Chapter 767: Three future Fortune 500 companies

Peter Lynch smiled and said, 'This company happens to be in California, and the store in San Francisco happens to be within 50 meters of our company, so we were able to discover it. Moreover, this company's warehouse membership store model is original and unique in the world. The company's observation and analysis shows that it is worth trying to invest in.'

Xia Yu nodded slightly to show his understanding, but in any case, listing this unlisted company is commendable.

He was also a little curious about the situation of this future second-largest retailer in the United States, which had not yet undergone metamorphosis, and was a component of one of the world's top 50 retail giants, even though its name was different at this time.

With some expectation, Xia Yu browsed through the details, and the corner of his mouth couldn't help but rise.

PriceClub!

Translated into Chinese, it means Price Club.

This company was founded in 1976 by two brothers, Saul Price and Robert Price, and its headquarters is located in San Diego, California.

The company has a unique business philosophy. By establishing a shopping club, it gathers the scattered purchasing power of individual members and places large orders with manufacturers in a unified manner, which not only saves distribution costs but also achieves economies of scale. This is somewhat similar to the domestic group buying intermediaries of later generations.

However, due to capital constraints, Price Club stores have no frills, hardly advertise at all, and are located in convenient places to save costs.

Moreover, it currently mainly serves small businesses, which is why there would be such a store 50 metres away from Polaris Capital, in an area with a high concentration of businesses and convenient transportation.

'Costco has not yet appeared, it is only the early stage of Price Club, and the scale is indeed small!'

Xia Yu's eyes flashed with a smile, and he thought to himself.

A smaller volume is good, as long as the model is sound, then it has the value of capital catalysis.

Now that it is small in volume, it is easier to acquire and the cost is low!

And most importantly, Xia Yu really likes the talent in the Price Club membership store, that is, the talent who came out of it and founded the real Costco.

The founder of the future Costco should still be the executive vice president of the Price Club membership store at this time!

Speaking of which, I have to talk about the twists and turns of the emergence of Costco.

The founder of Price Club, Saul K. Price, was a pioneer of the modern superstore. In 1954, he founded the first discount store, FedMart, which closed down due to poor management and low profitability.

Afterwards, Saul Price summed up his experiences and lessons and developed the membership shopping club model, which led to the opening of Price Club in 1976.

The real Costco was founded in 1983 by Jim Singalene and Jeff Brotman, not the Price brothers.

Jim Singalene had been an employee of Federated in 1954, working under Sol Price, and followed him even after the collapse of Federated.

He continued to work for the new company after the emergence of Price Club, and due to his more than 20 years of work experience, he was promoted to executive vice president every two years.

As for Jeff Brotman, he was not an old employee of Saul Price, but a management elite who joined after the emergence of Price Club.

The membership store model created by Saul Price inspired Jim Singanel and Jeff Brotman.

In 1983, unable to hold back their entrepreneurial spirit any longer, Jim Sinatra and Jeff Brotman quit their jobs together, moved away from California, and went to the East Coast of the United States, where Price Club had not yet set foot. They founded Costco Wholesale, a true warehouse membership store in Seattle, Washington.

The Costco model is a further optimisation of the Price Club model, and the area of a single store is far larger than that of a Price Club store.

After just two years of development, Costco went beyond the United States and opened its first overseas store in Canada.

In 1993, Costco and Price Club merged, and the real Costco company appeared.

Now, Costco has not yet appeared, but that doesn't matter. What's important is that Xia Yu knows the Costco business model very well.

The Wall Street capitalists of later generations have studied the Costco model thoroughly, and only by doing so do they dare to hold it for the long term. So it's not surprising that Xia Yu knows its model.

Knowing the model, and with more than 20 years of work experience and management capabilities, the founder of Costco was also at Price Club, where he served as executive vice president.

As long as Price Club was taken over, the two founders of Costco would naturally not be able to escape.

As long as Xia Yu got Costco out in advance, arranged for the two of them to run it, and promised them options, they would not be able to escape Xia Yu's grasp.

As long as they were tied down, then there was no need to worry about other competitors.

To be honest, Xia Yu admires Costco from the bottom of his heart. It has blazed a trail of its own and has great potential.

Wal-Mart is a traditional retailer, but the Walton family has taken management and operations to the extreme and made full use of the technology of the times, keeping Wal-Mart vibrant and making it the world's number one retail giant, with an annual turnover of more than 400 billion US dollars.

But what about Costco?

It has just over 700 stores worldwide, equivalent to only about 6% of Wal-Mart's total number of stores.

However, its turnover is one quarter of Wal-Mart's!

Its net profit is even closer to one third of Wal-Mart's!

Such a difference is determined by the model.

But this is not a denial of Wal-Mart, after all, being number one in the world is being number one in the world!

As for Wal-Mart, Xia Yu has now made up his mind to take over a large stake in the company. Of course, it would be even better if he could privatise the company and take over the entire company.

But Xia Yu also knows that this is unrealistic. Wal-Mart is controlled by the Walton family and is their only industry, so they will definitely not sell it to him.

Even if they sold it to him, they would start again with even more capital and make a comeback, and at that time they would be a huge threat again.

Xia Yu did not have enough confidence to let Wal-Mart, which had lost the Walton family, develop better than its original trajectory.

But anyway, it would be possible to become the biggest beneficiary other than the Walton family.

As for Price Club and the future Costco, since they were not listed, of course they would be directly acquired in full, and if that was not possible, they would have to lure the two founders of Costco to start their own business.

As long as they hold onto Wal-Mart and Costco, they don't have to touch other retailers.

Although most of the current retail giants can be developed into future generations, their potential is limited. The market value of most of them has only increased by a factor of 10 to 20 over the past 30 years. Xia Yu doesn't bother to go head-to-head with large consortia for such companies.

Just like Kroger, although its annual revenue in the future will also reach hundreds of billions of dollars, comparable to Costco, Kroger, which was founded in 1889, has long been acquired by large consortia, and Kroger in the future, limited by its management and model, has high revenue but low net profit, with a market value of only more than 20 billion U.S. dollars, less than one-fifth of Costco's.

Today, Sears, the 'king of department stores' that is controlled by the Chicago consortium and is in the prime of its life, will even end up going bankrupt in the future.

He shook his head slightly to dispel the jumbled thoughts in his head, and once again focused his attention on the material.

He flipped a few pages forward and found Dayton Hudson Corporation, which had a market value of only 370 million US dollars. He took a pen and put a check mark here.

In this material, apart from Wal-Mart and Price Club, this company was the most suitable one to start with.

Dayton Hudson Corporation was founded in 1962, the same year as Wal-Mart, and its market value was a few hundred million US dollars higher than that of Wal-Mart.

In later generations, Dayton Hudson will be renamed Target Corporation, and it will also be among the world's top 500 companies in later generations, ranking more than 100th, with a market value of 50-60 billion US dollars.

With a current market value of only 3.7 billion US dollars, there is still room for appreciation of 100-200 times, making it the company with the greatest potential besides Walmart and Price Club.

These three companies are all among the world's top 500 companies in later generations, and they rank extremely high, with one ranking first in the world, one ranking among the top 50 in the world, and one ranking among the top 100 in the world!

With these three companies, Xia Yu's retail sector will be as stable as Mount Tai.

Not to mention the future world number one in home improvement retailing, The Home Depot, which is simply unbeatable!

If he can get a few more in other fields such as pharmaceuticals and home appliances retailing, the Jiuding consortium will be practically invincible.

After circling the names, Xia Yu handed the list to Peter Lynch and said, 'I have circled three companies: Wal-Mart, Dayton Hudson and Price Club.

'Of these, Wal-Mart and Dayton Hudson should be acquired as much as possible, and it would be best if we could achieve a controlling interest.'

'As for Price Club, you should have someone form an acquisition team and go all out to acquire it, but I have one request, and that is that the middle and senior management team must remain intact!'

Peter Lynch's face became solemn, and he nodded in response, 'Okay!'