(O.T.) J. Peterman Founder Is Fired
By TIM WHITMIRE
Associated Press Writer
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.
By the end of a rollercoaster week, J. Peterman was still in business, but John Peterman was out.
The company's founder and chief executive officer told The Associated Press on Sunday that he had been fired by the company's new owners, Paul Harris Stores Inc., which 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, but apparently not John Peterman's job.
''This whole thing has been such a rollercoaster that, actually, this didn't surprise me,'' Peterman said in telephone interview Sunday. ''We thought we had a miracle at the end, but I guess there are no miracles.''
The firing ended an up-and-down week for Peterman. During the interview in his office on Tuesday, he was resigned to his company's apparent demise.
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.''
On Friday, after Paul Harris rode in as a last-minute white knight, Peterman said he was looking forward to working with the new owners to take the company forward.
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.
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.
Representatives of Heller did not return repeated calls.
''It was a case of the best deal not being the best deal,'' he said. ''They are articulately incompetent.' |
