Hong Kong 1980: The Savage Era

Chapter 291 292 [Wing On Group]

In fact, the Zhao Congyan family has been making small moves behind the scenes. The most disgusting one was that Zhao Shizeng joined forces with several directors and shareholders to refute the four suggestions personally put forward by Luo Qihong, leaving no face for Luo Qihong at all.

Because of this, Luo Qihong was no longer willing to attend the board meetings of Huaguang Real Estate Company, but he was not fully prepared to take over Huaguang Real Estate Company, and he also wanted the Zhao Congyan family to continue making mistakes in order to reduce the bad reputation.

Now he has to deal with Wheelock and the newly acquired Chi Chang Life, Fire and Marine Insurance Company, so he has no time to take care of the affairs of Wah Kuang Real Estate Company.

"Yes! I will tell Zhao Shizeng." Chen Zhilong has never been a very generous person. With Luo Qihong's full authorization, he can certainly vent his anger.

Luo Qihong took a few deep breaths and adjusted his emotions. He could invest according to his memories of his previous life, but he couldn't master the social skills and emotional control to the level of Li Jiacheng and Cheng Yutong in just four years. Ultimately, he still needed to practice hard.

"Okay, it will do us no good to fall out with Zhao Congyan and the others. Don't be too firm in your words and leave some room for them." Luo Qihong regained his former wisdom.

Chen Zhilong was a little surprised that his boss adjusted his mood so quickly.

"How much debt does Huaguang Shipping Company have?" Luo Qihong asked.

"It's close to 60 billion Hong Kong dollars, and the monthly interest is as high as 5 million Hong Kong dollars." Chen Zhilong said with some disdain.

Luo Qihong couldn't help but exclaimed, "Wow! It's several times the market value of Huaguang Real Estate Company."

"Then get ready, it won't be long before we take over Huaguang Real Estate Company." Luo Qihong smiled.

Even Hutchison Whampoa could not bear this amount of debt for long and was on the verge of bankruptcy in just a few months.

Before Luo Qihong could do anything to Zhao Congyan's family, newspapers disclosed the problems of Wah Kuang Shipping Company, making a "very good" comparison between it and the previous Wheelock Company, pointing out that if Wah Kuang Shipping Company did not reduce its ships and resolve its debts, it would soon go bankrupt.

However, Wah Kuang Shipping Company is a non-listed company. Unlike Wheelock Holdings, the Zhao Congyan family has absolute control over Wah Kuang Shipping Company.

Faced with the overwhelming public opinion, Huaguang Shipping Company only sent a senior executive to deal with the reporters, saying that "everything was within the company's expectations and the situation was under the company's control."

The reporter naturally expressed disbelief and asked Huaguang Shipping Company to produce evidence, but the senior management refused.

Lane Crawford Development Company Meeting Room
Luo Qihong has controlled the development of Lane Crawford through Hexiang Trading Company, and at the same time took control of the board of directors, successfully serving as the company's chairman and general manager.

Since Lane Crawford Development Company has always been in the hands of John Madden, the proportion of Chinese in the company's senior management is very low, and foreigners account for more than 7%.

However, the senior executives of Lane Crawford Development Company were very smart. They must have inquired about Luo Qihong's reputation and understood that "the world has changed" and that resisting Luo Qihong would be a dead end, so they chose to surrender or remain neutral.

"I've learned about the company's situation. It's doing very well." Luo Qihong crossed his fingers and placed them on the table. "In 68, the company acquired the China Department Store, but did not choose to absorb the business of that company. Instead, it continued to focus on high-end department stores. Today, it is very successful."

"But I plan to re-enter Hong Kong's low-end and mid-range department stores, and expand the scope of high-end department stores to enter the high-end department store market in East Asia, Southeast Asia and Australia. What do you think?"

"Mr. Luo, I agree with the decision to expand into the high-end department store market, but shouldn't we be more cautious about the decision to enter the mid- and low-end department store market?" Deputy General Manager Du Fulie said in an unusually serious tone.

"Yes, Luo Sheng. If Lane Crawford loses its original characteristics, it will be more trouble than it gains." A foreign executive quickly supported Dufresne, "We have always been doing business with high-income people. If these people think that our products lower their status, the turnover is likely to plummet."

The department stores developed by Lane Crawford all sell European and American brand-name goods. Their target customers are naturally the wealthy class, and even the white-collar high-income class is not included.

"Japan's department store industry is very developed. Since the 70s, the department store industry has been in a state of export. I am afraid it will be difficult for us to open up the market in Japan, and those arrogant Koreans also don't like foreign products."

"The northern interior is very poor, and there won't be much of a market for luxury goods."

The final result of the discussion was that Lane Crawford would no longer operate mid- to low-end department stores, but only high-end department stores, and would not enter the East Asian market. The direction of expansion would be Southeast Asia, Australia and nearby Macau.

Luo Qihong had already anticipated and accepted this result, but the persons in charge of the three directions would be decided by Luo Qihong alone, and he rejected all recommendations from senior executives and self-recommendations.

Lane Crawford Development's business is already very mature and does not require too much management from Luo Qihong. According to his plan, in the future, Lane Crawford Development Company will be privatized and become one of the family's brand symbols.

Hexiang Trading Company Meeting Room

Since Lane Crawford cannot develop into a mid- to low-end department store, it can only let Hexiang Trading Company take over, which is also quite beneficial.

“Boss, there are quite a few mid-range department stores in Hong Kong. The most representative ones are Wing On Department Store and Sincere Department Store. In the 60s and 70s, there were four major Chinese department stores in Hong Kong. The China Department Store was acquired by Lane Crawford Development, and the Dah Sing Department Store became a second- or third-rate department store.” Wu Rongtin explained the history of department stores in detail.

"Today's supermarkets are also impacting the business of department stores, and there are also a large number of Japanese department stores competing." Wen Jiatao said, "We are also a fledgling 'student', I'm afraid it will be difficult for us to win."

"Can you use the convenience of our trading company to help the department store get cheaper and better quality goods?" Luo Qihong asked in a deep voice.

"We can, but we can earn the same amount of profit through trade, without opening a department store to make money, and it will be a lot more work," Wu Rongtian said defensively. "If the company starts a department store business, who do you recommend?" Luo Qihong asked.

The money you earn now may be the same, but it may not be the same in the future.

Judging from the price wars among ParknShop supermarkets under Hutchison Whampoa and Wellcome supermarkets under Hong Kong Land, profits in the department store market are not that simple.

Luo Qihong also plans to open department store and supermarket chains throughout the mainland. The franchise fees can make the company a lot of money, and the price difference in the supply of goods is even more of a living source.

Therefore, it is impossible for him to give up this business and he wants to make it bigger and stronger.

With subsidies from the trade business, he doesn't have to put any money into it himself, so it's a very good investment.

Seeing that the boss had made up his mind, these senior employees could no longer object and began to recommend their subordinates.

As for themselves, the trading business makes much more money than the department stores, and they all have their own "three acres of land", so how can they be willing to give up the watermelon to pick sesame seeds?

But you still have to strive for it. If your subordinates get promoted, you can use your face to do some things in the future.

"Okay, submit all their information and I will screen them one by one." Luo Qihong said.

"Does anyone of you have the latest information about Wing On Group?" Luo Qihong suddenly asked with a smile.

They all looked at Luo Qihong in surprise. Why did he suddenly ask about Wing On Group? Did he want to draw on the situation of Wing On Group's department store business for analysis?
Wu Rongtian immediately responded, "Boss, I know a little bit, but it may not be comprehensive."

"Tell me about it!" Luo Qihong of course learned the details afterwards.

"The business areas of Wing On Group include life, fire and marine insurance, securities investment, financial futures, banks and department stores under Wing On. Among these businesses, only the department store business is profitable, while the other businesses are in the red, and the bank is the one that suffers the most losses."

"In 82, the real estate and stock markets plummeted, and a large number of loans of Wing On Bank could not be recovered at all, resulting in a lot of bad debts. If it weren't for the Guo family's wealth and the sale of some assets to fill the gap of Wing On Bank, Wing On Bank would probably have been taken over by the Hong Kong government."

"Wing On's situation is not very good either. Although it is profitable, it is much lower than in previous years, about 6%, and its position in the department store industry is also declining rapidly."

Wu Rongtin shared everything he knew and understood.

"Boss, are you planning to take over Wing On Department Store?" Wen Jiatao asked tentatively. That was not a good industry.

Luo Qihong smiled and shook his head. "What are you going to do with a declining industry? Will you lose money?"

"Wing On Department Store can still be acquired. At least there is a shelf there," said Yan Guantong.

Luo Qihong said, "We do need shelves, but the shelves in Wing On Department Store are too big, so it is better for us to start with the smallest one."

Luo Qihong was of course afraid of losing money, he just needed experience in running a department store.

Wen Jiatao and Wu Rongtin breathed a sigh of relief. If the boss had insisted on acquiring Wing On Department Store, he would definitely have failed.

"However, Wing On Group's properties in Central and Tsim Sha Tsui are very good, especially Central," Luo Qihong added.

The staff were speechless, their knowledge of the property was very limited and they could not offer any advice.

"You don't have to do anything else. Just prepare high-quality and low-priced goods for the department store."

"How many shopping malls does the boss plan to open in the first phase?" Wen Jiatao asked.

“Let’s open two stores first, one in Tsim Sha Tsui East and one in Kowloon City. Our target customers are middle-income families,” said Luo Qihong.

Wu Rongtin said, "I suggest opening one more store in Causeway Bay, which has gradually become a shopping destination for young people. It should bring in good customer traffic and sales."

"Yes!" Luo Qihong nodded, "Okay, then three shopping malls, the new company will be called Rocks Department Store."

"Yes!" Everyone agreed.

According to the memory of the previous life, the Wing On Group did not have many years of good days left, and its original sin was that it owned a large number of properties in Central.

(End of this chapter)