— “It's not fun going bankrupt,” says John Peterman.
He should know. When his $75 million company went bust in 1999, he left a trail of pain that started with him and extended to his family, his employees and their families. Does he have regrets? Surely he must, but Peterman doesn’t dwell on them. The former Pittsburgh Pirates second baseman says he learned early on that “when you strike out or make an error, if you think about it, you're gonna do the exact same thing again. So I learned to forget about my mistakes.”
This attitude has helped the owner of J. Peterman Company start over again from scratch. “There were many lessons learned,” he says. No doubt that’s true, but why would he want to go back and reopen the same venture?
Aside from the determination to regain something lost, Peterman says: “I really didn't feel I knew how to do anything else as well as I knew how to do J. Peterman. And I felt that I understood the mistakes, and so, I figured I could do it again.”
Twenty-two years ago, Peterman began his Lexington, Ky.-based mail-order clothing business with a modest $500 out of pocket, an unsecured loan of $20,000 and a single item: a mystical-looking cowboy coat which he described as “a horseman’s duster.” It was an item which he originally bought for himself from a shop in Jackson Hole, Wyo., and for which he received many compliments. He added a few other items and then went ahead and created a catalog. It was a catalog that caught the eye of many high-end customers — and unintentionally broke all the rules of the business.
“I didn't even know the rules of the catalog business,” Peterman says. “I didn't know how to set up a warehouse. I didn't know how to set up an order entry system. I didn't know anything. But just did it. And learned as it went along.”
Lady luck must have been smiling because among his customers and admirers was the comedian Jerry Seinfeld and some of his producers. They decided to create a parody of Peterman and his company to include in their hit television show, “Seinfeld.”
“Although I don’t live in horse country, I wear this coat for other reasons,” Peterman wrote in his catalog. “Because they don’t make Duesenbergs anymore.” (If you’re running to Google “Duesenberg” right now, don’t bother. If you have to ask, this catalog isn’t for you!)
“Seinfeld” changed all that. The show's producers gave a copy of Peterman’s catalog to actor John O’Hurley and asked him to create a character that sounded like the way the catalog was written. O’Hurley, who had never heard of the catalog or Peterman, looked it over figured it out.
“So,” O’Hurley says, “I started leafing through the pages. And I realized this is the most unusual catalog I've ever seen. It was, like, these long Hemingway-style adventure stories about an Oxford button-down. And I was rather intrigued by it. And I thought he sounded a little bit like a '40s radio drama, combined with a bad Charles Kuralt.”
Thanks to his pitch-perfect comic timing and silky-smooth baritone voice, John O’Hurley introduced John Peterman and his exotic catalog to an estimated 85 million people a week. Peterman, for his part, thought the parody was a lot of fun. However, some in the company thought the show made him look like a buffoon and worried about the company’s image. But Peterman saw it differently: “You know, you're being parodied on the number one show on television. You're being given all of this publicity. How bad could that be?”
A company reborn
At first, it didn’t seem bad at all. The company was bringing in over $75 million in sales, outside investors were lining up and Peterman decided to build 15 brick and mortar stores around the country in addition to his catalog business. Things kept leapfrogging, and pretty soon he found himself in over his head. The faster it grew, the more cash was needed, and before he knew it, the company was bankrupt.
In his understated way, Peterman laughs softly and says: “At the time, it was a little stressful.”
At the final auction of company assets, he even lost the intellectual property rights to his own name: J. Peterman Co.
“It's very difficult for entrepreneurs to face reality,” he reflects, “or they wouldn't be entrepreneurs. They're used to living in a surreal world — of hope and dreams.”
And even after the dream was gone, the hope — at least in Peterman’s case — lived on.
Peterman’s story of ambition and survival didn’t end when the movers took away the company. He felt his vision was valid, even if his management of the company was not.
“I felt that I understood the mistakes and took ownership of the mistakes that were made. So, I figured I could do it again.”
By an accident of fate, he got the opportunity when the company that bought him out at auction in 1999, Paul Harris Stores, itself went bankrupt in 2001. One of the first people Peterman called was his now wealthy Hollywood TV double, O’Hurley.
O’Hurley remembers riding alongside Central Park in a limo when the call came through: “It was John on the phone. And he shouts into the phone, ‘I got the rights to the company back. You want to come in with me?’ ”
And Peterman remembers hearing O’Hurley shout back at him, “You betcha.”
While Peterman says he has no regrets about being given a second chance to own the company, there is also a bit of weariness in his voice. He likens it to his first trip to Paris, which was full of discovery and joy followed by a second trip years later.
“The lights,” he says, “are just a bit less bright. The sights are not as new, and the juice just isn’t as strong.” He’s keeping a keener eye on the bottom line these days, riding the brakes on growth and holding sales to a smooth $20 million (far lower revenues than the first time around).
It’s also clear that he’s not simply trying to replay the past. He’s brought in his son, Tim, as CEO, a staff of hot shot Web site developers and Gen-X marketers to grow the company into areas that didn’t even exist the first time around. They’ve developed a social networking site called “Peterman’s Eye,” which is fast becoming an off-beat adventure travel bulletin board and resource. They’ve also put effort into an online catalog, which offers not only the mail-order inventory but also has one-of-a-kind antiques.
While in many ways it’s the same Peterman who has retaken his company, he’s a little more careful about protecting the core business and the bottom line. He’s also relying on his gut instincts for developing innovations.
“When I have a new idea,” Peterman says, “and I tell somebody — if they look at me and they say, ‘Yeah, you know, that sounds pretty good,’ then I know it's not a good idea because it's not new. They have a frame of reference. If I look at 'em and I get this blank stare, like, ‘Oh, geez, he's crazy,’ then you might be onto a new idea, 'cause they have no frame of reference. Now, to carry that through, better have some guts.”
It’s that spirit which inspired business partner O’Hurley to help finance the rebirth of the J. Peterman Company. “He is as cantankerous as he is creative,” O'Hurley says. “And that's what has kept this brand alive for so long. It's what's kept him a fighter when the chips were down. It’s given him the fortitude to resurrect this company against all odds.”