David Rosenthal: belief

Transcript context

…That's $10 cheaper than what they offer Bernard. But De Sole and Ford are going to continue to control the board. As part of it, they're going to cancel this ESOP thing. They all agreed in principle on the deal, and Pino's like, I got one more thing I think you're going to like. I was thinking anyway about buying Sanofi's beauty division, which has a couple of assets that I want. But buried within it are the remnants of a label you might be interested in called Yves Saint Laurent that is now owned by Sanofi. I'm thinking about buying it. If I do that and we do this deal, I'll give you guys Yves Saint Laurent and you can run it. Ford asked, did I want it? And I said, F yes. Yves Saint Laurent is the number one brand in the world. They're so bitter at Bernard and LVMH. All of them together, now they're like, we're going to go crush these guys. They announced the deal and Bernard goes nuts. This could not have backfired more spectacularly. He had the option to buy it on the table for $400 million, to buy Gucci. He missed that. Then he thought he was going to be cute and do this, and instead he just created an incredibly well-capitalized, direct competitor with its own legendary fashion brand within it. Yup, brutal. Kering to this day is the number one rival. When you look at luxury groups, you've got LVMH, which is a monster doing $80 billion in revenue. Then you look around, you've got Kering, which is much smaller, but the closest at $13 billion in revenue, and Richemont, which we haven't talked about it yet but is a Swiss company. They own Cartier and some other things doing $14 billion in revenue, so everyone else is down around that range. There are some other family-owned players, not in this category, but in jewelry. Rolex does $13 billion. You've got Chanel, which does 16 billion, but that's privately owned by the family. You've got Prada, much smaller, $4 billion in revenue.…

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