EVIAN, France — A company is made of tangible and intangible parts, said Javier Cano, chairman and chief executive officer of Puig Beauty and Fashion Group, in his keynote address titled "The Value of a Company — Internal Ways to...
EVIAN, France — A company is made of tangible and intangible parts, said Javier Cano, chairman and chief executive officer of Puig Beauty and Fashion Group, in his keynote address titled "The Value of a Company — Internal Ways to Grow."
Cano said that the tactics generally used to generate internal growth require heavy investments in advertising as well as the development of new brands, activities and categories. He added that companies can also increase their international reach and enter new channels of distribution to drive this development.
Beyond these, Cano said firms have taken the acquisitions route. However, this latter method has become increasingly costly in recent years.
"The individual consequence of a market with a high demand and a comparatively low supply of adequate companies has been the higher and higher valuation of the companies acquired," said Cano. "Some of the quantities paid last year would have seemed impossible only a few years ago. In some cases, it’s difficult to believe that even a distant return on investment can be obtained.
"What value does an investor feel they will receive when they pay a substantial amount of money for shares of a specific company?" he continued. "Why am I paying 50-times profits on a specific company and only 30-times on another, which is doing similar things?"
While costly, there are some upsides to acquiring a company. It can help drive pure growth, boost market share, reach new markets or act as a solid profit generator.
On the less tangible side, Cano said acquiring a new firm can also lead to acquiring new ideas and potential.
Before buying a firm, he explained, it is important to make sure it has had a good track record, history of growth and profitability, plus a promising future and intangible assets — such as employee know-how — that are full of potential.
"We will never fully understand the virtues of these assets if we don’t analyze the results of mixing them," he said. "For instance, if we have a relationship with an external supplier and mix that with R&D that is an internal procedure, this could lead us to develop new products with high competitive advantage."By improving the intangible assets of a company, the firm’s value increases, said Cano.
"Remember, the most important intangible asset is people," he noted. "It’s people and the sum of their knowledge."
Cano said attracting executives with high potential takes more than a high salary and the promise of stock options. At a recent debate at IMD business school in Lausanne, Switzerland, MBA students discussed what makes firms attractive to business graduates. The results included:
l The company’s public image.
l The company’s growth and track record as an indicator of how employees’ opportunities can evolve within the firm.
l The possibility of doing a job requiring initiative and an element of freedom.
l How a career can develop within the firm.
l How a company handles its selection process and welcomes new employees.
As for how a firm can retain promising executives, Cano said internal transparency, the possibility of making a mark, the working environment and feedback are key.
"Once inside the company we have to use all the means we have to increase the level of knowledge and competence," he explained. "And in as much as this level of competence increases, we will also increase our intangible assets — and therefore the value of the company."
Supermodel @helenachristensen teamed up with longtime friend and designer @camillastaerk on a joint @paredeyewear collaboration. The lineup features three styles and 11 offerings, all of which embody a vintage feel. Get all the details on how they celebrated the collab on WWD.com. #wwdaccessories #wwdeye (📷: @slovekinpics)
“It’s a hard industry to keep motivated, as well, so finding different subjects and people is what makes it worth it – when you’re like, oh, I’ve met great people, I feel like I’ve done something good, and I feel proud of having done this,” said French actress Stacy Martin on being grateful for the variety of roles she’s take on. Read @ktauer’s full interview with Martin on her her latest film “Godard Mon Amour.” #wwdeye (📷: @danieldorsa)
After showing in front of the Eiffel Tower for his last two women’s ready-to-wear collection, it looks like @anthonyvaccarello may be heading to the Big Apple. Sources say the designer will stage his next @ysl show in NYC on June 6. Get all the details on WWD.com. #wwdnews #wwdfashion (📷: @aitorrosasphoto)
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion