by Ian Hamilton
“Have you talked to any more customers over the past twenty hours?”
“That’s all we’ve been doing,” Gillian said.
“And what kind of reaction are you getting?”
“The smaller and more regional the customer, the more loyal they are.”
“I guess that was to be expected,” Ava said.
“What are we going to do?” Clark said, his voice hoarse. “It can’t continue like this.”
“It isn’t going to. Is it fair to say that they’ve made good on their threats and they can’t cause much more immediate damage?”
“The damage so far is bad enough,” Clark said.
“I’m not downplaying the severity of this,” Ava said. “I’m just pointing out that they’ve done just about everything to us they can. They’ve effectively shut us out of every major account in Europe and North America, and they’ve scared some of our biggest Asian customers away. What’s left? Kicking us out of some small accounts here and there? I don’t think they’ll bother. I imagine they’re feeling very satisfied with themselves.”
“I don’t understand your point,” Clark said.
“We don’t have that much left to lose. If we did, our response to their actions might be tempered by the fact that we’d want to hang on to whatever we still had. I don’t feel any restraint in that regard. In fact, I don’t feel any restraint at all,” Ava said. “I want to go after them full bore. I want to hurt them the way they hurt us —financially and in reputation. I want to hurt them so badly that they’ll beg us to stop. And when they do, they’re going to have to apologize to Clark and call all those major accounts and set things right.”
Ava hadn’t raised her voice as she spoke. She was calm and measured, her eyes focused in turn on everyone sitting at the table. May nodded when she finished and then glanced at Amanda, who was smiling at Chi-Tze. Gillian looked confused. Clark’s eyes were closed and his head was bent.
“How is any of that even remotely possible?” Gillian said. “They’re a fifteen-billion-dollar-a-year conglomerate. What could we possibly do to cause them harm?”
“Gillian, if Ava says we can hurt them, then you’d better believe she has a plan for doing exactly that,” Amanda said.
Ava opened her notebook and turned to Gillian and Clark. “You have to stop thinking about VLG as a fifteen-billion-dollar-a-year corporation. It isn’t one large monolith. It’s constructed from a great many parts. There are at least six brands that we can multiply by four or five major product categories and then another two or three sub-categories, and then multiply each of them by market segments. When you work through those numbers, you’re left with a whole bunch of small entities that you can attack individually. Our first job is to identify them.”
“Attack them how?” Gillian said.
“One step at a time,” Ava said. “Let’s start by identifying who we’re really dealing with, where they are, and how they operate. If we can do that, then I promise you we’ll find the means to attack them.”
“What do you mean by ‘identify’?” Chi-Tze asked.
“We need to do research on VLG,” Ava said, ripping sheets of paper from the back of her notebook. “Here are lists that I’ve made. They identify every major brand that VLG owns, and as many sub-brands and products as I could find. I’m sure you’ll find more. The more details you can unearth, the easier it will be to go after them.”
“What kind of details do we look for?” Gillian asked.
“The first priority is to find out what they’re selling and to whom and where. That includes everything, from clothing to liquor to perfume.”
“That’s a lot,” Gillian said.
“There are the three of you and Clark. If you divide up the work by brand or market or product or whatever you think makes sense, it shouldn’t be that hard to get some data pulled together in a few days,” Ava said as she passed the lists to them. “I apologize that these notes are handwritten, but they will give you a bit of a head start.
“Even more important, we need to know what products they’re getting made in Asia, especially in China, and that includes Hong Kong. Who are they selling to in these markets? Who are they buying from? During our conversations with Pandolfo and Ventola, they mentioned that Asia is becoming an increasingly important supplier of goods to them. They weren’t specific, but the implication was that it isn’t only raw material. Some products are made here or, more likely, product components might be made here. In either case, it is absolutely essential that we know who their suppliers are, for both raw materials and finished goods.”
“What about the logistical side?” Amanda asked. “It would be really useful to know how their distribution chain operates.”
“That’s the next thing on my list,” Ava said with a smile. “That’s going to be a job for May and our friend Suki Chan. We haven’t discussed it with Suki yet, but I don’t imagine she’ll be reluctant to help. What do you think, May?”
“I’ll be happy to do it, and so will Suki. Between us there isn’t much we don’t know about distribution in this country, and there aren’t many contacts we don’t have.”
“You’ll need to feed what you’re discovering to the girls and Clark.”
“And vice versa.”
“One of you should be the research coordinator for your group. Someone needs to divide the work among you and pass the results along to me and May in a fairly organized way.”
“I think that should be Gillian,” Amanda said.
“I’m okay with that,” Gillian said.
“May will be the point of contact for the logistical team,” Ava said.
“That’s fine,” May said.
“And in case anyone is wondering what I’ll be doing,” Ava said, “I’ll put together everything you’re gathering and create a plan of execution.”
“I know you said we shouldn’t leap ahead,” Gillian said, “but even if we know what they’re buying and selling and transporting, what can we do about it?”
“We have friends who can cause things to happen,” Ava said. “They’re here in Shanghai and in Hong Kong, Guangzhou, and other places all over Asia. I’m going to meet with one tonight and we’ll start the process of getting organized to act. There isn’t much more I want to say about that right now.”
“Gillian,” May said, “Amanda and I have worked with Ava in the past on situations that were almost as difficult as this. When she says that things will happen, you can believe her.”
“I want to get started,” Clark said abruptly.
“I’ve made a dinner reservation for us all at the Mercato restaurant,” May said.
“I want to get started now,” he said.
“Does everyone else feel the same way?” May asked. They nodded. “Then I’ll cancel the reservation.”
“I do love your attitude,” Ava said. Then she looked at her phone. It was buzzing, and a number that was vaguely familiar appeared on the screen. “Ava Lee,” she said.
“This is Raffi Pandolfo.”
“I’m very surprised to hear from you.”
“I’m calling to tell you that I regret everything that’s happened over the past forty-eight hours. It was unfortunate that you made it unavoidable.”
“Your regrets don’t help us very much.”
“I know, but it’s my way of reaching out and perhaps keeping the door even slightly ajar,” he said. “Dom can be mercurial, and when he loses his temper he takes no half-measures. He always goes for the jugular. That isn’t my style. I don’t always approve of the way he behaves, but I can never prevent it.”
“But neither he nor you will be making an effort to repair the damage that has been done, will you.”
“No, that won’t happen.”
“How is your French, Mr. Pandolfo?”
“It’s passable.”
“My mentor, a man I called Uncle, used a phrase in Chinese that I discovered he’d borrowed from a French aphorism. It goes: Cet animal est si féroce.
Quand on l’attaque, il se défend.”
“That animal is vicious. When you attack it, it defends itself?”
“Exactly. We’ve been attacked, and now you’re going to find out just how viciously we defend ourselves.”
( 18 )
May and Ava sat at a table near the fireplace in the Compass Bar, which was on the Peninsula’s ground floor. May sipped her second martini while Ava worked on her second glass of Pinot Grigio. Amanda had left with the rest of the team half an hour before to go to the sample factory. They were full of enthusiasm. Ava’s conversation with Raffi Pandolfo had added to their sense that all was not lost.
“How do you think it went?” Ava asked.
“You gave them hope.”
“If we all dig deep and come up with enough useful information, we’ll have more than hope.”
“Do you really believe we can make an impact on VLG’s operations?”
“I do.”
“I assume we’re going to try to disrupt everything they’re doing in this market in terms of imports, export, and distribution.”
“We are.”
“It isn’t going to be easy.”
“I know. I’m going to ask Xu for some favours and get favours from anyone else who I think can help.”
“Does Xu know you’re in Shanghai?”
“Yes, I sent him my flight schedule before I left. I texted a half-hour ago, telling him we need to get together tonight. He’s in a meeting and said he’d call me as soon as he’s free.”
“Does he have any idea why you want to see him?”
“Not a clue.”
“You seem confident he’ll do what you want.”
“I think all I have to do is ask,” she said. “You know the favours I’ve done for him.”
“What a couple you two are.”
“We’re not a couple,” Ava said. “We’re friends. Like me and you. My relationship with him is something close to what I had with Uncle. There’s a deep attachment, a lot of trust, and not many boundaries when it comes to give-and-take.”
“My problem is that I think of Xu in another way,” May said, looking carefully at Ava for her reaction.
“May, please.”
“Nothing’s happened.”
“I hope not.”
“We need to talk about this at some point.”
“Maybe we do, but not now. I can’t handle it.”
“I can wait,” May said.
“Thank you.”
May looked at her watch. “I should call Suki. We’re going to need her help, and I have to get her briefed and started.”
“Do you think she can find out what we want to know?”
“I’d be surprised if she can’t.”
“And how about her contacts with the customs department?”
“They’re solid, but it still won’t be as easy as you think.”
“I’m not taking anything for granted, but with a bit of money placed in the right hands, some favours exchanged, and guanxi, we should be able to get some information.”
“Guanxi will probably work best.”
“Still, tell Suki that obviously we’ll reimburse her for whatever she has to pay out.”
“She’ll expect that,” May said, and then stood up. “Okay, I’d better go. One more drink and I won’t be fit to talk to anyone, let alone someone as sharp as Suki.”
“Breakfast?”
“Sure. How about nine o’clock in the Lobby Lounge?”
“That’s perfect. Good luck with Suki,” Ava said, getting up. The two women hugged.
“Say hello to Xu for me,” May said.
Ava smiled but didn’t respond. As she watched May leave the bar she thought, There’s not a chance I’ll do that. What I have to do is keep the two of you apart. She felt a twinge of guilt and then pushed it aside. Nothing messed up friendships more quickly and more permanently than sex. If Xu and May ever connected and it didn’t work, Ava knew she’d be caught somewhere in the middle, trying to juggle her relationship with each of them. That was the last thing she wanted. As selfish as it was, she liked the way things were and didn’t want them to change.
She sat down again and contemplated another drink, but she knew that more wine would only hasten jet lag and the need to sleep. She picked up her phone and called Xu. If he couldn’t see her in the next few hours, it might have to wait a day.
“Hi. Welcome back,” he said after one ring, the sound of traffic in the background.
“Hey, I’m at the Peninsula. Do you have any idea when we can meet?”
“I was going to call you when I got a bit closer to Shanghai. I’m on my way back from our new factory, about half an hour away. Do you want me to pick you up or do you want to meet me at the house?”
Ava smiled at his assumption that they would meet at his house in the French Concession. It had become her second home in Shanghai. “Pick me up, please.”
“Have you had dinner?”
“No. We were supposed to eat at Mercato but decided not to.”
“Me neither. I’ll tell Auntie Grace to prepare some noodles.”
“And dou miao if she can.”
“She always can, and it’ll make her happy to know you asked for it.”
“See you in half an hour. I’ll wait near the entrance.”
Ava settled the bar tab and went up to her room. She turned on her computer, did a quick check of her emails, and then sent one to her mother saying she’d arrived safely. There was nothing from Maria.
She went to the bathroom, freshened up, and went downstairs to meet Xu.
Suen, a mountain of a man who was Xu’s Red Pole —his enforcer —leapt out of the front passenger seat to open the back door of the silver Mercedes S-Class sedan. Xu stepped out and grinned at Ava.
“Mei mei,” he said.
Ava had been uncomfortable when Xu started calling her mei mei. Now it was as natural as his using her given name.
Xu was a lean six feet with a full head of slicked-back hair and a handsome, chiselled face. The last time she’d seen him, he’d been under tremendous stress and his manner and movements were stiff and forced. Now he seemed completely relaxed. The grin was one indication. Another was that the thin black tie he always wore with a black suit and white shirt was loose, and the top button of his crisp white shirt was undone. For Xu that was being casual.
He held out his hands. When she grasped them, he bent over to kiss her on the forehead. “I don’t know why you’re here, but I’m very happy to see you.”
“It’s business trouble that brings me,” she said.
“I thought it would be business. I’m sorry it’s trouble,” he said. “We can talk in the car.”
“I’d rather wait until we’re at the house.”
“That’s fine too.” He stood to one side so she could slide into the back seat.
As the car pulled away from the hotel, he said, “When I told Auntie Grace you’re going to have dinner at the house, she asked why you aren’t staying with us.”
“May and Amanda are at the hotel. We need to stay in contact and it’s easier that way.”
“Of course it is.”
Auntie Grace had been Xu’s nanny and was now his housekeeper. She was the most constant presence in his life, and there wasn’t much she didn’t know or had heard or seen. She and Ava had become friends and confidantes.
“I hope Auntie isn’t upset about that.”
“I don’t think it’s possible for you to offend her. You lead a life that might have been hers if she’d had the opportunity. She lives vicariously through you.”
“And I think she’s amazing.”
“You both are, and that makes me a lucky man.”
“What is the lucky man doing opening a new factory?” Ava asked. “Have things calmed down with the provincial authorities?”
“There’s a new governor and a new provincial secretary. They approached me with a request to provide employment in a town about forty kilometres from
here. I’m doing what I can to help.”
“Are you paying them off?”
“Not yet. After the Tsai family debacle, everyone is sensitive to the fact that Beijing has many eyes fixed on Jiangsu. It’s too soon for the new players to start accumulating wealth. That will probably change in a year or two, but right now I’m getting a free ride.”
“What’s happened to the Tsais?” Ava said, referring to the family that had run Jiangsu province politically for many years, until a corruption scandal brought them down.
“The governor and his cousin are serving ten-year jail terms. The governor’s sister lost her gold-trading business. About ten billion in other assets was seized.”
“I’m guessing they’re still not poverty-stricken.”
“They were left with enough to get by on,” Xu said, and smiled.
“So what’s this new factory making?”
“Something I wish I had discovered years ago,” he said. “We’re now in the perfume business.”
“Counterfeit?”
“Of course.”
“Which brand?”
“Several.”
“How complicated is the process?”
“It isn’t. The perfumes are all made primarily from distilled water and alcohol. The only difference among them is the aromatics that create the scent. We hired a young couple from France who are science grads with five years’ experience working in the labs of two of the biggest European perfume manufacturers. There aren’t many scents they can’t match.”
“What are the profit margins like?”
Xu glanced at her. “You normally have no interest in our knockoff businesses. What’s so different about perfume?”
“Humour me.”
He shrugged. “The margins are terrific. It costs about sixty U.S. cents an ounce to make a perfume that sells for sixty to eighty dollars. The most expensive and difficult job is getting the bottles made. After a lot of trial and error we finally found a glassmaker in Pudong who has a knack for it. He’s expensive —we pay between three and five dollars for a three-and-a-half-ounce bottle —but I would defy anyone to tell the difference between his copies and the originals.”
“How big is the market?”
“We expect we’ll do about a hundred million dollars in sales over the next twelve months, mainly in Europe and Asia. That doesn’t even begin to make a dent in a market that’s worth more than thirty billion dollars worldwide.”