She looked tense in the grim basement office without a window, when Mike arrived for the meeting, looking friendly and relaxed. This was obviously one of the things he did best. Negotiating was not her strong suit, especially when she felt threatened. But at least she was on home turf. Paul had offered to join them, and she declined. Now that she knew Mike, she wanted to meet him face-to-face, alone. She thought it would go better. She handed him a mug of steaming coffee and they began.
She listened carefully to what Mike envisioned for her, given what he’d read and studied so far. What struck her immediately was how bright he was. He really was brilliant, just as people said of him. And he seemed like a straight shooter, which she was too. They were two smart people meeting on a level playing field.
“First of all, you need a well-set-up online business, with all the merchandise you have in the store, and maybe some special opportunities as an incentive. And you need that right away. It will double your sales overnight.
“Next, you need to find a way to expand. I think the annex Paul Trask suggested is just a patch on a leaky tire. It’s a half-assed solution that will be complicated to run, and more of a headache than an asset. I think you need to move to a bigger facility, and move out of this neighborhood, either uptown or down. But you need to get out of here. It’s dangerous, for your customers and your employees. The police reports on this area are alarming, particularly on this block, we checked. You need to get out while you can. You can sell the building, not at a huge price, but you’ll make some money on it, to put toward a bigger store somewhere else. Those are the two biggest changes that I think need to happen. Then you can fine-tune it later. You should probably look at a new warehouse facility too. The one you have is leaking like a sieve and that’s costing you money too.
“You need an influx of money to accomplish those things. You can borrow from a bank, but they won’t give you as much as I will. We can both figure out exactly what you need, and I’d be willing to commit what you need to do this right.”
“And what would you want in exchange?” she asked him directly in an even tone. She was calm after listening to him. The conversation hadn’t been heated so far. It was honest. They were both straightforward people.
He didn’t hesitate before he answered. “Normally, with an investment this size—and it will be sizeable, if you include the cost of buying a new building, and not a small one, in an upmarket location—in most cases, in that kind of range, where the money is at your disposal as you need it, I would want full control, or at least majority control. It gives us some leverage to help you run the business and see things our way. But I know how much this business means to you, and why. The deal will never happen if I try to take control. I know how much you don’t want that. I would be willing to accept forty percent ownership, which would leave you majority control, because I trust you, for two years, with a set or sliding amount in two years, which would give me majority control then. I’d say an amount somewhere between twenty and forty percent more, depending on how well you’re running the business.”
“So, what you’re saying is that after two years, you would own either sixty or eighty percent of the business, and I would have minority participation.”
“Yes, that’s what I’m saying, and we would want you to stay on with a contract to run it just as you do now. We could settle on a number you’re happy with. And long-term, I think you could open several stores around the country, if you have good people to handle the merchandise, and that would be a big moneymaker for you too.”
“But whatever I do, I’d get the money from you now to make all these changes, but two years from now, you’d be the majority owner, and I would only have between twenty and forty percent ownership?”
“That’s correct.” He looked her straight in the eye as he said it, hiding nothing.
“I can’t do that. You know I can’t. I’m not going to give up ownership of my store. That’s why I didn’t want to meet with you in the first place. I agree with you about the online shopping. We have to do that, we’re way late with that. I should have done it before. And you may be right that an annex would turn into a problem. But I don’t want to move uptown, or downtown. We’re not ready to do that, and because of the money it would cost, I would sell myself into slavery to you, and you would own the store. That doesn’t sound like a good trade-off to me. And it may be somewhat dangerous down here, but none of our customers or employees have gotten hurt so far. Some of the residents have, but no one in our Brooke’s community. Mike, I can’t take the deal you’re offering me.” She looked sad. It was everything she had expected him to say and didn’t want. He didn’t look surprised.
“Will you think about it?” he asked her gently.
“No,” she said. “It’s the definition of everything I won’t do. And it’s not what Brooke’s is about. I don’t want to be a big uptown department store. And if you have control, who knows what kind of merchandise you’ll force us to carry. We’re a luxury brand specialty store, with many one-of-a-kind items we travel the world to find, which is why people come here. I’m not going to sacrifice that, not for what you describe, which would be my worst nightmare. We can’t make a deal, Mike. There is no offer here of any interest to me.”
“You could lose your business one day and go under, because of the changes you’re not willing to make now.” He was trying to scare her, but it was also a real possibility.
“We’ve been in business for seventy-three years. I figure we might last a while longer, doing things our way. My grandfather taught me to fight for what I believe in, and that’s what I’m doing every day. I’d love to have your money to make some big improvements here. But not at the price I’d have to pay. I might as well sell you the store outright today, instead of waiting two years to have you take control of it then.”
“That would be a possibility too,” he said. He wasn’t trying to insult her. This was business, and he was a smart businessman. He was looking for the best deal to serve his own interests, not hers, and she knew it.
“You would ruin it,” she said, standing. “The store isn’t for sale, Mike, and I don’t want a majority partner. I think we’re done here.” He stood up and looked at her regretfully. Once he knew her, he had suspected it would come to this. “Thank you for the offer, which I gratefully decline.”
“Let me know if you change your mind,” he said.
“I won’t,” she said, and he walked to the door and closed it quietly behind him. There was no deal to be made.
Mike advised his team that afternoon of the outcome of the meeting with Spencer.
“There’s no deal possible,” he told them simply. “She won’t give up control.”
“She needs the money,” Joe Weiss said, “or it’ll strangle itself eventually. If she can’t expand, it’ll just die on the vine.”