Love Affairs in Melbourne-Chapter 274 - 269: A Dazzling Appearance (8)

A company that accepts investment earlier will own a smaller portion of it by the time it goes public.

Comparing wealth with "nations’ worth" investment institutions, Yan Yan’s existing assets were truly insignificant.

But if a company doesn’t lack money during its development, it isn’t necessary to go public.

For private enterprises, firstly, they don’t need to disclose their performance; secondly, they aren’t subject to various departmental supervisions; and thirdly, they don’t have to explain to investors where exactly the money is spent. In short, if there’s no need for "high-speed" capital for expansion, staying private has many advantages.

Take Y·Y now for example, completely disregarding money, only opening for half a month each, such a waste of rent and resources—should this get included in a public company’s financial report, they’d surely be criticized to death by investors and shareholders.

If Y·Y went public, it definitely couldn’t continue to be capricious.

Unless it’s like Salvatore Ferragamo, only listing a small portion of shares with the simple goal of becoming more standardized and modern under public scrutiny, and to ensure better legacy.

By the time a company like Ferragamo goes public, investors would be clamoring to get in.

This style of listing would still keep most shares firmly held by the family.

Whether it’s going public or delisting, in the end, it’s all up to "one’s own family."

In short, regarding accepting investments, going public, or "formalizing,"

the Yan siblings, feeling their way across the river by groping the stones, really hadn’t decided at this stage.

The fashion brand Y·Y is not currently facing any financial issues, so the Yan siblings are not in a hurry to consider going public.

While the siblings themselves are in no rush, smelling the scent of money, those investors eager to create the next Wall Street legend are.

For investors and institutions, the situation they face is the complete opposite of that of entrepreneurs.

If you’re optimistic about a company, the earlier you enter, the lower its valuation and, when it goes public, the higher the return on investment.

Wall Street’s interest in Y·Y is a good thing, but whether to accept investment is a tough decision.

Next, Y·Y will definitely need to speed up the opening of stores globally.

If using their own funds, this would certainly affect the speed of expansion and bring higher risks.

Expanding with someone else’s money means many decisions would no longer be under their control.

And receiving a large investment to quickly open hundreds of stores is certainly not what Yan Yan wanted to see.

Yan Yan came to New York primarily to align Y·Y’s brand with Yan Ling’s dreams.

Y·Y, being a fashion brand, often launches an entire series.

T-shirts, sweatshirts, hats, pants, bracelets, necklaces, belts, wallets—the list goes on.

Many "regulars" are also special guest designers of the brand.

Fans’ sense of identification with Y·Y stores is also higher than other brands.

After all, turning deliberate troublemakers into fans is something not many brands can achieve.

In fact, even though each Y·Y store is successful, the operational costs are high—the staff’s wages, wages for designers signed to the studio, and the fees for guest designers.

With all these combined, the net profit is not as "juicy" as Y·Y might appear.

Y·Y stores all make money, but considering the initial investment on fit-outs, rent, and the imposing presence of "Master Y" in each store, none of those expenses are "small."

To recoup all the investment, relying only on the current business model, would certainly take a long time.

Making money this way is definitely not as quick as Yan Yan putting money in a private equity fund.

The Yan siblings had realized this issue quite early on.

Y·Y stumbled upon the path of fan economy, barely knowing how to proceed.

Fans are not "cash," but acquiring them is often extremely expensive.

Especially in the current internet era, "traffic" is the most costly.

Ordinary brands looking to match Y·Y’s current fame would have to spend hundreds of millions on advertising alone.

And yet, the "traffic" attracted by ads can’t even be considered as fans of the brand.

Y·Y’s brand value increase is evident from the growing number of queueing fans each month, and Wall Street’s interest is in Y·Y’s intangible assets.

However, converting brand value into revenue is another problem.

Although Y·Y’s product range is much wider than other brands, Y·Y still isn’t considered a comprehensive brand.

Y·Y has never produced shoes, not even a single pair.

It’s not that Y·Y’s large group of designers hasn’t designed shoes, but no design for shoes has ever been approved by the elusive and likely Master Y as the design director.

Many designers who tried repeatedly never saw success.

Finally, they came to a conclusion: Master Y has "eyes" everywhere except on his feet; he can’t scan shoes.

If opening only half a month each is a form of scarcity marketing, then fans waiting for Y·Y shoes are certainly "skin and bones" by now.

When Yan Ling mentioned in an interview that Y·Y would become a more comprehensive fashion brand, he was referring to shoes.

Master Y’s feet are not blind at all; he has "eyes" all over.

Of course, shoes can also be scanned by Master Y.

But shoes are different from clothes; they can’t just be loose and made of good material to be comfortable.

Y·Y needs to leave enough space for shoes, and this is where Yan Ling’s "forte" lies.

Shoes surely can’t follow the crowdsourcing approach used for other categories.

The previous unique business model captured attention and enough thirst, but it didn’t bring in enough money. Most importantly, it did not bring the Yan siblings closer to their dream.

Initially, opening only half a month was a move out of necessity. As time went on, it was a deliberate choice by the siblings.

Two months later, all Y·Y stores would come to an end with the "inhumane" opening times, criticized for a long time by fans, not knowing exactly which day they open, often queuing overnight for nothing—disregarding fan "life or death."