Right now he was in the midst of making that very point. “I mean, how the fuck are we gonna grow this company, Steve, if you won’t let me place orders for the fucking shoes? Come on, Jordan, you know what I’m talking about! How the fuck can I build”— Shit!The Spitter’s Bs were his most deadly consonant, and he just got me in the forehead!—“relationships with the department stores when I don’t have product to deliver?” The Spitter paused and looked at me quizzically, wondering why I had just put my head in my hands and seemed to be smelling my own palms.
I rose from my chair and walked behind Steve, in search of spit protection, and said, “The truth is I see bothyour points. It’s no different than the brokerage business: Steve wants to play things conservative and not hold a lot of shoes in inventory, and you want to step up to the plate and swing for the fences so you have product to sell. I got it. And the answer is—you’re both right and both wrong, depending on if the shoes sell through or not. If they do, you’re a genius, and we’ll make a ton of money, but if you’re wrong—and they don’t sell through—we’re fucked, and we’re sitting on a worthless pile of shit that we can’t sell to anyone.”
“That’s not true,” argued the Spitter. “We can always dump the shoes to Marshall’s or TJ Maxx or one of the other closeout chains.”
Steve swiveled his chair around and said to me, “John’s not giving you the whole picture. Yeah, we can sell all the shoes we want to people like Marshall’s and TJ Maxx; but then we destroy our business with the department stores and specialty shops.” Now Steve looked the Spitter directly in the eye and said, “We need to protect the brand, John. You just don’t get it.”
The Spitter said, “Of course I get it. But we also have to growthe brand, and we can’t grow the brand if our customers go to the department stores and can’t find our shoes.” Now the Spitter narrowed his eyes in contempt and stared the Cobbler down. “And if I leave this up to you,” spat the Spitter, “we’ll be a mom-and-pop operation forever. Fucking pikers, nothing more.” He turned directly toward me, so I braced myself. “I’ll tell ya, Jordan”—his spitball missed me by ten degrees—“thank God you’re here, because this guy is such a fucking pussy, and I’m sick of pussyfooting around. We got the hottest shoes in the country, and I can’t fill the fucking orders because this guy won’t let me manufacture product. I’ll tell you, it’s a Greek fucking tragedy, nothing less.”
Steve said, “John, do you know how many companies have gone out of business by operating the way you want? We need to err on the side of caution ’til we have more company-owned stores; then we can take our markdowns in-house,without bastardizing the brand. There’s no way you can convince me otherwise.”
The Spitter reluctantly took his seat. I had to admit I was more than impressed with Steve’s performance, not just today but over the last four weeks. Yes, Steve was a Wolf in Sheep’s Clothing too. Despite his outward appearance, he was a born leader—blessed with all the natural gifts, especially the ability to inspire loyalty among his employees. In fact, like at Stratton, everyone at Steve Madden prided themselves on being part of a cult. The Cobbler’s biggest problem, though, was his refusal to delegate authority—hence, his nickname, the Cobbler. There was a part of Steve that was still a little old-fashioned shoemaker, which, in truth, was both his greatest strength and his greatest weakness. The company was doing only $5 million right now, so he could still get away with it. But that was about to change. It had been only a year ago that the company was doing a million. We were shooting for $20 million next year.
This was where I’d been focusing my attention over the last four weeks. Hiring Gary Deluca was only the first step. My goal was for the company to stand on its own two feet, without either of us. So Steve and I needed to build a first-class design team and operational staff. But too much too fast would be a recipe for disaster. Besides, first we needed to gain control of the operations, which were a complete disaster.
I turned to Gary and said, “I know it’s your first day, but I’m interested to hear what you think. Give me your opinion, and be honest, whether you agree with Steve or not.”
With that, the Spitter and the Cobbler both turned to our company’s new Director of Operations. He said, “Well, I see both your points”— ahhh, well done, very diplomatic—“but my take on this is more from an operational perspective than anything else. In fact, much of this, I would say, is a question of gross margin—after markdowns, of course—and how it relates to the number of times a year we plan on turning our inventory.” Gary nodded his head, impressed with his own sagacity. “There are complex issues here relating to shipping modalities, inasmuch as how and where we plan to take delivery of our goods—how many hubs and spokes, so to speak. Of course, I’ll need to do an in-depth analysis of our true cost of goods sold, including duty and freight, which shouldn’t be overlooked. I intend to do that right away and then put together a detailed spreadsheet, which we can review at the next board meeting, which should be sometime in…”
Oh, Jesus H. Christ!He was drizzling on us! I had no tolerance for operational people and all the meaningless bullshit they seemed to hold so dear. Details! Details!I looked at Steve. He was even less tolerant than me in these matters, and he was now visibly sagging. His chin was just above his collarbone and his mouth was agape.
“…which more than anything else,” continued the Drizzler, “is a function of the efficiency of our pick, pack, and ship operation. The key there is—”
Just then the Spitter rose from his seat and cut the Drizzler off. “What the fuck are you talking about?” spat the Spitter. “I just wanna sell some fucking shoes! I couldn’t give two fucks about how you get them to the stores! And I don’t need any fucking spreadsheet to tell me that if I’m making shoes for twelve bucks and selling them for thirty bucks then I’m making fucking money! Jesus!” Now the Spitter headed directly toward me with two giant steps. Out of the corner of my eye I could see Steve smirking.
The Spitter said, “Jordan, you gotta make a decision here. You’re the only one Steve will listen to.” He paused and wiped a gob of drool off his round chin. “I want to grow this company for you, but my hands are being tied behind my—”
“All right!” I said, cutting off the Spitter. I turned to the Drizzler and said, “Go ask Janet to get Elliot Lavigne on the phone. He’s in the Hamptons.” I turned to Steve and said, “I want Elliot’s take on this before we make a decision. I know there’s an answer to this, and if anyone has it it’s Elliot.” And, besides, I thought, while we’re waiting for Janet to put him through, I’ll have a chance to tell my heroic story again.
Alas, I never got the chance. The Drizzler was back in less than twenty seconds, and a moment later the phone beeped. “Hey, buddy, how ya doing?” said Elliot Lavigne through the speakerphone.
“I’m good,” replied his hero. “But, more important, how are youdoing, and how are your ribs feeling?”
“I’m recovering,” replied Elliot, who’d been sober for almost six weeks now, which was a world record for him. “Hopefully, I’ll be back to work in a few weeks. What’s going on?”
I quickly plunged into the details, careful not to tell him whose opinion stood where—so as not to prejudice his decision. Ironically, it made no difference. By the time I was done, he already knew. “The truth is,” said the sober Elliot, “this whole idea of not being able to sell your brand to discounters is more hype than reality. Every major brand blows out their dead inventory through the discount chains. It’s a must. Walk into any TJ Maxx or any Marshall’s and you’ll see all the big labels—Ralph Lauren, Calvin Klein, Donna Karan, and Perry Ellis too. You can’t exist without the discounters, unless you have your own outlet stores, which is still premature for you guys. But you have to be careful when you deal with them. You sell them in blips, because if the department stores know you’re there on a consistent basis, you’re gonna have problems.”