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CH74 | DI
🕑 Added 2025-04-09 02:28:18 +0000 UTCPierce couldn’t respond immediately.
How could he let me speak freely in front of the CEO when even I didn’t know what I would say?
He likely wanted to refuse outright.
However, it wasn’t easy for him to reject my request outright either.
According to the rules Pierce himself had established, if a client pointed to me, I had the right to speak.
I had adhered to those conditions perfectly.
“Wouldn’t it be fine to hear him out? After all, the kid has probably done some related research,”
Whitmer prodded, and Pierce reluctantly gestured toward me.
The motion indicated I should step into the center of the conference room, not stand behind him.
I moved as instructed.
After briefly glancing at the two of them, I opened my mouth.
“First, I’d like to ask for your understanding as my tone tends to be quite direct. If I say anything inappropriate, please regard it as the mistake of an inexperienced newcomer. Additionally, I’d like to make it clear that my opinion does not reflect Goldman’s official position.”
I started with a disclaimer.
Then I went straight to the point.
“It would be best to sell Harbor Lobster as soon as possible.”
“And why do you think that?”
“Just a few days ago, I visited one of their stores and noticed a high proportion of African-American customers.”
A cold air filled the conference room.
Race-related issues always felt this way.
Pierce, a white MD, looked visibly uncomfortable.
Discussing race unexpectedly in front of a Black CEO was a surefire way to find oneself on the hot seat.
Nevertheless, I continued without hesitation.
“Unfortunately, African-American customers do not bring immediate profitability. Since corporations are profit-driven entities, it’s prudent to shut down unprofitable businesses. From this perspective, a swift sale is the best course of action…”
“What nonsense are you spouting!”
Pierce yelled, cutting me off abruptly. Then, hastily turning to Whitmer, he apologized profusely.
“I’m terribly sorry. This guy has serious communication issues and frequently misspeaks. My sincerest apologies for this great offense.”
“Haha, I was informed beforehand that he was blunt… but this exceeds my expectations.”
Pierce froze mid-apology.
Whitmer’s reaction was surprising.
Though he seemed a bit taken aback, he didn’t appear overtly displeased.
“A bit shocking, but it’s fine. Actually, it’s refreshing.”
Whitmer graciously accepted Pierce’s apology and turned his gaze back to me.
With a warm smile, he posed a question.
“An interesting assertion, but the claim that African-American customers lack purchasing power is merely a prejudice. Do you have any evidence to support it?”
He wanted me to elaborate.
This reaction confirmed that my assumption was correct.
“Of course. As an analyst, I’ll speak objectively with data. May I show you some materials?”
Upon my request, Pierce hesitated briefly before nodding.
I promptly approached the two of them and flipped through the booklet to the necessary page.
It was data I had included in the appendix yesterday.
“This is the 2014 Consumer Expenditure Report published by the Bureau of Labor Statistics. Please focus on the graph at the bottom.”
The graph displayed trends in dining expenditure categorized by race.
While White and Asian expenditures had increased by 3.8% and 3.1%, respectively, compared to the previous year, African-American spending had decreased by 2.7%.
“Since the financial crisis, all racial groups have tightened their belts. However, two years ago, spending trends began to diverge. While other groups have started to open their wallets, African-Americans alone have failed to reverse the negative growth trend.”
“……”
“This is why Harbor Lobster struggles more than its competitors. Their customer base has a disproportionately high percentage of African-American patrons. Moreover, this trend is unlikely to reverse easily. Please refer to the articles at the bottom of this page.”
I directed them to the footnotes at the bottom of the page.
There, I had listed headlines from pre-selected articles:
—The Impact of the Financial Crisis, Concentrated on African-Americans…
—Evidence of Discriminatory Mortgage Practices by Banks…
—Subprime Mortgage Fallout: The Decline of Black Consumer Spending – Why?
“It’s already well-known that during the financial crisis, numerous financial institutions targeted African-Americans with unfavorable loan conditions. High-risk products were forced upon them, even those with good credit.”
Though it seemed tangential, it was intrinsically connected to the issue at hand.
“Current investigations into the scale of asset losses among African-Americans reveal shocking figures. About 30% faced foreclosure, and on average, they lost nearly half their assets. In contrast, Whites suffered losses of only about 10%.”
The group that bore the brunt of the financial crisis?
It was African-Americans.
They also happened to be Harbor Lobster’s primary customers.
“This is the root cause of the deteriorating performance. It’s not a temporary issue caused by market fluctuations or an economic downturn. It’s a structural problem.”
After all, what good is economic recovery and job growth?
When your house is gone, who would feel like dining out on lobster?
“This isn’t merely a psychological retreat. It will take at least 3-5 years to recover. For a brand facing prolonged stagnation, swift liquidation is the best course.”
“… …”
Pierce fell into deep thought.
While he acknowledged the validity of my analysis, he still seemed doubtful about something.
“Even if what you’re saying is true, it doesn’t mean we need to sell within the next couple of months.”
His skepticism wasn’t directed at my analysis itself.
Rather, it was a question of whether such reasoning sufficed to explain the CEO’s frantic actions.
Whitmer was pushing to sell the company’s flagship brand at a bargain price—almost like a “buy one, get one free” deal.
Even at the risk of his own dismissal.
Such hasty decisions didn’t align with the structural issues at hand.
Pierce’s gaze briefly flicked to Whitmer before returning to me.
What followed was a thinly veiled piece of advice for Whitmer.
“Even if we must sell due to the customer demographic, there’s no need to rush. Next year or the year after would allow for a safer process.”
In other words, Pierce agreed that Harbor Lobster was a ticking time bomb, but he questioned whether the timer was truly running out.
“If we proceed with an abrupt sale now, we’ll be forcing it through the board’s authority without consulting the shareholders. Even a token effort to engage in dialogue would help mitigate backlash.”
“Dialogue… What exactly would you say to persuade them? That it’s because Black customers aren’t profitable?”
“……”
“This sale must conceal its true reasons.”
Indeed, the real reason behind Harbor Lobster’s sale was too sensitive to publicize.
Race had always been a delicate topic, and to blatantly abandon the financial crisis’s most vulnerable group?
That would invite a torrent of public outrage.
“Temporary criticism can be weathered. People tend to forget quickly.”
“Under normal circumstances, perhaps. But these are not normal times.”
I paused briefly to steady my voice, then met Pierce’s eyes directly.
“Have you heard of the Black Lives Matter movement?”
Black Lives Matter.
A slogan encapsulating the value of Black lives and a rallying cry for the Black civil rights movement.
Abbreviated as BLM, this movement would soon resonate globally, sparking immense social impact.
The catalyst? A tragedy from just last year.
A White police officer had fatally shot an innocent 17-year-old Black teenager.
Yet the court delivered a verdict of not guilty.
Outraged by the decision, citizens flooded the streets, raising their voices in an organized and peaceful opposition to racial injustice.
The hashtag #BlackLivesMatter was already spreading rapidly across social media.
If my memory served me right, by September, this movement would escalate into nationwide protests.
“Interest in Black civil rights is at an all-time high. This movement addresses not only police brutality but systemic discrimination across society. There’s heightened awareness of economic inequality in particular.”
“……”
“People are paying close attention to whether Black consumers are treated fairly as customers. Even the lack of adequate banking or telecommunications infrastructure in predominantly Black areas is being called out as evidence of systemic bias. Similar articles are flooding the media right now.”
“……”
“If Harbor Lobster is sold under these circumstances, it will not go unnoticed.”
Harbor Lobster had long been cherished by Black customers.
During the peak of the BLM movement, one or two years from now, even the famed pop artist Beyoncé would reference the chain in her lyrics.
To include the brand in a song celebrating Black pride signified its symbolic importance.
“Moreover, keeping Toscana Garden while selling only Harbor Lobster? That choice will undoubtedly raise eyebrows. If this were merely an issue affecting the family restaurant industry as a whole, wouldn’t both brands need to be sold?”
Epicura owned two flagship brands: Harbor Lobster, beloved by Black customers, and Toscana Garden, favored by Whites.
Selling off the Black-oriented brand because it wasn’t profitable?
And during these turbulent times?
I turned my gaze sharply toward Whitmer.
“Above all, the personal backlash will be severe.”
Currently, only five Black CEOs lead Fortune 500 companies.
Whitmer was one of the five Black CEOs, and his position would undoubtedly fuel public outrage.
“Perhaps it will only add fuel to the fire.”
This would be even more poignant if we substituted ‘Black’ with ‘Korean.’
For example, imagine a company announces that it’s shutting down a Korean restaurant brand due to low profitability.
If the decision-makers were White executives, the Korean community would likely accept it with mixed feelings—acknowledging that Korean food hadn’t yet taken root in the local market.
But what if the CEO leading the brand were Korean?
Many in the community would feel betrayed.
Regardless of the immediate business performance, they’d expect a sense of responsibility to preserve and promote the cuisine of their homeland.
This is the plight of minority-group CEOs.
Whether they want it or not, their actions are often seen through the lens of the expectations of their racial or ethnic communities.
When they fail to live up to those expectations, the result is often cold, unforgiving rejection.
“To summarize, the timing of Harbor Lobster’s sale is crucial. The public hasn’t yet fully caught fire. At this moment, it can still be spun as just ‘declining profitability of an aging brand.’ But delay it, and the narrative could shift to one where it’s about ‘abandoning unprofitable Black customers.'”
If it reached that point, it would be akin to social suicide.
In fact, it might be better for Whitmer to step down cleanly as CEO.
This was the nature of the ticking bomb.
And because Whitmer was a Black executive, the bomb was particularly lethal for him.
“Haha, the young man has an interesting theory. It sounds plausible, but lacks realism. The chances of this situation escalating are slim.”
Whitmer dismissed my argument with a laugh.
Naturally, he had to reject it.
If he even agreed slightly, it could be interpreted as, ‘Yes, I actually want to abandon these unprofitable Black customers.’
Whitmer then locked eyes with Pierce.
“I don’t believe this nonsense, but I do agree on one thing: Holding onto this brand doesn’t seem to be getting us anywhere. We should probably wrap it up as soon as possible. What do you think?”
Pierce was being asked whether he would continue with the deal.
Whitmer was seeking to confirm Pierce’s change of position after his earlier ultimatum.
Pierce hesitated for a moment, then responded firmly.
“Yes, understood. Let’s wrap it up before the shareholder meeting.”
At last, Pierce agreed to sell immediately.
Of course, I didn’t expect the situation to unfold exactly as I had predicted.
Even I, aware of the ripple effects of the BLM protests, couldn’t predict exactly how much harm it would cause to Harbor Lobster.
What mattered now wasn’t the accuracy of my future predictions.
It was that Whitmer, the CEO, was taking proactive action, anticipating the worst crisis.
The golden rule of all service industries: ‘The customer is king.’
In times like this, the best course of action is to give the customer what they want.
Pierce’s reluctance to continue with the deal stemmed from his fear of inadvertently getting entangled in a legal issue.
But once he judged that the risk had passed, there was no reason to hesitate any longer.
Pierce glanced at his wristwatch and spoke.
“We should discuss the strategy for the shareholder meeting now. You’ve done enough for today; it’s time for you to step back.”
In other words, ‘You’ve outlived your usefulness. Go back to being the background.’
I dutifully stepped back behind Pierce again. But I wasn’t content with just that.
I had gained some of Whitmer’s trust by uncovering the nature of the bomb, but it wasn’t enough.
At this point, I might be seen as a capable strategist, but that was hardly sufficient.
What I wanted was the general’s position.
I needed to be at the front lines of the war for the bread, wielding the sword myself.
To reach that level, understanding the problem wasn’t enough.
I needed to know how to defuse the bomb.
But there was no need to rush.
Pierce, newly aware of the crisis, wouldn’t come up with a better solution than mine.
I just needed to wait patiently.
Until the two of them reached a dead-end and asked for my help.
