Chapter 119 (2) - The Mysterious Art Museum
"Two tracks? Does that mean there are two business areas?"
"Yes."
"How so?"
Monica, removing her hand from her chin, explained.
"Have you heard of the term 'Contemporary' brands, Ban?"
I have no idea. It's completely new to me.
"Nowadays, in department stores, there's a separate floor for brands belonging to this category, distinct from luxury brands."
"What kind of brands are they?"
"They are brands that respond to current fashion trends."
"I see."
So, unlike timeless luxury brands, these are brands that quickly adapt to changing trends.
"Aren't all regular brands like that?"
"Yes, but there's a difference. Brands in this category are created by internationally renowned designers and, compared to ordinary clothing, are priced higher."
"How much higher?"
"Lower than luxury brands but much higher than regular brands. Not quite mid-range but slightly below?"
"Hmm."
"So, you can think of a T-shirt in this category being priced around 400,000 Korean Won."
400,000 Won for a T-shirt?
Indeed, considering Monica gifted me a shirt costing 1.5 million won, it makes sense that anything less would be considered mid-range or lower. Still, I can't muster the courage to spend 400,000 won of my own money on a single t-shirt.
"So, are you saying one of your businesses will be a luxury brand?"
"Yes, like a sub-brand or a downgrade version."
"Like ZEGNA?"
"Oh, you know that brand?"
"Ha-ha, thanks to Monica, I got curious about high-end clothes and did some research. Their menswear is of great quality and expensive, but they also operate a separate sports brand, which seems a bit more affordable."
"That's right."
"Is this a common trend among companies nowadays?"
"It's been quite a while since many companies have adopted this business strategy. For instance, Armani operates with five representative tracks."
"Five tracks?"
"Yes, the premier brand representing their collection is Giorgio Armani, also known as the Black Label."
I've heard of that. Are there others?
"What else is there?"
Monica counted on her fingers.
"Armani Collezioni caters to business men and women."
Hmm, not sure about that.
"Another?"
"Emporio Armani and Armani Jeans target younger demographics."
"Oh? I think I've seen those in department stores."
"Ha-ha, and there's also the casual brand Armani Exchange."
"Ah, the one with the AJ logo?"
"Yes."
"Wow, that's really five different business areas."
"In fact, there are more. They also have a junior brand, a jewelry brand called Prive, and a furniture and home interior brand Casa."
"Wow, that's a lot."
Indeed, I was shocked when I saw a Gucci sofa at Mrs. Kang's house. Luxury brands seem to enjoy expanding their business areas.
But does expanding business areas like this really help?
"I don't quite understand. Wouldn't it be better to focus on one thing?"
Monica smiled and said,
"Ban."
"Yes?"
"Have you ever heard of New Money and Old Money?"
"No?"
What's that? Does it mean old and new money?
Monica continued her explanation.
"I usually avoid making classist statements, but in business, you can't ignore these things. New Money refers to self-made, newly affluent individuals."
Ah, that's what it means. A distinction between those who have been wealthy for generations and those who are newly wealthy.
"Really? I think self-made people are more impressive than those who were born wealthy."
Monica smiled.
"Of course, that should be recognized. But Ban, do you know? Almost 100% of people who fail in business are New Money."
"Really?"
Why is that? Do the old rich have so much money that it doesn't matter if a business fails?
Monica continued,
"Let's take an example of those born into wealth. In Korea, they are called 'gold spoons', right?"
"Yes, that's right."
I was annoyed when categorizing by spoons was trendy.
According to the kids, I was not even a dirt spoon but someone who ate with their hands.
Monica said,
"In Europe, they are called Trust fund babies."
"What does that mean?"
"Wealthy parents set up a trust fund for their child from birth, putting money into it. They create rules so the child can't just spend the money as they wish. The parents set these rules."
"Rules?"
"For example, if a mother who contributed to the fund says, 'My daughter can withdraw double the amount of money she earns from doing what she really wants to do every month,' something like that."
"Why would they do that?"
I don't get it.
People need lump sums of money sometimes. If such rules are in place, doesn't that mean they can't withdraw money?
Monica added,
"It's to prevent squandering a large sum of money all at once."
"Oh."
"Old Money groups are very smart and cautious in preserving their wealth. New Money, who only know how to make money but not how to keep it, lack this education. That's why most who go bankrupt in a flash are from the New Money group."
"Wow, I didn't know that."
"Yes, but as a businessperson, you have to earn money regardless of whether it's old or new."
"That's true."
"So, we divide our tracks. We first establish areas inaccessible to New Money and attract Old Money customers. Then, we launch trendy brands that New Money will be excited about."
"I see."
Now I understand.
Old rich want to be different from others.
New rich want to be different but also show it off.
Those wearing t-shirts with big luxury logos are mostly new rich or their family members.
True rich prefer high-quality clothes without visible logos.
To satisfy the different desires of these two groups, both wealthy but with varying tastes, the strategy is to go on two tracks.
After finishing her remaining coffee, Monica spoke.
"The store we saw together in Milan was meant for a luxury brand. And this time, when we go to Milan, I'm planning to purchase a store for the downgraded version of the brand as well."
I see. Monica is indeed a meticulous businesswoman.
Observing me nodding in agreement, Monica looked at me with a slight smile and said,
"And for both of these stores, I hope Ban will take charge of the design."
"Really?"
Huh? It wasn't just one?
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