My Daily Basic Stipend Is 10 Million

Chapter 141: Chapter 141: Acquisition

"President Chen, I’d like to give you an update on the acquisition of the Sa Mo brand!"

Chen Xiao answered the call from Zhang Shijie and said, "President Zhang, there’s no need for formalities. Let’s discuss it."

A few days ago, Chen Xiao had asked him to look into acquiring the brand or securing a partnership for distribution. He hadn’t dared to slack off and had been personally following up on it for the past two days.

This was also an opportunity for the current Yino Group to break through its bottleneck.

Coincidentally, the Sa Mo brand was also facing a bottleneck of sluggish growth!

Sa Mo was positioned as a high-end fashion brand. Its average customer transaction value was nearly identical to that of affordable luxury brands, and it was typically located in the same section as them in major shopping malls.

But think about it: how many commercial plazas in each province even feature affordable luxury brands? One can imagine how this constrained Sa Mo’s distribution network.

With few retail outlets, the only way to increase their performance share was to boost the output of individual stores. However, increasing single-store output requires a high degree of product variety.

Yet, Sa Mo currently operated nationwide primarily through a dealership and agency model. This approach allowed the group to avoid tying up too much capital.

This had been a necessary measure back when the Sa Mo brand was starting out and cash flow was tight.

But therein lay the problem. Now that the national dealership model was established, its drawbacks were becoming apparent!

On one hand, distributors were cautious about opening new stores, refusing to do so unless they were certain of a location’s potential. On the other hand, they were cautious with their orders. To avoid accumulating excess inventory, distributors preferred to order products with depth rather than breadth.

The advantage of this was that it was easier to manage sizes and less likely to run out of specific ones.

The disadvantage was that the lack of product breadth gave customers fewer choices, which in turn hurt sales performance.

But when forced to choose between performance share and inventory pressure, distributors clearly prioritized avoiding the latter.

As a result, Sa Mo’s channel expansion had slowed to a crawl. The distributors’ annual procurement volumes increased only marginally, and whenever the parent group wanted to implement bold reforms, the distributors would band together for mutual protection.

Under these circumstances, no one at the Sa Mo brand dared to act rashly. If the distributors resisted and caused a drop in the brand’s performance and profits, someone would have to step up and take responsibility. Obviously, no one wanted to be the bad guy.

This is the downside of large corporations. They know where the problem is but do nothing about it. Everyone is just thinking about self-preservation first.

The operators, worried about being held accountable by investors for reduced returns, could only stick to the old ways, even though they knew there was a problem.

It was at this moment that Zhang Shijie came knocking. The key difference between the Yino Group and Sa Mo just so happened to be their business models.

The Yino Group operated on a completely direct-to-consumer model, free from the troubles Sa Mo faced. Of course, the direct model had its own drawbacks.

It tied up a lot of capital, and all inventory became the company’s liability. The pressure of inventory turnover fell squarely on the company, unlike with Sa Mo, where the distributors footed the bill.

But was tying up capital really a problem for the Yino Group?

Zhang Shijie joked with them, "The Yino Group is so poor right now, all we have is money!"

With two billion on the books, they stood tall and proud. Money was better than any kind of vitality pill!

If Sa Mo accepted Yino’s investment, they could leverage Yino’s direct sales channels to counterbalance the distributors, or even eliminate them entirely.

After all, Yino had management teams in every province, and the funding issue would be solved. Getting rid of the distributors would also maximize profits.

Because of this, Zhang Shijie’s proposal to acquire Sa Mo was starting to tempt them.

Furthermore, Zhang Shijie promised them that after the acquisition, the Sa Mo team would continue to operate independently!

His thinking was correct. Brands with different positioning need dedicated teams to manage them. If the people responsible for "Yi Rui" were put in charge of Sa Mo, Sa Mo would quickly be turned into another "Yi Rui."

If Yino Company could achieve a controlling stake in Sa Mo through an equity acquisition, they could then adjust its business management style, optimize resource allocation, and enhance its market competitiveness. Both companies could break through their current bottlenecks and achieve a win-win situation.

"President Zhang, I don’t know much about the retail side of things, so I won’t offer any advice. But there is one form of support I can provide!"

"Sa Mo is now considered one of the top fashion brands in the domestic market, with high visibility. If the acquisition goes through, I can arrange for Chanel and Sa Mo to launch one or two co-branded items to boost the brand’s influence!"

What? Zhang Shijie thought he must have misheard.

"President Chen, when you say Chanel, do you mean *the* Chanel, the international luxury goods giant?"

After receiving Chen Xiao’s affirmative answer, Zhang Shijie’s shock was beyond words. That was Chanel!

A collaboration with them would do more to boost the brand’s influence than spending hundreds of millions on advertising. It was an incredible boost to their prestige.

He didn’t ask if Chanel could collaborate with Yino. He knew Yino wasn’t worthy!

Of the two brands under the Yino Group, "Yi Rui" targeted the mid-range market, and "Yino" had no significant influence. Even if President Chen’s family owned Chanel, a collaboration like that would be impossible. The damage to Chanel’s brand would be immense, not just a minor setback.

Sa Mo, at least, had already secured its position at the pinnacle of the domestic fashion scene and had a considerable market share.

If President Chen hadn’t said it himself, Zhang Shijie would have dismissed it as a complete fantasy.

He knew President Chen’s capabilities and that he didn’t make empty boasts. If he said it, he was confident he could do it!

Now, he felt confident too. He believed that if he used this information as a bargaining chip, Sa Mo’s actual controller would probably be crying and begging to cooperate. After all, this was a chance to elevate the Sa Mo brand’s value to its peak.

This was an opportunity they wouldn’t even dare to dream of.

With this promise, Zhang Shijie’s confidence soared. He was now filled with lofty ambitions for the future of the Yino Group!

After all, while the Sa Mo brand’s value would increase, Sa Mo itself would become one of the brands under the Yino Group. Naturally, Yino’s strength would rise with the tide!

As evening lights began to glow, the streets were choked with traffic. It was rush hour, and the roads were gridlocked.

But in the small conference room outside the general manager’s office at Four Seasons Clothing, the negotiations were not going smoothly.

Jack Zhang, Sa Mo’s National Sales Director, listened with a displeased expression as the expansion supervisor from Four Seasons Clothing reported on Sa Mo’s channel layout.

After the Four Seasons Clothing representative finished the report, Xia Bin said very politely, "Jack, the Jiangzhou Wansheng Store we are about to enter is one of the best locations in Jiangzhou. We project its annual sales will be no less than 10 million!"

Jack Zhang’s expression remained neutral as he calmly stated, "I have no objection to Sa Mo entering Jiangzhou Wansheng Square. What I want to say is that we cannot lose the Ganglong International store. This isn’t simply a matter of closing one store and opening another one in Jiangzhou Wansheng Square!"

"Ganglong International’s strategic importance is irreplaceable. If Sa Mo no longer has a store there, where will the brand’s prestige be?"

Visit and read more novel to help us update chapter quickly. Thank you so much!