O.T. (last post relating to J. Peterman). By the way, what the #@*% is a "duster" ?
March 7, 1999
J.Peterman Founder Has Last Laugh
Filed at 2:05 p.m. EST
By The Associated Press
LEXINGTON, Ky. (AP) -- Even as he prepared for his company's expected
demise, sitting in an office filled with half-packed boxes and a pile of
unwanted clothes, John Peterman said he understood people finding humor in
the struggles of The J. Peterman Co.
This was a catalog company that, after all, started out by selling floor-length,
cowboy-style dusters and became most famous for being parodied on
''Seinfeld.''
So Peterman smiled at the ''Doonesbury'' strip in which two characters
discussed the bankruptcy filing of ''J. Pretensions,'' with one remarking as
she strolled through falling snow: ''Cold today ... Sure wish I had a nice,
warm duster!''
And he shrugged when The New Yorker offered its version of a Peterman
going-out-of-business sale, with used wastebaskets hyped in a satire of the
catalog's romanticized ad copy.
In the end, it was Peterman who had the last laugh. There will be no
going-out-of-business sale; a last-second buyer, Paul Harris Stores Inc. of
Indianapolis, appeared at a liquidation auction Friday and bought J. Peterman
for $10 million.
The purchase saved the catalog operation and at least 10 of the company's 13
stores.
''I'm quite happy,'' he said after the auction.
His relief contrasted with his resigned demeanor earlier in the week.
Asked if he was bothered by the gleeful edge to some of the coverage of J.
Peterman's struggles, the 57-year-old executive responded: ''That's human
nature'' and cited Theodore Roosevelt's words about the irrelevance of critics
to ''the man who is actually in the arena.''
'''His place shall never be with those timid souls who know neither victory
nor defeat,''' Peterman recited. ''I really and truly don't care what people
think and say about me,'' he said. ''Everybody's going to have an opinion.''
The one-time marketing executive started his business in 1987 by advertising
those trademark dusters in the back pages of The New Yorker and The Wall
Street Journal.
His subsequent catalog offered retro clothing and accessories, and
revolutionized the mail-order business with its lyrical, nostalgia-drenched
copy and drawings. The stylized prose and misty-eyed regard for the past
made J. Peterman an easy target for satire, but the company's true impact
can be seen in the scores of catalogs masquerading as lifestyle magazines that
now cram mailboxes.
Since his company sought protection from its creditors in a Jan. 25 filing
under Chapter 11 of the U.S. Bankruptcy Code, Peterman had not hesitated
to share his opinions, particularly about Heller Financial, the Chicago bank he
blamed for the filing. He refused requests by lawyers for the company's
creditors that he stop speaking publicly.
''My feeling was that I owe it to the customers and the people who like my
company that if things are going bad, John steps up and says things are going
bad,'' he said.
According to Peterman, the problems started last year after the launch of a
planned 70-store expansion.
When store openings were delayed, catalog sales slumped and a new home
furnishings catalog tanked, J. Peterman faced a cash crunch, he said. That
led first to layoffs, then to the bankruptcy filing.
Analysts said the expansion plan was overambitious.
A New York Post article even suggested that J. Peterman was cursed by the
end of ''Seinfeld'' last May.
John Peterman disputed those analyses. The aggressive expansion plan was
necessary to attract investors, he said. The stores that opened last year, he
said, were very successful, averaging annual sales in excess of $500 per
square foot, a figure widely considered the gold standard in the retail
industry.
The real problem, he said, was that Heller, the expansion plan's primary
lender, didn't have the stomach to handle the inevitable bumps in the road.
Peterman said the bank refused to approve routine waivers signed by store
landlords allowing the company to include in-store inventories as collateral,
panicked over normal complications and demanded an absurd level of
collateralization.
''It was a case of the best deal not being the best deal,'' he said. ''They are
articulately incompetent.''
Representatives of Heller did not return repeated calls seeking reaction to
Peterman's charges.
Within months, he said, the company and Heller were locked in a spiral of
mistrust that led the bank to restrict credit for J. Peterman, exacerbating the
company's cash flow problem.
And he said the bank refused to loan J. Peterman the money to purchase
spring inventory after the bankruptcy filing, making it harder to find a buyer
willing to keep the company going.
Earlier last week, while he was still preparing for his company's liquidation,
Peterman had refused to indulge in ''what if'' scenarios. He said he learned
not to do that when he played baseball, first at Holy Cross College in
Worcester, Mass., and then in the minor leagues.
''If you think about an error, the next ball hit to you, you're going to make an
error,'' he said.
Copyright 1999 The New York Times Company |
