Watch and learn – Vin Lee on luxury brand portfolios

4 December 2015

Heading a luxury brand portfolio worth $7 billion is no easy job, contrary to how it may sound. Grand Metropolitan’s owner and CEO, Vin Lee, tells Andrew Tunnicliffe of the ups and downs of three decades in business.

A Domino's pizza is perhaps not the food you would most closely associate with today's CEO. For those outside of the corporate world, in fact, such a meal choice would be more akin to a lazy weekend evening with friends, a glass of two of wine and watching a movie. Vin Lee, however, once told Haute Living that a Domino's was perfect for those long nights at the office. It's wonderfully humbling to imagine the aroma of a deep-crust pepperoni pizza wafting through the corridors of a swanky Bel Air office complex.

Lee is CEO of Grand Metropolitan (Grand Met), a holding company valued at $7 billion. Operating from his office in the foothills of the Santa Monica Mountains, he is the driving force behind the luxury brands business with a quite remarkable story. Having become a self-made millionaire in his late teens, his career - at least that's what I call it, as he questions whether it warrants the label - began in a very different field.

"When I was in high school, there were those that felt I had some artistic talent, including fine art, animation, and commercial design and graphics," he explains. "Time Warner Cable had granted the school a public access channel, so we were fortunate to have a TV studio built on campus.

"During this time, Commodore released its Amiga 1000 with Deluxe Paint, in 1985, so, much like tech legends Bill Gates, Paul Allen and Steve Wozniak had done before, I spent every hour on those machines the school would allow. My other studies included business, marketing, and accounting."

Name in lights

Having already developed the first computer accountancy class, and produced animations and title sequences for Time Warner Cable Channel 10, Lee was offered the chance to study under the then Hanna-Barbera Productions' director.

"Over 4,000 hand-drawn pen-and-inked cells taught me about patience, persistence and working alone through the many nights towards a goal," he says. His animations were well received and led to the offer of a place at Walt Disney's California Institute of Arts, aged just 16. Despite how early this was, elucidates Lee, it likely proved to be the foundation for his career.

"The layering of these activities, one upon another at such a young age, created a great deal of confidence, even overconfidence, in my abilities... I felt I could accomplish anything.

"The development and nurturing of my creativity by the school administration and my family led to my patents for illuminated mechanical billboards, and creation of the tennis earrings and dimpless golf balls."

It was the billboards that proved to be Lee's first big success.

"My illuminated mechanical billboard patents were formed into a company. We designed marquees for companies like H Wayne Huizenga's Blockbuster Video, Sumner Redstone's National Amusements and Philip Anschutz's Regal Cinemas," he explains.

Speaking of a time when media content wasn't available on tap as it is today, with film studios having phenomenal power over the industry, entertainment providers were looking for other revenue streams. "Blockbuster Video had such exponential growth in those days, they were pioneering an entire industry on the fly."

I wanted to be one of those men. I didn't want to be just a member of the club; I wanted to own the clubhouse.

Although there was a lot to look forward to with other avenues opening up - such as discussions with Lodgenet Entertainment, Marvin Davis's Spectravision, and On Command Corp - Blockbuster Video was to deliver Lee his first professional blow.

"I was unprepared for the impending success and even more unprepared for the failure," he says. "Being just 20 years old and constructing something in the basement with my father that was projected to generate $40 million a year in profits was surreal."

After having an incredibly close working relationship with Blockbuster's management team, however, things changed quite suddenly: vice-chairman and COO Scott Beck left the video giant to pursue his own interests.

"Management was shaken up, and my relationships were gone. Everything I'd hoped and planned for was incinerated with one phone call. I was devastated. It was terribly humbling, and led me to realise I should never put all my focus and future into one project again," Lee recalls.

In the club

Today, Lee is surrounded by luxury. The world he inhabits is somewhat different to that of the late '80s and early '90s. Although having spent his childhood in an affluent neighbourhood, it was clear early on that his drive, determination and appreciation of the finer things would grow to be a huge influence on his life.

"Wall Street, Beverly Hills Cop, Miami Vice, Lifestyles of the Rich and Famous, and Forbes Magazine were all important to me... But it was the cars more than anything else that I was drawn to. In my late teens, I would drive around the city at 2am and window-shop the exotic car dealerships."

At the same time, Lee's competitors today - the likes of Arnault (LVMH Moët Hennessy Louis Vuitton), Johann Rupert (Compagnie Financière Richemont) and François Pinault (Pinault-Printemps-Redoute, now Kering) - were busy planting the seeds of their luxury goods conglomerates.

"These men didn't just wear the suits and watches - they owned the companies that made the champagne, the jewellery, the fashion. I wanted to be one of those men. I didn't want to be just a member of the club; I wanted to own the clubhouse."

Today, Lee has fulfilled that dream, boasting The Beverly Hills Cigar Club among his portfolio. It is a private group of individuals passionate about wine, spirits and cigars. The club participates in charity auctions, celebrity events and red-carpet functions including the Cannes Film Festival, Oscars, Grammys and Emmys, as well as the Independent Spirit Awards.

Other products and brands among the portfolio include tobacco and spirits, sports equipment, home furnishings and technology, as well as other luxury goods.

Jewel in the crown

It's perhaps jewellery, however, that Lee's empire is most renowned for and, as with many other things, his interest in it became tangible in an unusual way.

"DuQuet Jewelers was my first jewellery asset. I was speaking with an account executive for the local trade exchange about how I would like to purchase a Rolex President on the eve of closing a major contract. I walked into DuQuet Jewelers and, within a few hours, walked out having made the investment." It wasn't the watch he had left with though - it was the business itself.

DuQuet Jewelers specialised in creating what Lee describes as "one-of-a-kind works of art for Detroit's elite". Several times each year, black-tie events showing off the new seasonal collections were held at such prominent locations as the Dodge brothers' Meadow Brook Estate, Albert Kahn's Cranbrook House and Gardens, and even aboard the legendary Star of Detroit cruise liner. "It was participating in these events," Lee continues, "that I was able to learn the etiquette of luxury.

"National Jeweler, Jewelers' Circular Keystone [JCK] and Modern Jeweler magazines were stacked hidden in a cabinet of my new office. Over the next few months, I was able to consume all of the jewellery industry workings of the past 50 years, including the assembling and bankruptcies of Zale Corporation, then the largest jewellers in the US. I was convinced that I wanted to be a part of this world of diamonds and gold."

Today, Finlay Fine Jewelry is one of the largest privately held jewellery groups in North America, owning over 70 brands, with 30 of them in the top 50.

In addition to jewellery, Lee has managed to add fine art to his collection of luxury goods. Although he'd studied fine art during his school years, it was the result of his jewellery acquisitions that led him to art. As ever, it was a chance purchase.

"Park West Gallery was located down the street from my first offices. I would often venture there and wander the exhibits. Unlike the varied museums, it was fascinating to see you could purchase these great works of art for your home or office. My first piece was a trade deal for a custom-made bracelet.

"When I started to invest in jewellery, commodities prices had just crashed. Gold had sunk below $300; silver was around $3. We were able to acquire struggling or bankrupt jewellers for pennies. In 2011, as the gold market shot near $2,000 and silver near $40, the art world spiralled downward. We quickly converted a portion of our precious-metals inventory into what is now called Gallery Rodeo, a subsidiary of Heilig-Meyers Furniture."

Like many things Lee has become involved in, art, it could be argued, although unquestionably a passion, came about as chance encounter.

Fight for your life

Not much research is required to discover that Lee has mixed in some very illustrious circles, hobnobbing with - even in his formative years - some of the business world's most talented.

"That confidence and persistence that served me as a young boy gave me the courage to pick up the phone and call any CEO as often as it took. Bud Fox called Gordon Gekko 52 days straight," says Lee, once again alluding to the influence of films like Wall Street in his formative years. "Today, with the advent of LinkedIn, Twitter and Facebook, six degrees of separation is almost extinct. Everyone seems to be within reach. When I was starting in business, resources for information were limited to publications like Hoover's, Forbes and Fortune," he says.

Although his has thus far been a mostly successful career, Lee does have some scars from his stewardship, some very personal. "If you were to tell me in 1990 that I would lose 25 years of my personal life to this pursuit, I would have never believed you," he concedes.

"In the past decade, with a home in Bel Air and another in Florida, I was on a plane every two weeks. Since 2000, I calculated more than 500 flights and a little over a year of my time I spent on a jet. It becomes difficult to maintain relationships with family and friends, effectively living out of a suitcase for half of your life. It became apparent that texting from the jet centre of some airport was the most social interaction I had [that was] not work related."

If you were to tell me in 1990 that I would lose 25 years of my personal life to this pursuit, I would have never believed you.

As Lee expresses, he's not just the CEO of Grand Met but also the owner, which is a different role to that of the likes of Jack Welch, Michael Eisner or Tim Cook who "have to answer to shareholders and a board of directors". Being the owner is, he argues, a double-edged sword however. Although the pressures are "self-induced", the responsibility of the organisation and its direction falls solely on Lee.

"As CEO, I am simply the captain of the ship," he says. "Everyone else does all of the heavy lifting and hard work in keeping the engines running. I do my very best to attempt to navigate through treacherous waters and to see around corners as to the direction we need to be going. Obviously, the larger the ship, the harder it can become to turn."

But Lee acknowledges the role of CEO has changed since he first started out in business.

"If I were to walk into this position today, it would be overwhelming. But it has been a slow and steady layering process," he says. "I have noticed that many high-profile public CEOs seem to have a lot of free time on their hands to engage in outside ventures. Silicon Valley is wrought with them," he continues, citing some as he goes.

"Many of the Fortune 500 CEOs I have had the pleasure of either knowing socially or professionally take downtime very seriously. Many enjoy a minimum of an hour of exercise each day and focus on nutrition. In addition, an hour nap at midday helps to assuage stress and navigate through a day taking place in multiple time zones."

There is an abundance of books, lectures, videos, courses and other resources available to the modern CEO to better hone their skills and be as forward-thinking as possible, but Lee has one piece of advice he has learned during his more than 25 years in business.

"Today's CEO has to be prepared to fight as hard for his family and loved ones as he does for his company and employees. Private jets and hotel suites can be very lonely environments," he says.

His story does, however, raise a question: was fate on his side, leading him to be in the right place at the right time to take advantage of the opportunities in front of him, or was it his confidence and vision that were responsible for getting him there?

What else is in the portfolio?

Grand Metropolitan is a US multinational luxury-goods holding company founded in Beverly Hills, California. The group controls over 120 brand subsidiaries that have conducted more than $200 billion in revenue collectively since first establishment in 1787.

Many of its brands have been leading employers and institutions in their local communities, raising millions of dollars over the years for a variety of charities and causes. Some of Grand Metropolitan's subsidiaries include:

  • Finlay Enterprises (jewellery stores)
  • Heilig-Meyers Furniture (home furnishings)
  • Orcofi Holdings (luxury goods)
  • IMASCO (tobacco and spirits)
  • Caesar Golf Company (sports equipment)
  • The Bohle Company (public relations)
  • Serious Play Conference (technology).

CEO Vin Lee is also the owner of Gallery Rodeo and Parke-Bernet Gallery, The Beverly Hills Cigar Club and Beverly Hills Sports Car.
Gallery Rodeo (California) and Parke-Bernet (New York) collect fine art, including Picasso, Rembrandt, Renoir, Klimt and Rodin. The Rodeo Collection added Willem de Kooning in 2015.

Grand Metropolitan sponsors PGA Tour and NFL Super Bowl events, as well as various music/entertainment venue VIP lounges and brand expansion marketing campaigns. It also participates at the G20 Economic Summit, the World Economic Forum at Davos and the Milken Institute Global Conference in Beverly Hills.

In addition, Grand Metropolitan brands have hosted and sponsored events with NASCAR, Formula 1, Concours d'Elegance, Sturgis Motorcycle Rally and the Bike Week in Daytona Beach.

Vin Lee is an American businessman, art collector and philanthropist.