Mondavi and Reality - ships passing in the night
Robert Mondavi Corp filed a press release Friday assuring Wall Street that they will achieve the numbers they had previously forecast for the divestment of their luxury wines ($400-500 million after taxes).
The HJWOW would like to reiterate its position that Mondavi cannot possibly achieve the numbers they have published without either:
a.) a significant change in their cost structure (which is what today's announced layoffs of 360 employees might be intended to demonstrate) with dramatically increased net earnings - as in 4 times greater.
or
b.) a buyer in need of a significant tax shelter.
This isn't the first time Mondavi has put assets on the market at ridiculous prices, either. The old Byron winery in Santa Barbara county has been for sale for years, as have several vineyards in Mendocino and a winery facility purchased for the Grand Archer brand that has been sitting idle for over three years. The Vichon/la Famiglia facility in Oakville finally sold last year after sitting on the market for over a year at nearly double the final sales price. Vineyards in Santa Barbara finally sold earlier this year, but not after the prices were brought down to reality. Seeing the pattern?
It seems as though this company thinks that every asset they touch turns to gold, at least in their eyes....how long will it take before the prices on the Luxury assets settle down to reasonable numbers? or is this the way that the family will get it all back - by being the only buyer foolish enough to pay a price far above what the Napa winery can return?
The HJWOW would like to reiterate its position that Mondavi cannot possibly achieve the numbers they have published without either:
a.) a significant change in their cost structure (which is what today's announced layoffs of 360 employees might be intended to demonstrate) with dramatically increased net earnings - as in 4 times greater.
or
b.) a buyer in need of a significant tax shelter.
This isn't the first time Mondavi has put assets on the market at ridiculous prices, either. The old Byron winery in Santa Barbara county has been for sale for years, as have several vineyards in Mendocino and a winery facility purchased for the Grand Archer brand that has been sitting idle for over three years. The Vichon/la Famiglia facility in Oakville finally sold last year after sitting on the market for over a year at nearly double the final sales price. Vineyards in Santa Barbara finally sold earlier this year, but not after the prices were brought down to reality. Seeing the pattern?
It seems as though this company thinks that every asset they touch turns to gold, at least in their eyes....how long will it take before the prices on the Luxury assets settle down to reasonable numbers? or is this the way that the family will get it all back - by being the only buyer foolish enough to pay a price far above what the Napa winery can return?
posted by Anonymous at 4:36 PM
2 Comments:
Hugh,
Any thoughts on Tim's abrupt departure today from the company...stepping down as vice chairman and winegrower and moving to a consulting role?
Is it possible that the recruitment of Jean-Michel Valette as president and m.d. of the luxury wine division is a way to reassure potential investors in the RMW that there's an executive with good business sense at the head of the company -- in a scenario where the family finds investors to help take RMW private again?
Hey Huge,
What do you think the prospects are for Bob and Margrit keeping their offices at the winery? Do you get the sense that the corporate side of the businesses' goal is to clear out all the family members...or do you think it was strictly an issue with Michael and Tim?
Post a Comment
<< Home