Andrew Tobias - Demystifying Finance

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FIRE AND ICE
The Story of Charles Revson - the Man Who Built the Revlon Empire.

Chapter 17

Empire Building

"In negotiations with us he couldn't have been more of a gentleman. As for working for him -- I think I'd rather clean streets."

-- A former Revlon acquiree

The standard ways to build a business into an empire are to acquire other companies and to set up operations abroad. Revson did both. Armed with a high multiple of earnings and the conviction that he could run any business there was, he acquired more than a score of them. And believing that "if it's good enough for America, it's good enough for Japan," he launched operations in ninety-seven countries.

His first major acquisition came as the result of an office-warming he and Martin attended in the fall of 1957 at the new digs of one of Revlon's smaller ad agencies. The agency had thought to invite all its clients to one big party, but remembering the last such affair, when Barney Pressman (of Barney's, a huge men's clothing store) had grabbed Emanuel Ronzoni ("sono buoni") by his unfashionable lapel and jokingly called him "an old spaghetti bender" -- a joke that had somehow come off flat -- they had decided to hold a series of small luncheons instead. This turned out to be not such a great idea, either.

At lunch with the Revsons were Sam and Al Abrams, founder/owners of Knomark, Inc., which made Esquire shoe polish. Charles quickly assessed their business and told them they should be selling their shoe polish for fifty cents, not fifteen, the same way he had entered the nail polish market. Three weeks later, to the dismay of the ad agency -- which suddenly found an even larger proportion of its business subject to the whim of Charles Revson -- Revlon bought Knomark. (One can just hear the boys clustered around the Dow Jones ticker: "Nail polish . . . shoe polish . . . it's a fit!") With some $15 million in sales, it was Revlon's first major acquisition. Supposedly, one of Revson's first questions upon buying the business was "How long have you had your agency?" From the beginning, they said. Eighteen years. "That's much too long," Revson said. Before too long the agency found itself with neither account.

Revson put Irving Bottner, his treasurer/ controller, in charge of Esquire. (That's Bottner -- Botwin you've already met.) The Abrams brothers, despite huge salaries, soon quit. It was the basic acquisition syndrome: You buy a small company that depends on the energy and expertise of a couple of highly motivated people. You make them millionaires, which kills much of their motivation. And you meddle in their business, which drives them up a wall -- or out the door.

What Irving Bottner wanted to do, in accordance with Revson's vision, was "to take shoe polish out of the kitchen and put it in the bedroom." Make it a class product, in other words, just as Revson had done with nail enamel. Change its image and double its price. However, this proved difficult. It was hard to sell a sexy, romantic, glamorous shoe polish.

Lady Color was introduced in the hope that women would paint their shoes to match their attire. Instant Patent Leather and an application that made leather look like alligator skin were also introduced. But none of these products revolutionized the instep.

Estimates of Revlon's lack of success with Esquire vary, but it was enough that Revson decided eventually to get rid of the business. As he told Forbes in May 1969, several months after disposing of it and a couple of other acquisitions: "We've had it . . . We're not running a hospital [for ailing businesses] here." He had bought Knomark for $6 million-plus, and hoped his financial people could recoup the investment. To do so, they prevailed on him to pick up yet another product -- Ty-D-Bol -- to make a more attractive package. Needless to say, it pained Charles to spend a million dollars to enter the toilet cleanser business, but he went along. The package went for $12 million in cash -- much more than he had expected.

Bill Mandel says there was no reason to get rid of Esquire. "It could have been built," he says. He assesses Charles's motivation as "trying to screw" his then president "and make him look dumb."

Looking not at all dumb, but perhaps relieved to be out of Revlon, that former president says Revson wanted to ditch Esquire because he had failed to turn it into a class operation. Shoe polish was still under the bathroom sink where it had always been. "Charles was never confused by dollar profits," this man explains, "although he was certainly aware of them. You may have heard him say that one of the greatest mistakes of his life was The $64,000 Question, because it directed his business away from where he wanted it to be -- away from Bonwits and into Walgreens. He would rather have been the most important supplier to Saks than to Safeway. You are dealing with the basic ego and philosophy of the man: he would rather have owned Pavillon, and served fifty customers a night, than McDonald's, serving millions."

It may have been more trouble than it was worth, but Esquire was by no means a disaster. Evan-Picone, a sportswear manufacturer, was. Acquired in 1962 for $12 million as it rode the crest of popularity for its women's slacks, it was sold back to one of the original partners (Picone) for $1 million four years later. The $11 million difference, plus operating losses along the way, retarded Revlon's growth. Women who felt they "had" to have the latest Revlon lipstick did not feel the same about Evan-Picone's fashions. Even Revson, had he devoted his full attention to this business, might not have been able to make every season click. He foresaw the sportswear boom, but was wrong to think he could capitalize on it with Evan-Picone. "This will be my first failure," he said when he agreed to take his losses and get out.

Then there was an importer of silk dresses, a plastic molder, a large investment in Schick shavers, an artificial flower importer -- and others, most of which proved that businessmen should stick to the businesses they know best.

It has been said of William Paley's disastrous acquisitions at CBS that broadcasting is such a lucrative business his mistakes were smothered in profits. Much the same was true of Revson's acquisitions and the cosmetics industry. It is the seller, not the buyer, who generally holds most of the cards in this game. He knows exactly what he's selling and is not likely to undervalue it. Revson paid very full prices for his acquisitions. He was not bargain hunting; he wanted businesses that returned at least 16 percent pretax profit on each dollar of sales -- businesses with margins like his own. Financial pros look at return on investment, not sales, but Charles was a merchant by instinct and a financial man only by the accident of his success.

Where he did shine was in his determination to buy U.S. Vitamin and Pharmaceuticals Corporation, in 1966. Attracted by the profit margins and by his own hypochondria, he had long been after a drug company. He had found the industry closed to him, however, not least because of his religion. U.S. Vitamin was one of the few Jewish drug companies around -- and even at that he had to pay $67 million for a lackluster company with a mere $20 million in sales. But pay it he did, and in nine years U.S.V. grew nearly tenfold.

The big break came in 1971, when Ciba-Geigy, the multi-billion-dollar Swiss pharmaceutical combine, was being forced by antitrust regulators to dispose of a grab bag of products. U.S.V., by contrast, had most of its chips riding on a single oral antidiabetic drug, DBI. Although DBI was doing very well, there was always the fear that it could be made obsolete, or that it could prove to have harmful side effects. U.S.V. hit on the idea of trading DBI for the Ciba-Geigy products. A startling idea at first -- it meant disposing of the major portion of U.S.V.'s business -- but a good one whose advantages Charles quickly grasped.

Just as negotiations were being concluded, a comprehensive study was published that cast doubt on the life-lengthening properties of DBI. It suggested that DBI might actually have life-shortening effects, instead. Suddenly the deal was almost dead. At the very least, Ciba wanted a lot more cash along with DBI than had been originally proposed.

Charles was reached in London and asked if he wouldn't lend his weight to concluding the negotiations. So he and Lyn, a product manager assigned to carry Lyn's jewels, Revlon's general counsel, and a team of U.S.V. executives all hot-footed it to Basel, Switzerland.

Charles was enormously impressed by the Ciba operation. A thousand marketing people! Scientists all over the place! It made his pride and joy in the Bronx look awfully modest. As the Revlon/U.S.V. forces were huddling on the way into the negotiations, he told them: "This is a fucking white shoe operation." Pardon? "A fucking white shoe operation," he repeated, as though that would make his meaning clear, "so I don't want any swearing or shouting in there. I don't want these guys to think we're a bunch of bums." He assigned the head of U.S.V. to be the group spokesman and asked how much the deal was worth. "Well, we've gone up to ten million dollars so far," came the reply; "I think we could go to twenty million, but I wouldn't go any higher than that." "Okay," Charles said, "let's go."

In the conference room a team of Giba professionals proceeded to assault the blackboard with numbers, relative values, best- and worst-case growth projections, probabilities, present values, cash flows . . . they're drawing analogies with Brazilian growth rates . . . From their point of view, a couple hours of analysis is not unreasonable when millions of dollars are up for grabs.

Charles, on the other hand, is sinking deeper and deeper into his chair. He is not used to sitting silently while someone else lectures. His hemorrhoids are bothering him. There is a draft in the room. Lyn is back at the hotel. Basel is not the kind of city you want to stay in, if you are a jet-setter, any longer than you have to. Finally, he can restrain himself no longer. He flings his arms out, Christ-like, and says -- "Fuck! How much do you guys want for this fucking deal?"

The Ciba spokesman, startled, fumbled about for a few moments and said, "Twenty million dollars."

"Done," says Revson, who gets up, shakes hands, and walks out.

Revlon's overseas distribution was first handled by the United States Government. During World War II, post exchanges all over the world carried Revlon products. At least one GI would give his local ladies Revlon lipstick cases, promising the lipstick itself if the relationship . . . matured. Thus the gospel spread. American cosmetics -- many of them Revlon's -- became the envy of the rest of the world. As Inez Robb wrote in a syndicated column (March 15, 1952) -- that Carl Erbe, Revlon's brilliant, roughhewn publicist, no doubt planted: "What Scotland is to tweeds and tipple, Ireland to linen and blarney, France to perfumes and Switzerland to cheese and chimes: that is what America is to cosmetics in the eyes of the world and his wife, particularly the little woman." ("The little woman" -- how times have changed!) She went on to say that "only a few months ago Revlon received a letter from Prague from a woman who enclosed a big, old-fashioned dollar bill. She explained that it had been left to her by her father, and would Revlon send her a shade of lipstick, which, incidentally, the factory had ceased to make years ago." Not to mention a request from Agah Aksel, Turkish minister to Budapest, who ordered "six pieces of lipstick and six pieces of nail lacquer to match," or requests from Ethiopia, Patagonia . . .

Beyond the PXs, however, sales abroad were slight. Revlon had operations only in Mexico and England at first, and in other areas merely exported goods to distributors over whom it exercised little or no control. Bill Heller was put in charge of selling Revlon to the world in 1960, but at the time of his death, in 1962, the world had yet to catch fire. Foreign sales were then running around $20 million. A dozen years later, they would be ten times as great.

The international division, after Heller, went to Robert Armstrong. Later, in keeping with Charles's management style, Armstrong was given Sam Kalish as his second-in-command. Where Armstrong was a tall, Gentile, easygoing diplomat, Kalish was the typical Revlon killer. They were like a nice-guy/tough-guy team of cops, only they weren't just playacting to get a suspect to talk. They hated each other. Kalish reported directly to Armstrong, who theoretically could have fired him. But he also reported, unofficially, to Charles, so Armstrong was stuck with him.

Except for translating ad copy, it was Revson's idea to sell abroad exactly as he was selling at home. American cosmetics, like American denims and soft drinks, were in great demand. Eventually, he came to allow each foreign subsidiary enough independence to adapt their marketing to their market. But to a large extent, what worked in the U.S. was equally successful abroad. One much noted TV commercial, for example, included in its sixty-second message a silent, forty-seven-second kiss. The ad was for Intimate perfume, the message universal.

Still, each country had its quirks. The Spanish would not allow such a kiss to violate the pureness of their airwaves. In Italy, at least in 1960, commercials had to run two minutes -- but only twenty seconds of that time could be devoted to "the sell." The rest had to be entertainment of some kind. In Venezuela, the announcer had to be a Venezuelan national, which meant re-recording everything. In Germany, it would have been inappropriate to call Revlon's men's fragrance "Pub," because it was too close to the German slang for "fart."

In Mexico, the 64,000 peso show went off without a hitch. But in England, in accordance with a parliamentary white paper governing commercial TV, Revlon could only sponsor -- not own -- The 64,000 Shilling Show. Moreover, the order of appearance of commercials had to be determined by lot. Revlon could not even be sure of appearing first. Martin flew over to watch the debut, broadcast live from the Palladium. Sitting with Lew Grade on his left and Armstrong on his right, Martin saw, at the first commercial break, an ad for Max Factor. "Livid" would hardly have described his reaction. As Armstrong recalls the exchange:

"I don't understand this," Martin spluttered.

"Martin, the white paper . . ." Armstrong began.

"Screw the white paper," Martin said.

". . . from Parliament . . ." Armstrong offered weakly.

"Look, there's a way to do everything. Put the fix in if you have to," Martin said.

"Put the fix in -- to Parliament? Sir Lew asked.

"Well, you've got to do something," Martin said.

It was one of the few times Max Factor outfoxed Revlon. Years later, Factor went to great expense to co-host the Versailles Ball in Paris -- but Revlon stole the show with free gift packages at every table. The industry tittered for months. When Revlon went into Japan, the largest cosmetics market in the world after the U.S., Revson decided to stick not only with his western products, but with his western ads, western product names, and western models. Only the ad copy was translated. Factor, already well established in Japan, quickly countered with a "Japanese cosmetics for Japanese women" campaign -- but Revlon sales took off. Eventually, Factor had to switch to the same Americanized strategy.

Revlon's success in Japan was doubly remarkable -- exactly double -- by virtue of the fact that the operation was 100 percent Revlon-owned. From 1950 to 1967 there was a rule that American companies had to obtain Japanese partners if they wished to set up shop. Revson had been planning to go fifty-fifty with a wealthy Japanese named Takara, who flew all the way from Tokyo to strike the deal. When he and his interpreter arrived in Revson's office, Sid Stricker introduced them and briefly reviewed the purpose of the meeting. Revson asked to be excused a moment. Stricker was then asked to step outside, too. "Get rid of that Chinaman," Revson told him. But why, Charles? "I don't like his gold tooth." Stricker spent the weekend showing Takara around New York and then bid him farewell.

If there was more to Revson's ditching Takara than his gold tooth, it was not that he had figured some brilliant way to go it alone in Japan. This was the achievement of some of his brash and resourceful lieutenants. "We just went ahead and did it," one of them explains. "No one stopped us."

(Similarly in 1944, when shipments to Italy were nearly impossible, one of the play-it-by-ear Revlon types contrived to ship merchandise through the Vatican. He had a Yiddishe kopf and Catholic connections.)

Charles visited the fledgling Japanese operation in 1962 with Ruth Harvey, Bill Heller, George Beck, and his two boys. The trip included a ride up into the provinces in a private railroad car, complete with geisha girls. Revson was quick to grasp that the geishas were among the country's most avid and affluent cosmetics buyers, and fashion-setters to boot. Accordingly, he spent considerable time studying them and urged his marketing people to do likewise.

Sailing from Capri to the Holy Land aboard his 257-foot yacht, with thirty-one in help and cases of Dom Perignon in the hold, finding his products regally displayed in every port along the way, and telephoning instructions to his generals back in New York, Charles Revson in his later years was indeed an emperor. And self-made at that. An odd sort of emperor when you looked beneath the robes -- but what emperor wasn't?

Twice a year, beginning in the late sixties, Revlon would gather its international executives for a three- or four-day dog and pony show. One of the meetings was generally scheduled during Revson's annual month-long Mediterranean cruise, in the fervent hope that he would not break up his vacation to attend. He invariably did.

It wasn't that he lacked valuable experience to impart to the international staff, it was just the way he imparted it. The executives from New York who were used to him could ignore the profanity, follow the analogies and endure the digressions. Not so the hundred-odd international managers, sales managers, and chief beauty consultants. It was like listening to a verbal Jackson Pollack.

Charles would sit with a box of Kleenex beside him, periodically clearing his throat; push his glasses up onto his head and rest his elbows on the table, supporting his temples with the heels of his palms; look out over his audience of stuffy Englishmen, genteel Frenchmen, stilted Germans, exceedingly well-mannered Latin Americans and Japanese -- well, any American entrepreneur would likely come off as something of a cowboy before such a group ... and he would proceed to talk. And talk. And talk. No prepared text, a few key words on a napkin. He always believed that a man who could not speak extemporaneously was not worth much. (His boyhood "ambition," as given in the yearbook, was "to be an orator.")

One talk ran five hours. During a break, Bob Armstrong and Joe Anderer pulled him off to a corner and tried to get him to tone down his language. Charles returned to the group fuming. "They tell me," he said, "that some of you are offended by my language. Well, goddamn it, this is my fucking company, and if I want to say 'fuck,' I'll say 'fuck!' Anybody object to that? . . . Nobody? . . . Good."

Says one Revlon bigwig: "These were the most rambling, unstructured, give-'em-hell, cover-the-waterfront, crude speeches you can imagine. Regardless of whether the audience was ninety percent men, entirely men, or what, it was an entirely unnecessary display of who was boss. I don't know how much damage they did, but I'm sure Bob Armstrong spent the next six months picking up the pieces." Wasn't Revson aware of the impression he was making? "Yes, I'm sure he was." Then why did he do it? "I think Charles still thought in many ways that he was just a poor boy from Manchester, dealing with polished foreign talent. He felt very much at a disadvantage and had to gain control of the situation. The only way he could do it was to shock them, to embarrass them -- to show that he was the boss and could get away with it."

But he was also trying to teach them. He once spent forty-five minutes in front of a seminar of his international marketing executives having a dialogue with a glass of water. He was trying to teach these people the meaning of product differentiation, and the water glass caught his eye. He picked it up, held it out in front of him, and said, in his friendliest way, "Hello, glass. What makes you different? You're not crystal. You're a plain glass. You're not empty, you're not full . . ." and then he began telling the glass how it could be made special . . . by changing the design, changing the color of the water, giving it a stem, and so on. Sam Kalish was so bowled over by this performance, he says, that at the end he went up to Revson and asked him to do the same thing for another group upstairs. "C'mon -- I can't do that," Revson said. They went upstairs. "You know," he began, "I was just talking with Sam Kalish and he wants me to show yon what I did downstairs, how I grabbed a glass and started talking to it, 'Hello, glass . . .' " -- and he did it all over again. Kalish acknowledges the performance was "probably over the heads of eighty percent of the people there," but he thought it was great nonetheless.

Perhaps the fundamental skill Revson tried to impart in his long-winded lectures was simplicity of thinking. "The funny part of it is that we get so smart, we get so educated, we get so intelligent, that we forget the simple things of the A, B, C, D, and E are the only ones that matter. All the rest of them just don't matter a goddamn bit," he said. Take a watch, for example. "The first thing I must understand about a watch is that it is a timepiece. Regardless of how beautiful it is, regardless of how expensive it is, that the purpose of this watch is to tell time. Is that correct? Now the minute I forget that this watch is a timepiece I'm a horse's whatever it is. Is that correct? And we get so smart, sometimes, that we want to take a watch and make it into an alarm clock. And we keep forgetting that this is only a watch. The next thing that a watch has to be after it keeps time . . . now, there's such a thing as keeping time and there's such as keeping perfect time. And there's such a thing as not winding it -- that's a great help, too. Then there's such a thing as being most beautiful -- then there's such a thing you don't have to repair it for five years. Then it is in solid gold. Then it's this and then it's that and it has a great name. That's a watch."

One reason Charles's ramblings were hard to follow was his unfamiliar use of language. Revsonisms: "Stop beating around the rosary bush." "I want it done one, two, six." "Asshole to asshole." (Like peas in a pod.) "What you guys have to do is reupholster your thinking." "Remember the dumb lady." (The typical consumer -- things must be kept simple.) "It should be at least twenty-four-karat gold." "Mediocricy." "Don't answer that -- that's a historical question." "Who hit Annie in the fanny with the flounder?" (Who started it?) "I'm the kind of a guy who burns his graves behind him." "There are lots of slips between the cups and saucers." "Five-hundred-dollar millionaires." (Little guys who thought a Rolls-Royce and $1 million made them Big Men.) "It's too Jewish." (Said of a packaging design -- too gaudy.) "Is it clearer than mud?" (Perfectly clear?) "It's as plain as the five fingers on your face." "That's not my dish of wax." "Don't make a case celerb out of it."

Norman Norman, rather than being confused or put off by Charles's endless malapropisms, says he found them "enduring." (Endearing.)

Charles was an inadvertent master of non sequitur. "If you had all the money in the world," he counseled once, "whatever it may be, you can't have it all. You can't have all the window displays and all the advertising you want, and all this and so forth. It's impossible. And so therefore, you must find out what are the most important things that you need, and what are the winning numbers. What are those numbers that pay off the best? [I.e., the most profitable marketing formula.] Is it seven? Is it eleven? Or is it three? Or whatever it may be. Because what do we want fundamentally? [Profit? Share of market?] We want the least amount of turnover as far as people is concerned . . ."

A handwritten note: "Birthdays couldn't happen to a nicer guy. So just keep on having more of the same, and the same is good enough."

After viewing the results of a decision he himself had made, he would say, "How could you let me do this to myself?"

Launching into one topic, but wanting first to cover another, he began: "Might I say before I say what I am about to say...

He would say: "The first thing is that the color must be right, and the second thing -- which is really the first thing -- the texture must be right." He tried to crowd everything up into the number-one position. Everything had to be right, so everything was number one. The idea of ranking bothered him because he didn't want to accept a lipstick, even if it had great luster, if it didn't have great wear. The two are somewhat incompatible and he had a tough time making a choice -- so he put them both first.

"The reason I am opening my talk this morning of marketing,'' he said once, about a thousand words along in his preface, "is because I think it is one of the key -- that does not mean and I don't wish to infer that operations are not important. They are. Administration is important and it is. But it does mean that you can have great administration and great operations, but if you don't have great marketing, you will not make it. You do have some chance with great marketing and mediocre administration and mediocre operations to make it, but vice versa, you will not make it . . ."

As Mandel says, he had a hard time setting priorities. Paul Woolard suggests this was also the reason for his frequent use of the phrase "in turn" -- everything relating to everything else at the same level. Others saw the "in turns" as a nervous stalling mechanism, like "uh . . ." Revlon personnel occasionally ran pools based on the number of "in turns" counted in a given speech.

Revson was not unaware that his mind worked better than his tongue. It caused him great frustration. In the midst of one of his lectures, having become hopelessly involved in -- "a round lamp with an electric light in it and I think the outside of it is chrome and you press the button and the light reflects on the base and, in turn, it reflects on her face, so that she, in turn, can then take some of the makeup off her face and, in turn . . ." . . . but trying actually to make a simple point about window displays versus counter displays (namely that women can't sample a product in the window, but they can at the counter) . . . he finally said: "Now, these things come out very childlike, and I know they do, but goddamn it, for anybody who wishes after this meeting is over, which will be on Thursday morning or Wednesday night, I will go with them into this city or any city that they want, and I will prove with the greatest conviction and positiveness that I have that that does not follow." (That what does not follow? Hello?)

Because his foibles contrasted so sharply with his position and success, they drew attention. But attention should be drawn, too, to the cold competence his success was based on. There was his much noted preoccupation with detail, but also the ability to see the big picture. He could ramble endlessly, but also cut through to the heart of a matter. He could choose an odd assortment of friends and confidants, but also frequently tell when he was being conned. The power behind this emperor's throne was his own inner strength. The brains behind his operation were, notwithstanding the hundreds of good minds in his organization, his own.

The following account shows the emperor at his efficient best; the boy from Manchester High School coping effectively, if undiplomatically, in a rarefied atmosphere.

 

Revlon's Man in Argentina

I was general manager of the branch in Argentina and he was making his first trip here, in 1971. He had been as far south as Caracas once, but he'd never been to Argentina or Brazil. He flew to Brazil, looked at Rio, looked at Sao Paulo, and then cruised to Argentina on the Ultima II just after New Year's.

Argentina is the most European of the South American countries and it's like the U.S. in both climate and habits, except that it's got the Latin temperament. We organized there in 1962 and I took over as manager in 1966.

He had been in Argentina maybe three or four days when he requested a meeting with prominent people who knew something about the Latin American common market and the general economy. The major Latin American countries years ago set up a common market to try to trade between each other, but it never really functioned because of too much acrimony and vested interest. Revson was interested because we weren't in Brazil at the time, or a lot of other countries, and he wanted to see if he could manufacture in Argentina and export from there. The company was always afraid of Latin America because of what they read in the papers . . . changes of government, devaluation of currency   . . . so they were very cautious. I set up a meeting with bankers and industrialists and a man directly involved with the Common Market. They all spoke English.

Most Argentines have one hang-up: They are sometimes irrationally proud of their country. At that time, Argentina had gone through what was for them a relatively stable period. They had a military government which came in about 1963 and the currency was reasonably stable . . . there wasn't the terrorism you read about today, Peron was still in Spain with his wife, and there really weren't any thoughts of his coming back.

We went over to the bank around noon and discussed the economy of Argentina, the common market, and so on, and these people kept going back to one point.' "If you want to invest in Latin America, the only place to put it is in Argentina. The currency is stable, the government is stable, even though it is a military government . . . The guys in Brazil haven't come down from the trees yet and the Chileans have got a Communist government coming in . . ." They were giving him half a story, not the true story. Finally they came down to this: "Charles, as long as the generals run the country we will never have any trouble. This is really the only place to go."

Up to that point he had just asked a few general questions, and I thought these people were giving him a snow job. And with two questions he just tore the meeting apart. His first was: "What happens when the colonels get pissed off at the generals?" That's how he put it. I had to translate it for them because they didn't understand what he had asked. They turned around in surprise and said: "Charles, this has never happened in Argentina. The generals run the army and the army runs the country."

His next question was: "Peron was a colonel, wasn't he?"

This floored them because Peron was a colonel when he took over in the forties. But if you walked down the street in Buenos Aires and asked them, seven out of ten Argentines would get it wrong. But Charles knew. It totally tore apart their arguments and made them seem ridiculous. He got up and said: "Thank you, gentlemen. I have another engagement." They just sat there with sort of shock on their faces and then had to get up and smile and say good-bye.

After the meeting, all Charles said was, "I don't think I got a lot out of that meeting." He saw through these men.

The next evening, the president of the Argentine Yacht Club and his wife came on board for dinner and a movie. A pleasant elderly couple who had done a lot for Charles because they were so impressed with the size of his yacht. This was strictly a social occasion. As they were leaving the boat, just out of earshot, Charles turns to me and says, "How much would you spend against that woman?" I said, "What do you mean?" He said "I wouldn't spend a nickel against her promotionally." I said, "Charles, she's from a very wealthy family. Her husband is president of the yacht club, which is no small thing in Argentina." And he said, "She hasn't changed her lipstick shade in twenty years." She was well dressed, but he could pick that out in a person. She was not fashion conscious. And he proceeded to lecture me on the importance of spending your promotional dollars against those consumers who will buy.

When we launched Ultima in Argentina, at three times the U.S. price (because of a 200 percent customs duty), women in very humble dwellings were buying it. It had nothing to do with high society. He knew what he was talking about.

***

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