Ventola,” Ava said.
“Perhaps it was, and if so I apologize,” he said. He turned to Clark. “When I saw your linen creations, I couldn’t help but think about sea silk. Have you ever seen sea silk?”
“No,” Clark said.
“You know of it?”
“Only in a general way.”
“It’s the rarest, finest, and most valuable silk in the world,” Ventola said. “It’s made from byssus, the long silk filaments that pen shells use to attach themselves to the ocean floor. Pen shells have been disappearing, and the silk with it. A few years ago I visited a woman in Sardinia who may be the last person alive to weave sea silk the way it was done to make robes for the kings of Mesopotamia. I spent an entire day with her and came away determined to save as much sea silk as I could. I have a studio in the basement of this house with perhaps the largest amount in any one place in the world. When I saw the way you made linen flow, I thought, What could he do with sea silk? Would you like to see it?”
“That would be incredible.”
“Then let’s take a break,” Ventola said. “Gabriella, why don’t you take Clark and his sister down to the studio? Tell Jacob that I said Clark is to have unfettered access to the sea silk.”
“Yes, sir,” she said and stood.
Clark and Gillian looked questioningly at Ava.
“Go ahead,” Ava said.
As they left, Ava saw Pandolfo glance at Ventola. “Could I have a glass of water now?” she asked.
“Anyone else?” Roland said.
“Sure, I’ll have some,” May said.
While Roland was pouring the water, Ventola leaned towards Pandolfo and whispered. Pandolfo whispered in return.
“So, my understanding is that the four of you are partners in or connected with Three Sisters,” Ventola said.
“We are,” Ava said.
“Then why don’t you ladies do me and Clark Po a favour and get the fuck out of his life.”
( 9 )
The boardroom was silent. The faces of the three men across from her were blank. May hadn’t reacted to Ventola’s outburst; Ava knew she’d seen and heard worse while doing business in Wuhan. Amanda and Chi-Tze were startled, and Chi-Tze seemed especially flustered.
“I think I’ve stated our position quite clearly,” Ava said calmly.
“I believe in being blunt,” Ventola said.
“Obviously.”
“There’s nothing you can really do for him.”
“We haven’t done so badly thus far.”
“You’re playing around the edges. You don’t have the muscle to get him into the centre of the action, and you don’t have the experience or contacts to maximize his brand.”
“All of that may be true —”
“So stop being so hard-headed and selfish. Let him go.”
“As I was saying, all of that may be true but we have a plan and we made a commitment. We also have some hard-working, smart young women in Gillian, Chi-Tze, and Amanda. They may not have the specific contacts and talents that you have in your organization, but as a team they’ll learn what they need to know soon enough.”
“You’re being naive.”
“I disagree. We know what our shortcomings are and we know they can be dealt with.”
Ventola shook his head in frustration. “You should know that we’re approaching you first as a courtesy, out of respect for the fact that you did finance PÖ to bring it this far. We could have gone directly to the Pos to cut a deal. Raffi tells me they have fifty-one percent of the business to your forty-nine.”
“That’s the second time those numbers have come up. How do you know what the split is?”
“People talk,” Pandolfo said.
“Did the same people tell you that the Pos can’t sell a single share without our specific approval?”
“Is that true?”
“And did they tell you that if Clark leaves the company he’s bound by a five-year non-compete agreement?”
Ventola glared at Pandolfo.
“And did they tell you that the PÖ brand name is owned by Three Sisters?”
“You thought of everything, didn’t you,” Ventola said.
“May Ling is one of the most successful businesswomen in China. Amanda and Chi-Tze each have an MBA from a leading American university and have run multimillion-dollar family businesses. And we weren’t reluctant to pay for very good legal advice. So we did think of a lot of things.”
“How much money are we talking about?” Pandolfo asked, reasserting himself.
“I beg your pardon?” Ava said.
“How much did you invest? Two million, three million?”
“The actual number is ten million.”
“That’s impressive. You went all in. Most of the young designers we encounter are underfunded.”
“The only way we know how to operate is to go all in. We put our money where our beliefs are, and we believe in Clark.”
“So how much will it take to get you to walk away?” Pandolfo said. “How much will it cost to acquire all the rights you’ve assembled and your share
s?”
“I’m not sure that’s open for discussion.”
“You’re businesspeople. You made an investment, you expect a return. What is it?”
“We’ve never talked about it.”
“No endgame?”
“No.”
“Well, you’ve got one staring you in the face. Don’t you think you owe it to yourselves to talk it over? Come back to us with a number.”
“And don’t concern yourselves about what will happen to Clark,” Ventola said. “Designers like him are our lifeblood, our most prized assets. We know how to look after them. We’ll make him rich and we’ll keep him happy.”
“Dom truly believes that Clark is special,” Pandolfo said.
Ventola nodded. “We’ve been waiting for years for a talent to break out of Asia. There have been a few other designers with some potential, but none of them had what I call ‘the gift’. Your boy has it, and with his personality, we can create a highly marketable package.”
Ava looked at May, Amanda, and Chi-Tze. May raised her eyebrows. Amanda seemed pensive. Chi-Tze still looked flustered.
“I hope you’ll understand that we didn’t anticipate you’d make an offer so quickly. When I first spoke with Raffi, he used words like cautious, and this hardly qualifies,” Ava said. “And Mr. Ventola, while your assessment of Clark’s talent and potential is highly complimentary, and one we share, I’m wondering how you can be so sure after seeing just that one show in London.”
“We’ve been watching you for months,” Ventola said.
“Pardon?”
“The show director you hired in Shanghai has worked for me in the past. He sent me a video from your launch there and told me he thought the boy was special. We’ve tracked your sales at Lane Crawford and elsewhere in Asia. I had my people talk to some of his teachers from Central St. Martin’s, and they raved about him. So I went to the London show to see for myself. I’m naturally a skeptic and I was prepared to be disappointed. Instead, everything we’d been told was confirmed. I was won over,” he said.
“Asia is also an increasingly important market for us in terms of sales and manufacturing. But we have no real footprint there, no presence. We think that Clark and PÖ could become the face of VLG in that part of the world,” Pandolfo added. “So you see, Ava, we have given this considerable thought and we’re not being precipitous. Now, would you like to come back to us with a number?”
