Undoubtedly all of you have heard, seen, or may even have product brands such as W.Kruk, Vistula, and Wólczanka. But if any of you know that Vistula and Wólczanka was one company? Or, what's more, if anyone has heard that Kruk was hostile acquired by V & W and how he ultimately took back his family business? No? So here's the story.
For me it was the most exciting duel in 2009. Two styles of doing business clashed with each other . Traditional, represented by Wojciech Kruk, the owner of the most famous jewelry, and a modern, dynamic, which embodies Rafał Bauer, former president of the group-Wólczanka Vistula. In this duel from the beginning Kruk defended lost positions. - If someone introduces a company on the stock exchange, preserving for the family 28-percent package, it must reckon with the fact that at any moment may lose control of it - stock market experts say.
PET TICKER
With this, perhaps yesterday, W.Kruk business philosophy developed well, especially in recent years when the company (since 2002) was already in the stock market. Sale of the same ring grows at a rate of 50 percent. year, so shareholders W. Kruk looked with pleasure, as profit on each share is doubling every two to three years. Wojciech Kruk’s position (formally was the chairman of the board) did not seem threatened. In any case where a year before any of the board members mentioned that the city whisper that Wólczanka wants to buy the company, Kruk played down the rumor. The family, though in their hands were only mentioned 28 percent shares remained the largest shareholder. Disputes, because about 40 percent package belonged to different investment funds, which is only interested in whether the shares earned. If so - do not interfere in the management. Otherwise, just get rid of the paper. For Kruk it seemed that if a company lays the golden eggs, he can sleep peacefully.
And it was a mistake. The company began to sharpen the teeth of Raphael Bauer. The younger of the Wojciech Kruk by more than 20 years with the market opinion of a hard player, for which counts only numbers, not sentiment. Wólczanka, after winning the title the best employer in the country under the Bauer completely reduces employment. But it begins to regain a good market position. Not only meets a plus, soon after connected with Vistula in Krakow, and then takes over the Galeria Centrum. Bauer invests in production, but he knows he needs is a network of stores. He has a bold vision for the group, wants to become the Polish equivalent of the French giant LVMH, known for its luxury handbags Louis Vuitton, Dior Cosmetics, Givenchy, but also the brands of alcohol, such as Dom Perignon.
Various products of the highest quality link has the same target - a group of wealthy customers. Some scoff that it’s far from Wólczanka to Dior but it has long been closely, though in disguise Jerzy Mazgaj, a businessman from Krakow looks at it. The upper shelf, which Bauer only wants to climb, Mazgaj already is. It owns a collection of luxury delicatessen Alma Market. But it’s not all - his company Paradise Group operates in Poland, the world's ultra-luxury boutique brands such as Ermenegildo Zegna, Burberry, Emporio Armani and Hugo Boss. In the group of which Bauer dreams, Mazgaj would feel like a fish in water. To dream of the luxury goods group Bauer golden egg, which is W. Kruk, fits like a glove. Therefore, with no attempt to talk with Kruk family, he offered to other holders of the shares to sell them to Wólczanka after 23 zł 70 gr per each, which is more expensive than the stock market at that time.
About hostile takeover attempt Wojciech Kruk found out from a journalist who called to ask about the first reaction. On the same day he received a letter from Maciej Wandzel as the head of the supervisory board of Wólczanka that there is no hostile intent against him and that he can not imagine W. Kruk without Kruk, and therefore asks him for a meeting. He imagines that Wojciech Kruk could be the head of the supervisory board of the group. Kruk still did not answer.
INDEFENSIBLE
Stock market experts are surprised that Kruk is not actually performed any attempt to defend. - He could convince the funds that the firm, where he will continue to monitor will bring them higher profits. He could also look for an investor with the capital and announce contra-call. So, when Wólczanka was willing to buy shares at Kruk 23 zł 70 gr, he should raise the price. Instead, media reports began to appear that if the hostile takeover is successful the Kruk's family will establish a new, competitive business. Kruk’s opinion is that fitting a group of luxury goods is not the slightest business sense. Diamonds and Rolex are sold differently than shirts.
Ideas to defend the company, according to Wojciech Kruk today, came to him after time. Even the bank reported to him, ready to mediate in finding an investor. A known family business jeweler from Milan was intended to be as such. First, Kruk was satisfied about the merger with Italy but he resigned when he began to count. He will propose a price of 24 zł, and Wólczanka will raise it. That is indeed what happened - Wólczanka raised the price to 24 zł 50 gr. What will this auction end at? That Kruk at age 60 will have to defend a loan, which he will repay to the eighties. Since Wólczanka had to borrow 300 million zł to take 66 percent of W. Kruk shares, he, together with Italy, would have put at least 200 million zł.
So he talked with himself: His father's jewelry shop, which - in today's money - would not be worth more than half a million. I made it a company, part of which is worth 150 million to the family. There is nothing to be ashamed of. You can not risk losing the money. And finally, he decided to take the money. Shareholders heard that Kruk family sells its stake to Wólczanka. After almost 170 years, the company W. Kruk ceased to belong to Kruk.
To this day he is convinced that any attempt at defense was doomed to failure.
When he established the belief that he did well, earning money, came up with the idea. What if some of that money I will invest in shares of Vistula-Wólczanka? Actions group, also due to ingestion of a large loan to Kruk, seem quite cheap. Wojciech Kruk for 30 million zł buys 5 percent Vistula-Wólczanka’s shares and when Maciej Wandzel heard that Kruk will try to come to the board of the group, he gone crazy.
THE SECOND ASSUMPTION
Jerzy Mazgaj, who had been buying Wólczanka’s shares quietly, after crossing the 5 percent he had to disclose. It’s 6 percent and Kruk’s 5 percent in sum it was only 11 percent. Or even, because it was enough. The company's shares are distributed, and its shareholders are the most serious investment funds, because Wandzel and Bauer withdrew capital from Wólczanka and it was no longer in their control. Bauer's idea to build the luxury goods group, so far recognized as excellent. It was great for them that young, effective manager without sentiments is managing Wólczanka. They also did not mind Maciej Wandzel, although it’s Supernova Capital has no control over the company, remains chairman of the board.
Suddenly everything has changed. Jerzy Mazgaj, as one of the largest shareholders, demanded that the agenda of the AGM (Annual General Meeting) put the point "changesin the supervisory board." - And so Mazgaj with Kruk, with the support of certain funds, including PZU, rescued Wólczanka from the hands Wandzel and Bauer. If Kruk, having in the hands just 28 percent of the company's stock should have been expected to lose control of it, I think more should be prepared for both Bauer as Wandzel who donot have shares.
Kruk and Mazgaj beat of Bauer's own weapons, without sentiment. However, to avoid surprises in the future, they want to issue new shares, to enlarge their packages. It is not good when a company has no clear owner who has an emotional relationship to it because in business although cold calculation really counts, but - as shown by the story - emotions tend to be equally important.
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Honestly, I'm not interesting in such stories. It's not important for me to know who is the owner of companies like this. I don't buy their products and I don't suppose I'll in the near future. But probably for people who are interesting in business and stock market it can be absorbing.
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ReplyDeleteThis presentation is a good starting point to discussion of rules in the business. What is the most important - money, people or control? Nowadays, probably is just the one answer - money (today, my humour isn't joyful, so sorry, but I must some complain... ;] ). Fortunately, this story has a positive ending. So we should remember about one, but really important issue. When we are making decisions, we should know that all our decisions have got an influence to others.
ReplyDeleteI think, that this presentation is very interesting and first of all - extensive. W. Kruk is the company which is very known in this time, but sometimes we should know something about company history. I tidn't buy their products, but I think that it must be very beautifull and ellegant. So meybe in the future...
ReplyDeleteIt is sad that a company with such a good brand and such long history has become a battlefield for getting the shares, power, influences, money... Apparently in the business world do not count such values as honesty and respect. More important is to be clever and sometimes self-serving. When I hear about the multigenerational companies with traditions, I am full of respect for these people and I appreciate their hard work. I hope that these companies will continue to exist in spite of such unfair competition in business.
ReplyDeleteI agree with you, and these multigenerational companies make people trust them more, but unfortunately we often see only one side of the coin and sometimes families that lead the business start arguing "inside".
DeleteI'm not a big fan of Wólczanka or Vistula, because they are typically male brand of clothes. Nevertheless, I think that if someone can't afford for suit from Hugo Boss - Vistula is a good alternative. In my opinion this suits are really good quality and usually nice fit.
ReplyDeleteJewelery by W.Kruk is really very beautiful. Unfortunately, daily I don't have occasions to wear this kind of jewelery but in the evening or for official meetings it's perfect! In my opinion their products are universal and everyone can find something for themselves.
That story shows the truth about people who want to be rich. No matter which way we accomplish our purposes. Money changes people. Story about intricacy of business is good lesson for us, that money isn't everything...
ReplyDeleteIn the world, and even in Poland there are many upscale businesses. Vistula and Wolczanka are of a very good example. I have the same shirts or other items from these companies. He always wanted to be president of the company.
ReplyDeleteIt can be very enlightening to hear lifestories of big businessmen. We can learn about their mistakes and how money changed their life. We have to remember that being rich will not last forever if we are not prepared for that - there are examples of people who won a lottery and spent all there money on pleasures in last week's note.
ReplyDeleteOf course, I don't see myself becoming rich in near future, but who knows what can happen tommorow? I think that more important than money is still being a human, because money can really mess in person's head.
This presentation can prepare people who want to start their own business ow to avoid mmistakes. It shows we need to be broad-minded and very resposible, economy should have no secrets for us.
ReplyDeleteHowever I am not interested in such things.. the presentation is a litlle bit boring for me :)
Is really interesting presentation about how people became rich, but also it shows us how money change people. From this presentation we can learn the rules that apply in business, and how to make a decision which cause that we will achieve success. W. Kruk , Wólczanka, Vistula are great comapny which have fantastic story and history.
ReplyDeleteFirst of all, thanks to this presentation I got to know a lot more about excslussive business. Truely, I have never been interested in sush things because I am a buyer. But if I were a businesman I would like to gather this kind of information.
ReplyDeletecompanies like Vistula, Wólczanka, Hugo Boss or W.Kruk are ones of the most recognisable in the world. unfortunately, most of us rarely buy sth here, because this shops are very expensive. Surely, a quality of clothes or jewerely is very high, we know this and agree with the price.
ReplyDeletepeople often think that exclusive shops are only for businessman, for person who has a lot of money. For others is another solution, we can buy this thing, in the same quality, in second-hand shop. Of course, impression when we exit from one of this shop is not comparable, but it's a issue of yourself decision.
I don't know the business and completely I'm not interested in it. Of course I admire the people who built their little empire. Exclusive business requires large amounts of money and therefore the products of such companies are very expensive and unfortunately not available for all people. However, there are so many rich people who are potential consumers of such products.
ReplyDeleteThe most fantastic think of this story is that W. Kruk , Wólczanka, Vistula are companies from Poland! It shows that we can achieve a success on our national market and the best in one branch of the economy, but also be appreciated abroad.
ReplyDeleteI admire your dilligence. It is really long presentation, but reading it gives us new view of making a success in business and shows how huge influence have money on our life, how they are able to change us. It was worth-reading text!
ReplyDeleteTo be honest I'm not really interested in the history of these brands. I know them, I know that they are Polish but I'm not interested in the history of their owners. Wólczanka and Vistula are brands for men so I don't buy in them but I know that they sell good quality clothes. I think all men in our country should buy their suits in Polish companies to support our businessmen.
ReplyDeleteJust received a check for $500.
ReplyDeleteSometimes people don't believe me when I tell them about how much money you can make filling out paid surveys online...
So I show them a video of myself actually getting paid $500 for doing paid surveys to set the record straight once and for all.