I became fascinated with the garment industry. Owing to the dynamic nature of fashion, the industry had developed avenues for new products to reach consumers quickly. It was hard to predict which new style would catch fashion’s fickle eye, so there had to be means available for undercapitalized designers to produce and deliver their hot new looks to market. Consequently, the machinery of the free enterprise system kicked into gear for anyone who could snag an order from a strong retailer. Fabric suppliers would typically provide goods on sixty-days trade credit to allow time for the order to be produced, and financial institutions would factor (buy) the invoice to the store as soon as the goods shipped, providing the funds to immediately pay the mills and sewing factory, even though the retailers would not pay the invoice until a month or two later. I had never seen an industry in which someone could make a lot of money so quickly with such a small amount of capital to start with. The industry has changed a lot over the past thirty years, so it is much more difficult for a new clothing start-up to succeed today. But back then, my entrepreneur spirit could not resist the siren call of large, fast profit.

My analytical mind engaged in finding problems in the industry, knowing that I would create value if I could find solutions. I identified three major challenges: 1) fashion is fickle, so what is hot today may be worthless tomorrow; 2) the margins are very thin unless you have strong logo appeal, and it typically takes good connections or millions of dollars to create this logo appeal; and 3) success can lead to failure because major retail chains often overbuy styles that are selling at high margins in the boutique stores and then slash prices once the sales volume slows down. I missed the fourth problem: whatever can make quick money attracts unethical people.

My solution was to avoid the fickle nature of fashion and stick with denim, which was just beginning to attract fashion designers. Jordache had recently spent millions of dollars on an ad campaign to launch their sexy, tight-fitting jeans. I didn’t have that type of money to risk up front, so I decided to license a recognized logo and pay royalties after the clothes sold. A salesman mentioned that he felt college logos would find their way off campus onto Main Street. He was right. A couple of years later, J.C. Penney and other major retailers started carrying college logo merchandise. So I created the company Student Body Jeans and set about licensing all the major college logos in the country for use on denim jeans, shorts, and jackets. I ended up with licenses from over sixty major universities. You name the school and I had the license: USC, Notre Dame, Harvard, Kentucky, Alabama, et cetera. Licensing college logos also solved the industry problem of overdependence on major retailers. College bookstores sell a lot of merchandise and provide a third leg to stabilize the garment market, which typically rested on boutique stores and department stores.

All I needed was to find a “garmento” who could produce the goods. I met a number of fascinating individuals. One of them was Stanley Foster, who owned the famous Hang Ten logo. He told me the fascinating story of his success. He was managing a furniture store when he married into the Ratner family, who owned the largest clothing company west of the Mississippi. After working in the family men’s suit business for several years, he became the president when his father-in-law retired. Soon after, he told his father-in-law that he had just purchased a clothing company for three million dollars. His father-in-law said, “Great, let’s go see the factory.”
Stan replied, “There is no factory.”

“OK, let’s go to the warehouse to see the inventory.”
“There’s no warehouse.”
“Well, what did you buy?”
Stan Foster held up the Hang Ten logo.

At this point in the story, Mr. Foster chuckled and told me that his father-in-law wondered how his daughter could have married such an imbecile and how he himself could have been such an idiot as to put him in charge of the company. Mr. Foster soon got his payback, earning several times that amount the first year and building the business into a $200 million retail juggernaut. Mr. Foster knew how to spot trends and understood the value of leveraging a strong logo across multiple market categories. He seemed to like me and was interested in getting his son-in-law involved in my venture, but nothing materialized.

I eventually hired a garmento in New York for $15,000 a month (about $50,000 in 2022 dollars) to be in charge of the production. I worked with pattern makers and fit models to design great-fitting fashion jeans, shorts, and awesome-looking jackets with the school’s logo embroidered on the back. I rented a showroom in the denim section of Los Angeles’s Fashion Mart and hired an experienced salesman. We were up and running with orders flowing in.

However, the garmento disagreed with my whole marketing strategy. He felt our products were so good that we should be selling them exclusively in university bookstores for three times the price. I insisted that our target market was the general public loyal to their alma mater or local university and that we needed to keep the price down to attract this larger market. He didn’t see my vision, so he surreptitiously started his own company, Student Union Jeans, and took copies of each of our embroidery tapes that I had spent over $100,000 to produce and our patterns, raised $2 million from investors, and started to market to the bookstores.

Of course, once I discovered what was happening, I canned him. When I confronted him and reminded him of the confidentiality/noncompete agreement he signed, he laughed and said that if I sued him, by the time my lawsuit was over, he would have made millions and hidden all of it, and I wouldn’t see a dime. I realized I didn’t have the time or resources to become embroiled in a lawsuit because I had orders to fill with cancellation dates staring me in the face. My greatest concern was that I was left without any production as all the factories had long-standing relationships with this scoundrel.

I immediately contacted the local denim factories in Los Angeles and negotiated orders for them to fill. Unfortunately, they recognized a desperate novice when they saw one, and instead of producing the goods on schedule, they raised the price and delivered late. Without shipments, I had no cash flow, and my reserve was running out. I should have scaled back and selected half a dozen popular schools to concentrate on, but my pride would not allow me to cancel orders from across the country, creating a void for my nemesis to fill.

I sold our three rental properties to buy time, but it was not enough. Everything started falling apart, and I realized that we were not going to make it. I confided my situation to the manager of a showroom down the hall who had been friendly with me. He said that our product was too good to let it die and suggested that I talk with his brother, the owner of Braxton Jeans, which he sold in his showroom. He, however, was not on speaking terms with his brother, so he needed a way to introduce me. He introduced me to Mr. Miller, the retired president of Marshalls Department Store. Mr. Miller concurred that we had a good product with a viable market and agreed to introduce me to Peter Ma, the owner of Braxton Jeans, who he had a close relationship with. Mr. Miller was the first person to give Peter an order, which launched his successful career in the apparel industry.

After I met with Peter and told him my story, he shook his head and said, “You are too nice of a guy to make it in the garment industry. You should stick with finance and real estate, which you know best, and leave the garment industry to people like me. By the way, I am looking at buying a number of commercial properties out of bankruptcy from the owner of Pioneer Chicken. I will pay you to check them out.” And so, a new chapter of my life began as a financial consultant to Mr. Ma. Even though Peter did not always follow my advice―I was too conservative for him―he valued my input.

By this time, I was broke and our home was in foreclosure. On one occasion, I decided to drive to Los Angeles to ask Peter to pay me for some work, knowing that I did not have enough money to buy gas to return home if I didn’t get paid. So I brought a squeegee with me just in case I needed to wash car windows for tips at a service station to buy gas.

This was a very difficult time financially. It was particularly hard on my wife, who depended on me to provide for her and our six young children. She and her brother and sister were raised in a nine-hundred-square-foot home by their frugal widowed mother on Social Security and veteran benefits, who managed to save enough money to send her three children to college. Our boom-or-bust life was foreign to her steady, reliable upbringing, but she supported me emotionally as best she could.

We were able to find a buyer for our home before the scheduled foreclosure, so we needed to find a new place to live. Driving from Escondido, in San Diego County, to Los Angeles on a regular basis was time consuming. So we looked in various LA suburbs but couldn’t find anything we felt comfortable renting. One morning I told Jean that I got a good feeling when I drove by Mission Viejo in Orange County on my way home from Los Angeles and suggested we check it out, even though it was still quite a distance from downtown Los Angeles.

We took our two youngest sons, who were not in school, and drove up to Mission Viejo in our rundown Oldsmobile to find a house. The first house we looked at had just been remodeled with white carpet and white flat paint. We were sure they would not even consider renting to us when we told them we had six children, and I knew our credit was ruined. After driving around looking at several rentals all day, I asked Jean if she felt good about any of the houses we had looked at. She said, “Yes, the first one.” So we drove back to see if they would rent us the home. The wife answered the door, looked at us, and said, “Just a minute.” She turned and yelled to her husband in the other room, “Hang up the phone! That nice couple has come back. Don’t rent the house to those other people.”

Losing our fortune and being destitute and nearly homeless turned out to be among the greatest blessings of our life. We would not have moved from Escondido to Mission Viejo without this financial catastrophe. God picked us up and sat us down in this specific house for our children’s eternal welfare. Mission Viejo was a community full of families with a lot of parental support and active religious participation. In large part as a result of this parental support, the high school received the United States Department of Education’s highest award for excellence three times while our children attended there. The high school’s football team was ranked second in the nation when our son played on the team. Its band, drumline, color guard, choir, drama, Academic Decathlon and Model United Nations teams often competed for top national positions. Each year several dozen students graduated with the honored International Baccalaureate diploma. Unlike in Escondido, where most of the youth struggled with large problems, in Mission Viejo, most of our children’s friends were well adjusted. When the teenagers in our church congregation presented a high-quality original musical, they had nearly one hundred youth involved onstage. Thanks to hours of sacrifice by many men and women in the community, our four sons earned the rank of Eagle Scout. Without hesitation, I can say that this was the best place in the world for us to raise our family. Sometimes God needs to hit us on the head to get us to move so that we will receive the blessings he offers us.

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