Wild Company

by Mel Ziegler

  We began to take a look at the next layer of problems we faced: sizing, for instance, and the perennial paucity of merchandise for women.

  In the early days, when I worked in the Mill Valley store, our survival depended on selling what we had. Since the military consisted mostly of men, surplus didn’t include much in the way of women’s clothing. This made things more than a little tricky. Most of the customers who came into the store were female. In the go-with-what-you-got spirit, I relied on styling to adapt many of the men’s garments for women. Men’s shirts and some jackets were cinched at the waist with Gaucho or ammo belts. Fatigues were belted or worn lower slung on the hips with shrunken tank tops. Plus I had the prolific Anna, our sole seamstress, converting shirts into dresses and skirts as fast as we could sell them.

  But as we grew, a rotating cast of salespeople replaced me selling in the stores, some better at styling than others. In the catalogue, styling was next to impossible. Our illustrated format precluded showing live models wearing the clothes. We were losing countless sales and a big opportunity with the women’s market, which we now estimated to be about 60 percent of our customers. When women bought items for their boyfriends or husbands, as they did frequently, they always checked to see what we had in the Banana Republic style that they might wear. It was painful to disappoint them.

  We were also losing a huge number of sales because we rarely had a full range of sizes. This was slightly less of a problem in the stores, where both men and women could try on different sizes and see what worked. But in the catalogue side of the business, it resulted in more and more returns, many with notes from frustrated customers indicating that they loved the item, but it just didn’t fit.

  I had a vision for women’s romantic adventure clothing like the safari outfits Grace Kelly wore searching for gorillas in Mogambo, or Amelia Earhart wore on her airborne adventures. I was determined to find a way to design and manufacture these items ourselves. This new direction, of course, required time, money, and production expertise. The manufacturing side of the business pushed close to the limits of my professional amateurhood. I’d heard too many cautionary tales about the pitfalls in the process, the sometimes unexpected horrors of customs, or an entire line of a garment fitting incorrectly because of a mistake in the specs. One story circulating was about a company that sent a sample of a particular garment to be copied at a factory in Hong Kong. Somewhere along the way, the sample acquired a cigarette burn, and the order of several thousand garments came back months later with identical cigarette burns. We did not have the reserves to withstand such potential disasters.

  And there was one more reason to get into manufacturing, the one that had been disturbing me for quite some time: it would put behind us once and for all the issue of building a future on a nonrenewable resource. We began to envision the line and knew exactly what styles to make. We wanted to start producing it once we accumulated the necessary funds. Maybe it was time again to pay a visit to Fred back at the bank.

  It was going to be tricky to do. While we could see ourselves soon generating enough cash to initiate some manufacturing, we still hadn’t tamed the complicated mail-order logistics. Dennis faced the monumental task of digging us out of the labyrinth of mom-and-pop systems we had created in order to install more workable systems. The bigger we grew, the busier we became, the messier it got.

  Every day was another challenge. The stores were busy all of the time. Due to the ceaseless flood of orders generated by the catalogue, we had to ration the merchandise we sent the stores. A truck driver made the rounds between the Mill Valley and Polk Street stores and our warehouse on Townsend Street. One place was always short of an item that we had at another place. Having the barest of inventory controls, we didn’t have a clue that the truck driver was also delivering “free” merchandise to his friends until he’d made off with more than a $100,000 worth of it. We needed better systems, better inventory control, better supervision in the warehouse. Dennis was good, but he needed help.

  And other than newly hired Kevin, Mel and I still constituted the total creative department. Each catalogue had to have its own theme, every new item needed to be drawn, and there was the copy to write. That was just the start. Then came the typesetting, proofreading, tweaking color separations, attending the press check at the printer, renting lists—all of which we managed to get done while hiring, firing, and supervising everybody and double-checking to see that more bills weren’t paid twice, more orders weren’t shipped to the wrong address, more leather jackets weren’t being stolen. On top of that, the two of us were the buyers, the merchandisers, the accountants, the sales trainers, and the go-to people for whatever was going wrong somewhere in the business at that particular moment.

  Mel liked to say, “Where else can a liberal arts education be put to such good use?”

  Meantime, the phone never stopped ringing, with customers and developers begging us to put a Banana Republic in their town, journalists writing yet another article on the company, retailers who wanted to carry our line, department stores offering to give us stores within their stores. It was madness, but a good madness.

  We were becoming visible. In the retail business, that’s an invitation for others to copy. Designers were coming to the stores and scooping up one of everything. For what? Ideas? To ship to Hong Kong and have copied? Several customers told us that they’d been to our store in Mexico City, and it was horrible how we chained the live parrots to the wall. And still others complained about cotton pants, bought at our Laguna Beach store, that fell apart after one washing. Mexico City? Laguna Beach? No time even to call a lawyer.

  One of our favorite customers, Merritt Sher, a self-described maven of retail, a developer of shopping centers, found us very early on in Mill Valley. Every time he came to the store, he would banter for a few minutes and then say, “I want your store in my shopping center.”

  A tall, thin, puckish man with wiry gray hair, he always had a wildly mischievous glint in his eye. Because Merritt was so likable, it was my habit to laugh and say “Can’t right now,” just to be polite. But, in truth, I also had doubts about the shopping center he wanted to put us in, which was in a transitional Oakland neighborhood where I didn’t think we’d do as well.

  One day Merritt took the game to the next step.

  “I’ll pay to build the store for you.”

  I smiled.

  “I’ll give you six months’ free rent.”

  Good as that sounded, the location was a problem, and I didn’t want to be tempted. I decided to put an end to it.

  “Merritt,” I said, “we’d love to do something with you someday. But Oakland’s not for us, not at this time. We can’t even find enough merchandise for the business we already have. What we really need to do is concentrate on manufacturing our own line.”

  “Would you consider selling the company?”

  Wow. Did he just say that? Never occurred to me. Who’d want to buy it? What we do is quirky; the business depends on us. But is he serious? We take his check, and he takes the headaches? Really?

  I found myself thinking Ibiza. Never been there, but I liked the sound of it. I’d write novels, Patricia would paint. Lots of sexy people. Plenty of beaches and sangria. No worry about money again.

  I raised my eyebrows and smiled.

  “If you’re thinking of selling, you need to talk to Don Fisher,” Merritt said.

  “Who’s he?” I asked.

  “He owns The Gap,” Merritt said. “I’ll give him a call.”

  16

  Khaki, the Denim of the Eighties

  A few days later in the Polk Street store, Don Fisher, tall, balding, highly alert, in his late fifties, shook our hands. With him was Merritt, as well as Maury Gregg, his CFO, and Sam Gerson, his president. After a few words, they all strolled in different directions around the store. Don absorbed every inch of space as if he were a video camera. He looked closely at the clothing, seemed to read every word on the hangtags, studied
the walls in the dressing rooms that were papered with customer fan mail.

  Grinning, he held up a ridiculous-looking pair of blue-and-white cotton ticking Official Royal Navy swim trunks that fastened with ties on one side.

  “Do people actually wear these?” he asked Randi, our store manager.

  “I haven’t actually seen anyone brave enough to come out of the dressing room in them, but they are selling,” Randi replied with easy confidence, adding, “They are only as ludicrous as the Falklands War for which they were issued. A piece of history for six dollars.”

  With the exception of Sam Gerson, we all went down the block to a restaurant called Henry Africa’s: Don, Maury, Merritt, and Patricia and I.

  Maury started by pumping us with questions. How often did we turn our merchandise?

  “We haven’t calculated it,” I said, “but it seems like every month or six weeks.”

  Maury looked doubtful. “What are your gross margins?” he asked.

  That one I knew.

  “More than eighty percent.”

  “Oh, come on, you’re lying,” Maury said, attempting to be good-natured. “That can’t be.”

  I shrugged.

  “How do you plan your markdowns?”

  “Markdowns?” Patricia took this one. “We don’t mark anything down. If it doesn’t sell, we mark it up.”

  Don smiled at her comment. I’d read a bit about him. A bit of a scrappy start himself, although considerably better funded (old money San Francisco). He and his wife, Doris, opened The Gap’s original store in 1969 on Ocean Avenue in San Francisco with the idea of selling blue jeans and records. The name came out of the tumult of the times. “Generation gap” was a widely bandied term to describe the chasm between disaffected youth and their parents and “the establishment.” Don’s inspiration for the store came from his own experience of having a difficult time finding jeans to fit his tall and lanky frame. The records went with the generation gap, a cleverly coded lure to attract the youth. To secure his supply of jeans, he made a deal with the Haas family, descendants who owned Levi’s, also San Franciscans (old old money). Not long after opening his first few stores, he started selling private-label jeans and other private-label casual clothing to the youth market. By the time we met Don in late 1982, The Gap, today the world’s largest specialty retailer, had grown to five hundred stores across the country.

  I liked him. He spoke softly. He had a natural ease, a modest and unassuming manner, and seemed friendly. If he hadn’t been wearing a sport jacket and tie, and had I met him randomly, I easily could have taken him for a farmer—probably a big farm, though. The total lack of affectation was notable. I wondered whether his whole presentation could be a disarming affectation. But the humility was genuine. So were the brains, I’d learn.

  He was eager to share the story of how he’d licensed Ralph Lauren’s western wear line a few years earlier. “Unfortunately, we blew it,” he said, “because we got the sizing all wrong.” It seemed odd that he was telling us about the failed partnership. He did so in great detail, in an avuncular style that made conversation with him easy. Nonetheless, my wariness would not go away.

  Then came the questions, lobbed like court shots. What were our backgrounds? (Journalism and art.) Had we ever been in retail before? (No.) Where did we go to school? (Penn State undergraduate and Columbia University Graduate School of Journalism for me; University of California, Santa Barbara, for Patricia.) How had we financed the company so far? (Not easily.) Did we have kids? (Not yet.) More questions about the catalogue, the merchandise, the mailing lists, our sources, the concept, the customers.

  “Khaki is the denim of the eighties,” I blurted out at one point, not unaware that it was a tasty sound bite that a denim-of-the-sixties man could chew on.

  He lit up. Maury gave me a skeptical glance.

  “Your store is so creative,” Don said, more animated now. “Do you think you’ll be able to keep coming up with new ideas?”

  Keep coming up with new ideas?

  Of all the questions in all the world, there could not have been one more baffling to us than this one. Keep coming up with new ideas? Everybody doesn’t?

  “Ideas are not our problem,” I said.

  “What is your problem?”

  Patricia told him we needed to manufacture our own line; we could no longer meet the demand with surplus alone; we needed a broader line of products to fill out our safari image.

  Don sucked in every single thing we said. I could almost hear the information settle inside him. Click. Clunk. It was unnerving, but as someone who values the power of deep listening, I was also awed by it. The man was all ears. Of what use would he put the facts, tidbits, disclosures, and ruminations he was vacuuming out of us? We talked too much.

  And then, abruptly, he asked, “How much do you want for the business?”

  Now, that was a question, wasn’t it? You’d think we would have talked about it or at least thought about it beforehand. We hadn’t, probably because we didn’t believe he’d be interested in buying us. A New York Stock Exchange firm buying a Left Coast renegade company irreverently named Banana Republic? Was life imitating art?

  17

  Falling into The Gap

  It does pay to go to business school, or at least to get all the professional help you can find, if you ever consider making a business deal with a man like Don Fisher. He made an offer. Not surprisingly, it was for more money than we even dreamed of, probably because we weren’t dreaming of money.

  Game changer. Amalgamated Gigantic Inc. wants to buy Mom and Pop Clothing Co. We needed a lawyer.

  How does a writer go looking for an attorney? He asks another writer, of course. In this case, his Spanish Paratrooper Shirt–clad novelist friend, Herbert Gold.

  “Bernard Petrie,” Herb Gold said without hesitation. “You will love Bernard.”

  We adored Bernard. He embodied integrity, dignity, class—yet he was playful at heart. Purity isn’t a word you attach to many people, but it exuded from Bernard Petrie, though his modesty blinded him to this quality in himself.

  The story here requires a brief digression: Patricia and I are children of the 1960s. This tumultuous decade upended many lives, particularly those of us who were in our teens and twenties.

  All the news was bad: Vietnam; the assassinations of Martin Luther King Jr. and the Kennedys; American cities burning in race riots; police rioting at the 1968 Democratic Convention; antiwar demonstrations and draft resistance—all of it for the first time in history flickering on black-and-white television screens in our own living rooms. There was revolution on all fronts. In fashion, skirts shrank to mini. Bras were burned along with draft cards. New music from the Beatles, the Rolling Stones, Jimi Hendrix, and Bob Dylan challenged social norms. Drugs were hailed as mind-opening, peace-inducing cultural restoratives, with Yippies threatening to put LSD in city reservoirs. Students disrupted educational institutions in defiance of their long-standing social and political values. These events and others served as a powerful catalyst for a promising new “counterculture,” social resistance on a massive scale symbolized by flower children meeting guns, tanks, and police with flowers, love, and hope. “Don’t trust anyone over thirty” became the mantra of a new generation determined to invent a future free of the underpinnings of corporate greed and the “military-industrial complex.”

  Going into the 1960s was not how you came out of it, particularly if you were a kid. For me and Patricia, on opposite coasts and still to meet, the social upheaval came in our high school and college years. It shattered any plans our parents had for us of living conventional lives. In our minds, our futures became all about freedom, the freedom to disengage from the safe and suffocating middle-class consumer-driven existence we each found empty. We were determined to live life our own way; the last thing either of us wanted was orthodoxy in any form, particularly in our work, and we saw self-sufficiency as key. In this regard, our families had pointed us in the right di
rection. Patricia’s father worked three jobs and did all of the house and car maintenance himself. In high school, Patricia made her own clothes and worked in a department store after school and on weekends. My father worked twelve-hour days, six days a week, in his own wholesale business. I started taking odd jobs in high school, beginning with sweeping up a dress factory above one of the original Krispy Kreme doughnut shops in Scranton, Pennsylvania. With a newspaper route, other odd jobs, and money saved from working as a copyboy at the Scranton Tribune, I largely paid my own way through college.

  I graduated from Columbia in 1968 after the seminal spring uprising when students, chanting “the whole world is watching,” occupied several buildings on campus, including Low Library, where the encampment burrowed into university president Grayson Kirk’s office. Not quite sure whether I was one of the rebels or a journalist—New York magazine was just then being resurrected by founding editor Clay Felker, and I had been assigned to write some articles for the new publication—I tried and succeeded in eluding the police and making my way into Kirk’s office, hoping to report the story. (A few years ago, when I was cleaning out some old papers, I found a pile of Grayson Kirk’s business cards, which I had lifted from his desk.) My report of the Columbia uprising ran in The Miami Herald, which recruited me as a reporter. Later the Herald assigned me to be a feature writer for its Sunday magazine, Tropic, until I was lured back to New York by a former professor, the late journalist/sportscaster Dick Schaap, who was then founding his own publishing company. A few nonfiction books followed, one with flamboyant New York congresswoman Bella Abzug. But ultimately the dysfunctional New York of the late 1960s and early 1970s, with its stinky garbage strikes and dogs unrestrained from leaving their droppings on city sidewalks, lost its appeal. I traveled to San Francisco to visit a high school friend on a sunny February morning and knew instantly I had found home. Next stop was the San Francisco Chronicle, where I became a sort of “Our Man in Nirvana,” largely focusing on stories of the weird and wacky and wacked-out who gave the city its eccentric, free-spirited reputation. And then one day the most beautiful woman I’d ever seen walked into the city room, the new illustrator in the art department. Less than a year later the two of us walked out of there together to begin the adventure we now report.