Suit against Bryant Family alleges falling sales

Tasting notes, varietals, grapes - anything related to wine
Message
Author
User avatar
John Morris
GCC Member
GCC Member
Posts: 16090
Joined: June 21st, 2009, 2:09 pm
Location: Gotham

Suit against Bryant Family alleges falling sales

#1 Post by John Morris » June 6th, 2019, 7:21 am

You always have to take allegations in a civil complaint with a grain of salt, since they're unproven at this stage. But there's a lot of financial detail in the complaint, including a supposedly sharp drop in sales and a build-up of inventory.

Bryant Family Vineyards facing serious financial accusations in federal court

This seems relevant to the other current threads about pricing at the high end in Napa:
$175 is the new $125
Diamond Creek pricing
"The Internet has resulted in an exponential increase in the number of instances in which humor must be explained." - me, 2019

"It's hard for a $35 zin to compete with a $100 cabernet that tastes the same." – me, 2018

User avatar
John Morris
GCC Member
GCC Member
Posts: 16090
Joined: June 21st, 2009, 2:09 pm
Location: Gotham

Re: Suit against Bryant Family alleges falling sales

#2 Post by John Morris » June 6th, 2019, 7:43 am

The most interesting allegations to me were that the family was giving a $125 million valuation to its lender, but the plaintiff alleges that "the Winery suffered from excessive back inventory as of July 2018 of over $14 million in prior vintages and an approximate 40% decline in sales over the last three years." That's a big drop when you have a lot of fixed costs.
"The Internet has resulted in an exponential increase in the number of instances in which humor must be explained." - me, 2019

"It's hard for a $35 zin to compete with a $100 cabernet that tastes the same." – me, 2018

User avatar
Bill Tex Landreth
Posts: 22673
Joined: January 27th, 2009, 11:45 am

Re: Suit against Bryant Family alleges falling sales

#3 Post by Bill Tex Landreth » June 6th, 2019, 7:47 am

Bryant has a $300 Million dollar art collection?

Yeah, no doubt sales are falling at that release price point these days. Makes you wonder how much cult wine is sitting in libraries waiting for auction.
It's not easy being drunk all the time. Everyone would be doing it if it were easy.

Gary York
Posts: 7663
Joined: April 26th, 2010, 4:02 pm
Location: Richmond, Va.

Re: Suit against Bryant Family alleges falling sales

#4 Post by Gary York » June 6th, 2019, 8:02 am

Seems LPB is no RMP.
ITB

User avatar
D@vid Bu3ker
GCC Member
GCC Member
Posts: 30889
Joined: February 14th, 2009, 8:06 am

Re: Suit against Bryant Family alleges falling sales

#5 Post by D@vid Bu3ker » June 6th, 2019, 8:05 am

Gary York wrote:
June 6th, 2019, 8:02 am
Seems LPB is no RMP.
Irrelevant. Bryant hasn't been the "hot wine" for years.
David Bueker - Rieslingfan

Mike Cohen
Posts: 2834
Joined: December 8th, 2009, 1:37 pm

Re: Suit against Bryant Family alleges falling sales

#6 Post by Mike Cohen » June 6th, 2019, 8:16 am

Yet another case of a rich family hiring someone to do work for them and then screwing the worker on compensation.

User avatar
Alan Eden
GCC Member
GCC Member
Posts: 3025
Joined: February 9th, 2014, 12:49 pm

Re: Suit against Bryant Family alleges falling sales

#7 Post by Alan Eden » June 6th, 2019, 8:32 am

$125 M valuation on a business that makes $1.7M in profit, doesnt seem like workable numbers, i know the land probably is the bulk of it but still.

Nice to see a finance person being responsible and not just going along
There are 10 kinds of people in the world, those that understand binary and those that don't

User avatar
Markus S
Posts: 5654
Joined: May 20th, 2010, 7:27 am

Re: Suit against Bryant Family alleges falling sales

#8 Post by Markus S » June 6th, 2019, 8:34 am

John Morris wrote:
June 6th, 2019, 7:43 am
The most interesting allegations to me were that the family was giving a $125 million valuation to its lender...
[wow.gif] Shockers! You mean it's not only politicians and their lawyers who lie??!!

[diablo.gif]
$ _ € ® e . k @

User avatar
John Morris
GCC Member
GCC Member
Posts: 16090
Joined: June 21st, 2009, 2:09 pm
Location: Gotham

Re: Suit against Bryant Family alleges falling sales

#9 Post by John Morris » June 6th, 2019, 8:42 am

Markus S wrote:
June 6th, 2019, 8:34 am
John Morris wrote:
June 6th, 2019, 7:43 am
The most interesting allegations to me were that the family was giving a $125 million valuation to its lender...
[wow.gif] Shockers! You mean it's not only politicians and their lawyers who lie??!!

[diablo.gif]
And lobbyists.
"The Internet has resulted in an exponential increase in the number of instances in which humor must be explained." - me, 2019

"It's hard for a $35 zin to compete with a $100 cabernet that tastes the same." – me, 2018

Dave Nerland
GCC Member
GCC Member
Posts: 278
Joined: December 22nd, 2009, 10:38 am

Re: Suit against Bryant Family alleges falling sales

#10 Post by Dave Nerland » June 6th, 2019, 8:50 am

I would not believe everything in a lawsuit. 2016 Bryant Family Vineyards Cab is an incredible wine....

User avatar
larry schaffer
BerserkerBusiness
BerserkerBusiness
Posts: 7431
Joined: January 28th, 2009, 9:26 am
Location: Santa Ynez Valley, CA

Re: Suit against Bryant Family alleges falling sales

#11 Post by larry schaffer » June 6th, 2019, 9:07 am

Dave Nerland wrote:
June 6th, 2019, 8:50 am
I would not believe everything in a lawsuit. 2016 Bryant Family Vineyards Cab is an incredible wine....
The quality of the wines is not at question here at all. We can all a test the fact that there are great wines out there that simply do not sell as well as they should. Question here is valuation.
larry schaffer
tercero wines

Dennis Borczon
GCC Member
GCC Member
Posts: 496
Joined: January 28th, 2011, 2:46 pm

Re: Suit against Bryant Family alleges falling sales

#12 Post by Dennis Borczon » June 6th, 2019, 9:09 am

Uh oh. This may be a spot of trouble for the winery. If there is a whiff of lack of status value in a brand like this it will likely mean more trouble for sales. There has to be a good deal of reputational value built into the price of all cult wines. At least there is that 300m aart collection to fall back on as security. Who know all that modern art would skyrocket in value over the years?

R. Frankel
GCC Member
GCC Member
Posts: 1541
Joined: January 24th, 2014, 11:07 pm

Re: Suit against Bryant Family alleges falling sales

#13 Post by R. Frankel » June 6th, 2019, 9:43 am

People love to predict apocalyptic endings to successes like Napa, and extrapolate massively from one (unclear) data point. I will take the opposite tack.

Napa is here to stay and will be a premium wine region for the rest of our lives (absent some hideous externality like a world war or some such). Yes times may get better or worse but there is far too much generational money, brand equity, corporate investment, and tourist infrastructure built up for this to go poof.

I could imagine some of the small family players having to sell in future recessions, but the region will still keep churning away.
Rich Frankel

User avatar
Bill Tex Landreth
Posts: 22673
Joined: January 27th, 2009, 11:45 am

Re: Suit against Bryant Family alleges falling sales

#14 Post by Bill Tex Landreth » June 6th, 2019, 9:47 am

R. Frankel wrote:
June 6th, 2019, 9:43 am
People love to predict apocalyptic endings to successes like Napa, and extrapolate massively from one (unclear) data point. I will take the opposite tack.

Napa is here to stay and will be a premium wine region for the rest of our lives (absent some hideous externality like a world war or some such). Yes times may get better or worse but there is far too much generational money, brand equity, corporate investment, and tourist infrastructure built up for this to go poof.

I could imagine some of the small family players having to sell in future recessions, but the region will still keep churning away.
This
It's not easy being drunk all the time. Everyone would be doing it if it were easy.

User avatar
Victor Hong
Posts: 13894
Joined: May 30th, 2009, 1:34 pm

Re: Suit against Bryant Family alleges falling sales

#15 Post by Victor Hong » June 6th, 2019, 10:07 am

If true, the deliberate filings of inaccurate financial statements in order to obtain loans from a federally insured depository can be felonies, unless one can----pardon the expression----pardon oneself.
WineHunter.

User avatar
Alan Eden
GCC Member
GCC Member
Posts: 3025
Joined: February 9th, 2014, 12:49 pm

Re: Suit against Bryant Family alleges falling sales

#16 Post by Alan Eden » June 6th, 2019, 10:10 am

R. Frankel wrote:
June 6th, 2019, 9:43 am
People love to predict apocalyptic endings to successes like Napa, and extrapolate massively from one (unclear) data point. I will take the opposite tack.

Napa is here to stay and will be a premium wine region for the rest of our lives (absent some hideous externality like a world war or some such). Yes times may get better or worse but there is far too much generational money, brand equity, corporate investment, and tourist infrastructure built up for this to go poof.

I could imagine some of the small family players having to sell in future recessions, but the region will still keep churning away.
Nobody is suggesting the region is in trouble, the feeling from a good portion of berserkers is that the gravy train is slowing and might well stop for a while
There are 10 kinds of people in the world, those that understand binary and those that don't

Dave Nerland
GCC Member
GCC Member
Posts: 278
Joined: December 22nd, 2009, 10:38 am

Re: Suit against Bryant Family alleges falling sales

#17 Post by Dave Nerland » June 6th, 2019, 10:18 am

larry schaffer wrote:
June 6th, 2019, 9:07 am
Dave Nerland wrote:
June 6th, 2019, 8:50 am
I would not believe everything in a lawsuit. 2016 Bryant Family Vineyards Cab is an incredible wine....
The quality of the wines is not at question here at all. We can all a test the fact that there are great wines out there that simply do not sell as well as they should. Question here is valuation.
I thought the reason for her concern was the increase in value of winery from $100Million to $125Million, justified by the sale of Colgin...

User avatar
GregT
Posts: 7188
Joined: April 15th, 2009, 3:12 pm

Re: Suit against Bryant Family alleges falling sales

#18 Post by GregT » June 6th, 2019, 10:42 am

Bryant has always been known as an art collector so has some valuable paintings. He's involved somehow with the board of the Tate and actually went to London to study art history right around the time he released his first vintage. He claimed to be on the board of the Museum of Modern Art at one point and he had the ceilings lowered in his co-op in Manhattan so he could install air conditioning for his paintings. By all reports he didn't too too well when he sold the place. His current wife was an art consultant before they married.

And he's always been involved in lawsuits.

He got sued by Helen Turley, his first wine maker, for not paying her. He lost that one. Then he sued his own attorney for allegedly screwing up his pre-nup. He sued Henry Kravis for an agreement over donating a painting that they co-owned.

It's hard to value paintings that only come up for auction once every dozen years or so. Pretty much any estimate is going to be a guess, so arguing that he over valued his collection isn't going to be easy to prove.

And I don't think it will matter to Napa at all. It's more of the same for him. He doesn't represent Napa any more than other owners like Hall, Harlan, Getty, Kieu Hoang, Foley, Kroenke, Davis, Lawrence, etc., who are all billionaires who bought properties as a combination of fashion, fun, and investment. There are lots of Chinese looking around right now. But there will be others who will buy them out, just like Banks was bought out when he went to prison, and the personal financial problems of the owners will not have any effect on Napa as a wine region, other than replacing one owner with another.
G . T a t a r

[i]"the incorrect overuse of apostrophes is staggering these days. I wonder if half the adults these days have any idea what they are for." Chris Seiber, 5/14/19[/i]

User avatar
CJ Beazley
GCC Member
GCC Member
Posts: 21077
Joined: December 3rd, 2011, 6:33 am
Location: Ovilla\Midlothian Texas

Re: Suit against Bryant Family alleges falling sales

#19 Post by CJ Beazley » June 6th, 2019, 10:46 am

Dennis Borczon wrote:
June 6th, 2019, 9:09 am
Uh oh. This may be a spot of trouble for the winery. If there is a whiff of lack of status value in a brand like this it will likely mean more trouble for sales. There has to be a good deal of reputational value built into the price of all cult wines. At least there is that 300m aart collection to fall back on as security. Who know all that modern art would skyrocket in value over the years?
This was my first thought, vicious cycle kind of thing. They should have paid her the 400 grand and kept this quite.
It's C(raig)

User avatar
blarmston
Posts: 409
Joined: February 24th, 2016, 10:18 am

Re: Suit against Bryant Family alleges falling sales

#20 Post by blarmston » June 6th, 2019, 11:16 am

The rate of NapaFlation has easily exceeded the true rate of inflation in recent years ("official" figures are in the 2.25% range, but if you believe that than I have a bridge in Brooklyn that I would happily sell to you), and it is unsustainable. Fans of Napa have been reluctantly absorbing these price increases due to a thriving economy and ever increasing asset prices (stocks, bonds, land, etc). Now that the wheels are falling off the economy (why do you think that as of DEC the Fed was talking about 3 rate HIKES this year, now they are telegraphing that they are about to begin CUTTING rates as early as this month), that is coming to an end.

Buyers will become much more deliberate in choosing who to support, and where they allocate their budgets. And I feel that in the aggregate, wine budgets will be lowered to compensate for greater economic uncertainty and deflating asset prices. And oh yeah, rising inflation (official and unofficial) to boot....

This Bryant case may simply be them trying to maintain their "cult status" by projecting exclusivity and limited supply when in fact there is ample buildup of supply. They are perhaps willing to inventory ever increasing amounts of their yield in the hopes that they can recoup costs by keeping the price per 750 high.

Just because someone may have a $300M art portfolio doesn't mean that they haven't borrowed a similar amount using the art as collateral. In my line of work I run into multi multi millionaires all the time. The asset side of the balance sheet looks great but when I look at the liability side, then suddenly the Net Worth figure doesn't look nearly as impressive...
-Brian Armston

User avatar
Jim Anderson
BerserkerBusiness
BerserkerBusiness
Posts: 4762
Joined: October 20th, 2010, 1:18 pm
Location: Portland/Newberg, Oregon

Re: Suit against Bryant Family alleges falling sales

#21 Post by Jim Anderson » June 6th, 2019, 11:56 am

Alan Eden wrote:
June 6th, 2019, 8:32 am
$125 M valuation on a business that makes $1.7M in profit, doesnt seem like workable numbers, i know the land probably is the bulk of it but still.

Nice to see a finance person being responsible and not just going along
I wasn't going to read the article until I read that. Bryant has a net revenune of $1.7M? WTF are they doing or do they make WAY less wine than I am imagining? Or, perhaps, they are selling way less wine than I would have suspected.
Co-owner, Patricia Green Cellars

User avatar
GregT
Posts: 7188
Joined: April 15th, 2009, 3:12 pm

Re: Suit against Bryant Family alleges falling sales

#22 Post by GregT » June 6th, 2019, 1:44 pm

Just because someone may have a $300M art portfolio doesn't mean that they haven't borrowed a similar amount using the art as collateral. In my line of work I run into multi multi millionaires all the time. The asset side of the balance sheet looks great but when I look at the liability side, then suddenly the Net Worth figure doesn't look nearly as impressive...
That's true. In this case, they pledged $300M in art against a $98M loan. It came up for renewal and they wanted to renegotiate it. When the bank wanted access to their income, rather than just the art, they claimed that the winery income had decreased over the past couple years and was worth less than previously. Ridenhour told them they'd have to disclose that to the banks and she alleges that consequently they fired her.

Who knows if they're intentionally undervaluing the winery to discourage banks to look at it, or whether it really is of less value than it was. But the winery has lost some cachet. Once your wine is available at Total Wine you really can't call it a "cult" wine any more.
G . T a t a r

[i]"the incorrect overuse of apostrophes is staggering these days. I wonder if half the adults these days have any idea what they are for." Chris Seiber, 5/14/19[/i]

User avatar
John Morris
GCC Member
GCC Member
Posts: 16090
Joined: June 21st, 2009, 2:09 pm
Location: Gotham

Re: Suit against Bryant Family alleges falling sales

#23 Post by John Morris » June 6th, 2019, 2:31 pm

Jim Anderson wrote:
June 6th, 2019, 11:56 am
Alan Eden wrote:
June 6th, 2019, 8:32 am
$125 M valuation on a business that makes $1.7M in profit, doesnt seem like workable numbers, i know the land probably is the bulk of it but still.

Nice to see a finance person being responsible and not just going along
I wasn't going to read the article until I read that. Bryant has a net revenune of $1.7M? WTF are they doing or do they make WAY less wine than I am imagining? Or, perhaps, they are selling way less wine than I would have suspected.
The story is a bit confusing about the financial results. According to the complaint, p. 38, para. 39, net income (i.e., after expenses) for 2017 was $2.5 million. But the plaintiff contends that, because of declining sales, the plaintiff believed that net income was likely to fall to something like $1.8 million in 2018. (I'm not sure if these are calendar year figures, or if the fiscal year ended mid-year. The complaint says the 2017 financials were only finalized in the fall of 2018, which seems late if the fiscal year ended 12/31/17, but if it ended in the summer, you'd call that FY2018 results.)

The complaint alleges that the $6-$7 million in "income" the Bryants wanted to report to the bank was mostly revenue, before costs were subtracted.

How does $6-$7 million in sales compare to your expectations, Jim? $2.5 million in net income on that would be good -- more than a 35% profit margin.

I couldn't help wondering why the bank wouldn't insist on tax returns, where the Bryants would have an incentive to show a lower net.
"The Internet has resulted in an exponential increase in the number of instances in which humor must be explained." - me, 2019

"It's hard for a $35 zin to compete with a $100 cabernet that tastes the same." – me, 2018

User avatar
Alan Eden
GCC Member
GCC Member
Posts: 3025
Joined: February 9th, 2014, 12:49 pm

Re: Suit against Bryant Family alleges falling sales

#24 Post by Alan Eden » June 6th, 2019, 2:38 pm

Well at full price its $9000 a case, so 1000 cases would be $9M. Obviously they dont sell at full price due to three tier system etc so that will reduce it. No idea how many cases they sell. But if they only do $7M in top line sales how in the world is it valued at $125 M ? unless they hold like 100 acres plus of prime vineyards
There are 10 kinds of people in the world, those that understand binary and those that don't

User avatar
John Morris
GCC Member
GCC Member
Posts: 16090
Joined: June 21st, 2009, 2:09 pm
Location: Gotham

Re: Suit against Bryant Family alleges falling sales

#25 Post by John Morris » June 6th, 2019, 2:49 pm

That is the question.
"The Internet has resulted in an exponential increase in the number of instances in which humor must be explained." - me, 2019

"It's hard for a $35 zin to compete with a $100 cabernet that tastes the same." – me, 2018

User avatar
Markus S
Posts: 5654
Joined: May 20th, 2010, 7:27 am

Re: Suit against Bryant Family alleges falling sales

#26 Post by Markus S » June 6th, 2019, 2:51 pm

R. Frankel wrote:
June 6th, 2019, 9:43 am
People love to predict apocalyptic endings to successes like Napa, and extrapolate massively from one (unclear) data point. I will take the opposite tack.

Napa is here to stay and will be a premium wine region for the rest of our lives (absent some hideous externality like a world war or some such). Yes times may get better or worse but there is far too much generational money, brand equity, corporate investment, and tourist infrastructure built up for this to go poof.

I could imagine some of the small family players having to sell in future recessions, but the region will still keep churning away.
A warming climate and California wildfire season may have the final word on that...
$ _ € ® e . k @

Dave Nerland
GCC Member
GCC Member
Posts: 278
Joined: December 22nd, 2009, 10:38 am

Re: Suit against Bryant Family alleges falling sales

#27 Post by Dave Nerland » June 6th, 2019, 3:23 pm

Alan Eden wrote:
June 6th, 2019, 2:38 pm
Well at full price its $9000 a case, so 1000 cases would be $9M. Obviously they dont sell at full price due to three tier system etc so that will reduce it. No idea how many cases they sell. But if they only do $7M in top line sales how in the world is it valued at $125 M ? unless they hold like 100 acres plus of prime vineyards
On the mailing list, it is $6600 per case ($550 bottle), for the 2016.

User avatar
Howard Cooper
GCC Member
GCC Member
Posts: 15893
Joined: May 30th, 2009, 8:37 am
Location: Rockville, MD

Re: Suit against Bryant Family alleges falling sales

#28 Post by Howard Cooper » June 6th, 2019, 4:59 pm

R. Frankel wrote:
June 6th, 2019, 9:43 am
People love to predict apocalyptic endings to successes like Napa, and extrapolate massively from one (unclear) data point. I will take the opposite tack.

Napa is here to stay and will be a premium wine region for the rest of our lives (absent some hideous externality like a world war or some such). Yes times may get better or worse but there is far too much generational money, brand equity, corporate investment, and tourist infrastructure built up for this to go poof.

I could imagine some of the small family players having to sell in future recessions, but the region will still keep churning away.
Who (other than you) said anything about Napa having an apocalyptic ending? strawman strawman strawman strawman strawman
Howard

"That's what I do. I drink and I know things." Tyrion Lannister

cslechta
Posts: 2
Joined: April 17th, 2019, 8:36 am

Re: Suit against Bryant Family alleges falling sales

#29 Post by cslechta » June 6th, 2019, 4:59 pm

Alan Eden wrote:
June 6th, 2019, 2:38 pm
Well at full price its $9000 a case, so 1000 cases would be $9M. Obviously they dont sell at full price due to three tier system etc so that will reduce it. No idea how many cases they sell. But if they only do $7M in top line sales how in the world is it valued at $125 M ? unless they hold like 100 acres plus of prime vineyards
What is the three tier system?

User avatar
N Weis
Posts: 898
Joined: January 30th, 2009, 8:11 am
Location: Napa

Re: Suit against Bryant Family alleges falling sales

#30 Post by N Weis » June 6th, 2019, 5:07 pm

John Morris wrote:
June 6th, 2019, 2:31 pm
Jim Anderson wrote:
June 6th, 2019, 11:56 am
Alan Eden wrote:
June 6th, 2019, 8:32 am
$125 M valuation on a business that makes $1.7M in profit, doesnt seem like workable numbers, i know the land probably is the bulk of it but still.

Nice to see a finance person being responsible and not just going along
I wasn't going to read the article until I read that. Bryant has a net revenune of $1.7M? WTF are they doing or do they make WAY less wine than I am imagining? Or, perhaps, they are selling way less wine than I would have suspected.
The story is a bit confusing about the financial results. According to the complaint, p. 38, para. 39, net income (i.e., after expenses) for 2017 was $2.5 million. But the plaintiff contends that, because of declining sales, the plaintiff believed that net income was likely to fall to something like $1.8 million in 2018. (I'm not sure if these are calendar year figures, or if the fiscal year ended mid-year. The complaint says the 2017 financials were only finalized in the fall of 2018, which seems late if the fiscal year ended 12/31/17, but if it ended in the summer, you'd call that FY2018 results.)

The complaint alleges that the $6-$7 million in "income" the Bryants wanted to report to the bank was mostly revenue, before costs were subtracted.

How does $6-$7 million in sales compare to your expectations, Jim? $2.5 million in net income on that would be good -- more than a 35% profit margin.

I couldn't help wondering why the bank wouldn't insist on tax returns, where the Bryants would have an incentive to show a lower net.
2.5 net on 7 million in sales would be absolutely outstanding in my experience in the wine biz. I would think what is more likely at issue is 2.5 net on 7 million in gross profit (ie after COGS). Or perhaps 7 million before all the "other" expenses owners sometimes run through the business get put on the P&L. Look at Constellation or Treasury's or Willamette Valley Vineyards' 10-Ks for some general ideas on nets vs sales, etc. Obviously not apples to apples with Bryant, but they also have the economies of scale.
Alan Eden wrote:
June 6th, 2019, 2:38 pm
Well at full price its $9000 a case, so 1000 cases would be $9M. Obviously they dont sell at full price due to three tier system etc so that will reduce it. No idea how many cases they sell. But if they only do $7M in top line sales how in the world is it valued at $125 M ? unless they hold like 100 acres plus of prime vineyards
Not by an EBITDA multiple, certainly. My bet is that valuation is a "market valuation" including tangible (vineyard/winery) and intangible (brand goodwill) assets with comps. And, honestly, it probably is not all that far off. I suspect the 60% of Colgin LVMH bought is #1 with a bullet on the list of comps.
ITB - N @ t e

User avatar
GregT
Posts: 7188
Joined: April 15th, 2009, 3:12 pm

Re: Suit against Bryant Family alleges falling sales

#31 Post by GregT » June 6th, 2019, 5:50 pm

They have 13 acres on Pritchard Hill next to Chappellet and Colgin and close to Ovid and David Arthur. A few years ago top Napa vineyard land was nearing $1M an acre and I imagine this could go for substantially more.

The other things to remember is that it's not only the land itself. If it's already planted to Cab, which it is, and the vines are in producing mode, which they are, it's more valuable. And if you have an existing winery license with a good facility, that's a further plus.

However, the most expensive vineyard land is still in Bordeaux. I believe Paulliac has the most expensive land at $2M an acre, based on the most recent sales prices.

So even at that level, is Bryant pricing in goodwill for $100M?

Colgin sold 60% recently at some undisclosed price. Does anyone know what they actually got? That would probably be the most recent comp.
What is the three tier system?
Seriously? It's producer-wholesaler-retailer. Do a search on this forum or Google.
G . T a t a r

[i]"the incorrect overuse of apostrophes is staggering these days. I wonder if half the adults these days have any idea what they are for." Chris Seiber, 5/14/19[/i]

Tom G l a s g o w
GCC Member
GCC Member
Posts: 4127
Joined: February 19th, 2010, 2:01 pm

Re: Suit against Bryant Family alleges falling sales

#32 Post by Tom G l a s g o w » June 6th, 2019, 5:58 pm

GregT wrote:
June 6th, 2019, 5:50 pm
They have 13 acres on Pritchard Hill next to Chappellet and Colgin and close to Ovid and David Arthur. A few years ago top Napa vineyard land was nearing $1M an acre and I imagine this could go for substantially more.

The other things to remember is that it's not only the land itself. If it's already planted to Cab, which it is, and the vines are in producing mode, which they are, it's more valuable. And if you have an existing winery license with a good facility, that's a further plus.

However, the most expensive vineyard land is still in Bordeaux. I believe Paulliac has the most expensive land at $2M an acre, based on the most recent sales prices.

So even at that level, is Bryant pricing in goodwill for $100M?

Colgin sold 60% recently at some undisclosed price. Does anyone know what they actually got? That would probably be the most recent comp.
What is the three tier system?
Seriously? It's producer-wholesaler-retailer. Do a search on this forum or Google.
Poster probably lives in one of those socialist countries with lower wine prices.

User avatar
John Morris
GCC Member
GCC Member
Posts: 16090
Joined: June 21st, 2009, 2:09 pm
Location: Gotham

Re: Suit against Bryant Family alleges falling sales

#33 Post by John Morris » June 6th, 2019, 5:59 pm

GregT wrote:
June 6th, 2019, 5:50 pm
Colgin sold 60% recently at some undisclosed price. Does anyone know what they actually got? That would probably be the most recent comp.
The complaint says the Bryants were basing their $125M valuation on the price that LVMH reportedly paid for Colgin, but I've just searched now, and i can't find any reports of a price.
"The Internet has resulted in an exponential increase in the number of instances in which humor must be explained." - me, 2019

"It's hard for a $35 zin to compete with a $100 cabernet that tastes the same." – me, 2018

User avatar
N Weis
Posts: 898
Joined: January 30th, 2009, 8:11 am
Location: Napa

Re: Suit against Bryant Family alleges falling sales

#34 Post by N Weis » June 6th, 2019, 6:07 pm

John Morris wrote:
June 6th, 2019, 5:59 pm
GregT wrote:
June 6th, 2019, 5:50 pm
Colgin sold 60% recently at some undisclosed price. Does anyone know what they actually got? That would probably be the most recent comp.
The complaint says the Bryants were basing their $125M valuation on the price that LVMH reportedly paid for Colgin, but I've just searched now, and i can't find any reports of a price.
I've only seen speculation and rumor, but it was, well, enough to make the Bryant valuation not too unreasonable.
ITB - N @ t e

User avatar
John Morris
GCC Member
GCC Member
Posts: 16090
Joined: June 21st, 2009, 2:09 pm
Location: Gotham

Re: Suit against Bryant Family alleges falling sales

#35 Post by John Morris » June 6th, 2019, 6:10 pm

Unfortunately, LVMH's drinks division has revenue of about 5 billion euros, so this is far below their materiality threshold for disclosure.
"The Internet has resulted in an exponential increase in the number of instances in which humor must be explained." - me, 2019

"It's hard for a $35 zin to compete with a $100 cabernet that tastes the same." – me, 2018

User avatar
Randy Bowman
GCC Member
GCC Member
Posts: 9413
Joined: January 27th, 2009, 2:23 pm
Location: Napa, CA

Re: Suit against Bryant Family alleges falling sales

#36 Post by Randy Bowman » June 6th, 2019, 8:33 pm

The Bryants are getting pretty old. They built the winery using the same game plan as they had to build their original fortune. They even over paid employees. The popularity of the wines dipped five or more years ago. Now, they are fair game for those same employees, whether it is their actual actions/lifestyle or the vulnerability of their current situation. I hate to see an Icon fade for whatever reason.
IN THE BUSINESS SHILL: An associate of a person selling goods, who pretends no association to the seller and assumes the air of an enthusiastic customer.

User avatar
Alan Eden
GCC Member
GCC Member
Posts: 3025
Joined: February 9th, 2014, 12:49 pm

Re: Suit against Bryant Family alleges falling sales

#37 Post by Alan Eden » June 6th, 2019, 8:42 pm

Randy Bowman wrote:
June 6th, 2019, 8:33 pm
The Bryants are getting pretty old. They built the winery using the same game plan as they had to build their original fortune. They even over paid employees. The popularity of the wines dipped five or more years ago. Now, they are fair game for those same employees, whether it is their actual actions/lifestyle or the vulnerability of their current situation. I hate to see an Icon fade for whatever reason.
Even if its greed ?

$750 a bottle ? really
There are 10 kinds of people in the world, those that understand binary and those that don't

User avatar
Jim Anderson
BerserkerBusiness
BerserkerBusiness
Posts: 4762
Joined: October 20th, 2010, 1:18 pm
Location: Portland/Newberg, Oregon

Re: Suit against Bryant Family alleges falling sales

#38 Post by Jim Anderson » June 6th, 2019, 11:01 pm

Alan Eden wrote:
June 6th, 2019, 2:38 pm
Well at full price its $9000 a case, so 1000 cases would be $9M. Obviously they dont sell at full price due to three tier system etc so that will reduce it. No idea how many cases they sell. But if they only do $7M in top line sales how in the world is it valued at $125 M ? unless they hold like 100 acres plus of prime vineyards
I literally know zip here. I Googled it and saw a production of 3-4,000 cases. Found pricing and figured some mix of DTC and FOB skewed to the former. Maybe I’m wrong but cannot see why I would be. In the middle of the production level with normal sales you’re well into 8 figures of revenue. How are they only generating under $2 million from that? Maybe they’re selling WAY less or aren’t producing at the levels I was basing stuff on. I have no idea. But even 3,000 cases at $4.000/CS which really presumes a heavy FOB reliance is still $12M gross. Doing less than $2M on that would seem weird. Then again I’ve never made high end CA Can so WTF do I know?
Co-owner, Patricia Green Cellars

User avatar
lleichtman
GCC Member
GCC Member
Posts: 1296
Joined: June 28th, 2014, 6:28 pm
Location: Santa Fe NM

Re: Suit against Bryant Family alleges falling sales

#39 Post by lleichtman » June 7th, 2019, 9:56 am

cslechta wrote:
June 6th, 2019, 4:59 pm
Alan Eden wrote:
June 6th, 2019, 2:38 pm
Well at full price its $9000 a case, so 1000 cases would be $9M. Obviously they dont sell at full price due to three tier system etc so that will reduce it. No idea how many cases they sell. But if they only do $7M in top line sales how in the world is it valued at $125 M ? unless they hold like 100 acres plus of prime vineyards
What is the three tier system?
Winemaker----Distributor-----retail (store, restaurant, don't think online sales count, secondary market)
Lawrence G. Leichtman

Steve Crawford
Posts: 1057
Joined: August 28th, 2013, 3:29 pm
Location: NC

Re: Suit against Bryant Family alleges falling sales

#40 Post by Steve Crawford » June 7th, 2019, 10:20 am

shocking- bettina seems to be so fiscally conservative.

User avatar
GregT
Posts: 7188
Joined: April 15th, 2009, 3:12 pm

Re: Suit against Bryant Family alleges falling sales

#41 Post by GregT » June 7th, 2019, 12:02 pm

lleichtman wrote:
June 7th, 2019, 9:56 am
cslechta wrote:
June 6th, 2019, 4:59 pm
Alan Eden wrote:
June 6th, 2019, 2:38 pm
Well at full price its $9000 a case, so 1000 cases would be $9M. Obviously they dont sell at full price due to three tier system etc so that will reduce it. No idea how many cases they sell. But if they only do $7M in top line sales how in the world is it valued at $125 M ? unless they hold like 100 acres plus of prime vineyards
What is the three tier system?
Winemaker----Distributor-----retail (store, restaurant, don't think online sales count, secondary market)
See post 31.

Jim - I was thinking numbers like yours too, but it was all guesswork.

I looked for the Colgin sale too but couldn't find anything.

In the past, Bryant has said they get between 1.1 and 2.8 tons per acre, but it's usually on the low side. So for math purposes assuming 2 tons an acre at 60 cases per ton, that's 120 cases per acre. They have 13 acres, so that gives them 1560 cases. Assuming your $4000/case, that gives them $6.2M, or about $480K per acre.

Those are all made up numbers though, and I don't know EBITDA or how one sets a value on the revenue stream, because it seems like there's a bit of mystery there.

As mentioned, Total wine sells Bryant. The prices at Total range from $189-699, depending on the bottling. I don't know what the mix is, or what Total is paying. For high-end labels Total is often willing to take a loss because the labels bring people into the store and Total really makes their money on private labels and closeouts. So maybe they're paying standard wholesale for Bryant, who knows. But I suspect they're not selling a lot of Bryant anyway. And if Bryant is desperate enough to sell to Total, they're probably offering substantial discounts elsewhere.
G . T a t a r

[i]"the incorrect overuse of apostrophes is staggering these days. I wonder if half the adults these days have any idea what they are for." Chris Seiber, 5/14/19[/i]

JG Salazar
Posts: 81
Joined: November 17th, 2009, 2:24 pm
Location: NYC

Re: Suit against Bryant Family alleges falling sales

#42 Post by JG Salazar » June 7th, 2019, 12:07 pm

We haven't bought Bryant for retail in several years. Wholesale pricing in NY was always nuts, and it got the point where most consumers buying the wine were getting it for less than we were. Easy pass.
Jesse Salazar ITB - USQ

User avatar
Roy Piper
Posts: 3820
Joined: January 27th, 2009, 1:57 pm

Re: Suit against Bryant Family alleges falling sales

#43 Post by Roy Piper » June 9th, 2019, 12:22 am

Alan Eden wrote:
June 6th, 2019, 8:32 am
$125 M valuation on a business that makes $1.7M in profit, doesnt seem like workable numbers, i know the land probably is the bulk of it but still.
Agree but do LOL at the state of "valuation" in today's world..

Bryant: $1.7M profit.... $125M valuation.
Uber: -$4B profit.... $75B valuation
Tesla: -$3.4B profit.... 36B valuation.
Uber and Tesla dream of the day they actually make a $1.7 million dollar profit. champagne.gif
ITB, text me anytime at 707-266-4168

User avatar
Robert Dentice
Posts: 1671
Joined: March 5th, 2009, 11:40 am

Re: Suit against Bryant Family alleges falling sales

#44 Post by Robert Dentice » June 9th, 2019, 1:27 am

Roy Piper wrote:
June 9th, 2019, 12:22 am
Alan Eden wrote:
June 6th, 2019, 8:32 am
$125 M valuation on a business that makes $1.7M in profit, doesnt seem like workable numbers, i know the land probably is the bulk of it but still.
Agree but do LOL at the state of "valuation" in today's world..

Bryant: $1.7M profit.... $125M valuation.
Uber: -$4B profit.... $75B valuation
Tesla: -$3.4B profit.... 36B valuation.
Uber and Tesla dream of the day they actually make a $1.7 million dollar profit. champagne.gif
Jeff Bezos (ie the richest man in the world) was criticized for years for not turning a profit and I think it has worked out all right. The difference between a winery and a tech enabled company is that you have an input (grapes) that is not infinitely scaleable.

Hao Lu
Posts: 34
Joined: October 15th, 2015, 5:02 pm

Re: Suit against Bryant Family alleges falling sales

#45 Post by Hao Lu » June 9th, 2019, 5:55 am

Roy Piper wrote:
June 9th, 2019, 12:22 am
Alan Eden wrote:
June 6th, 2019, 8:32 am
$125 M valuation on a business that makes $1.7M in profit, doesnt seem like workable numbers, i know the land probably is the bulk of it but still.
Agree but do LOL at the state of "valuation" in today's world..

Bryant: $1.7M profit.... $125M valuation.
Uber: -$4B profit.... $75B valuation
Tesla: -$3.4B profit.... 36B valuation.
Uber and Tesla dream of the day they actually make a $1.7 million dollar profit. champagne.gif
Interesting!

David J
GCC Member
GCC Member
Posts: 189
Joined: September 1st, 2015, 5:31 pm

Re: Suit against Bryant Family alleges falling sales

#46 Post by David J » June 9th, 2019, 11:10 am

I probably would have fired her too but not over this valuation dispute. Paying someone 400k to renegotiate a loan with the same bank is silly. Also if 300m in assets already backs up the loan why does the bank need the winery financials. Is that part of the collateral too? If they were concerned about current income you could easily give them something else that didn’t have the enterprise value of the winery in it. She clearly did a terrible job negotiating. Doesn’t he have a lawyer and or a cfo at the winery that can handle this?
j = J 0 y c e
Itb

David J
GCC Member
GCC Member
Posts: 189
Joined: September 1st, 2015, 5:31 pm

Re: Suit against Bryant Family alleges falling sales

#47 Post by David J » June 9th, 2019, 11:12 am

I will say if his sales are way down and inventory is piling up, this story won’t help his sales. People that like the wine but stayed on the sidelines due to price can lay off now knowing this likely ends with lower prices eventually.
j = J 0 y c e
Itb

Mel Knox
GCC Member
GCC Member
Posts: 1715
Joined: July 30th, 2010, 8:46 am
Location: San francisco

Re: Suit against Bryant Family alleges falling sales

#48 Post by Mel Knox » June 9th, 2019, 11:46 am

To quote the late Justin Meyer, There is no money in selling wine but lots in selling wineries.

Lots of wineries have sold for five to ten times annual turnover...let alone ebit.

If you go to MOMA there is a room full of Jackson Pollock paintings. This is the Don Bryant jr room. Or they on loan or a gift?? Dunno...

Helen Turley told me Don once paid $40 million for an Ellsworth Kelly...Don must have doing well then. Another friend told me he once hosted the entire St Louis Rams team after the super bowl they won...players, coaches, wives..all at a sit down dinner at his house...don't think they had to use card tables....
ITB

User avatar
Roy Piper
Posts: 3820
Joined: January 27th, 2009, 1:57 pm

Re: Suit against Bryant Family alleges falling sales

#49 Post by Roy Piper » June 9th, 2019, 10:40 pm

Mel Knox wrote:
June 9th, 2019, 11:46 am
To quote the late Justin Meyer, There is no money in selling wine but lots in selling wineries.
Also true of English soccer clubs.
ITB, text me anytime at 707-266-4168

Ian Dorin
Posts: 4522
Joined: January 27th, 2009, 12:39 pm
Location: Springfield, NJ

Re: Suit against Bryant Family alleges falling sales

#50 Post by Ian Dorin » June 10th, 2019, 6:02 am

GregT wrote:
June 7th, 2019, 12:02 pm
lleichtman wrote:
June 7th, 2019, 9:56 am
cslechta wrote:
June 6th, 2019, 4:59 pm


What is the three tier system?
Winemaker----Distributor-----retail (store, restaurant, don't think online sales count, secondary market)
See post 31.

Jim - I was thinking numbers like yours too, but it was all guesswork.

I looked for the Colgin sale too but couldn't find anything.

In the past, Bryant has said they get between 1.1 and 2.8 tons per acre, but it's usually on the low side. So for math purposes assuming 2 tons an acre at 60 cases per ton, that's 120 cases per acre. They have 13 acres, so that gives them 1560 cases. Assuming your $4000/case, that gives them $6.2M, or about $480K per acre.

Those are all made up numbers though, and I don't know EBITDA or how one sets a value on the revenue stream, because it seems like there's a bit of mystery there.

As mentioned, Total wine sells Bryant. The prices at Total range from $189-699, depending on the bottling. I don't know what the mix is, or what Total is paying. For high-end labels Total is often willing to take a loss because the labels bring people into the store and Total really makes their money on private labels and closeouts. So maybe they're paying standard wholesale for Bryant, who knows. But I suspect they're not selling a lot of Bryant anyway. And if Bryant is desperate enough to sell to Total, they're probably offering substantial discounts elsewhere.
My understanding that is that total production at Bryant is over 3000 cases per year.
ITB

“I spent half my money on gambling, alcohol and wild women. The other half I wasted.” -WC Fields

Zachy's

Post Reply

Return to “Wine Talk”