--From the J. Peterman catalog, fall 1998
In the fantasy-filled, you-can-have-it all '90s, John Peterman was the ultimate purveyor of armchair-adventure shopping. His floridly written catalog pulled in a cult following--and $75 million a year in sales--by hawking evocative clothing, furniture and collectibles to upscale shoppers. Peterman outfitted Frank Sinatra and Oprah Winfrey and got a priceless p.r. boost when the TV megahit Seinfeld parodied him on its show.
Blessed with this free publicity and a vision of a billion-dollar future, Peterman seized the initiative--and drove his company straight to hell. His rapid, venture capital-fueled overexpansion led the company into bankruptcy in 1999 and sent Peterman spiraling into what he calls "my perfunctory six weeks of depression."
Now the man in the floor-length cowboy coat ($184) is back with a reissued catalog and even grander designs on the future--although this time he won't be in a mad rush. Peterman, 59, hopes to make his new, slimmed-down sales book the core of a licensing empire that will put the J. Peterman brand on all things "wondrous, authentic and excellent," from African safaris to limited-edition autos. "By staying focused and carefully building up the brand," he says, "we can become a multihundred-million-dollar-a-year company in a relatively short period of time: five years."
Of course, reviving a failed venture is dicey at any time--nearly a third of bankrupt companies undergo multiple reorganizations--let alone during the sharpest economic slowdown in a decade. And too much licensing can kill even the toniest brand's cachet, as overexposed names from Calvin Klein to Gucci can unhappily attest.
But Peterman senses an advantage: his name is already known to some 40 million people, including the 32 million viewers who saw him portrayed on Seinfeld, which is still in reruns. "It can cost $1 billion to build a brand," says actor John O'Hurley, who played Peterman as "a FORTUNE 500 lunatic" on the show. "And this brand occupies a unique niche already." Sounds like a real CEO, doesn't he? In fact, O'Hurley has since become a partner in Peterman's reborn company.
Peterman has targeted that niche since the mid-1960s, when he hung up his baseball glove after three years as a minor-league second baseman for the Pittsburgh Pirates. He bounced from one sales-management job to another for employers such as General Foods and Dole. In 1984 he started a business that diagnosed the problems of sick house plants by mail and wangled his first bit of free publicity when he appeared on Good Morning America to promote it. That company soon wilted (Was there an omen there regarding free p.r.?), forcing him to look for something else.
He found it at an outfitter's shop in Jackson Hole, Wyo.: the trademark cowboy coat that he bought for himself, which was included in his first catalog, launched in 1987. The catalog had already become a Hollywood favorite when its kitschy prose--initially written by Manhattan marketing consultant Don Staley--caught the eye of comedian Jerry Seinfeld and Seinfeld co-creator Larry David, who owned some Peterman clothes. "We used to laugh about it all the time," David says of the prose. "When I knew we had to get Elaine [the character played by Julia Louis-Dreyfus] a new job, I thought the guy who wrote this kooky stuff would be great for her to work for."
Peterman learned that he had become a TV character only after the first episode aired, but he didn't mind being portrayed as "a buffoon and a bore." Indeed, he was later allowed to review scripts that included his character six weeks in advance--but he never changed a word. "For the long term, this was good for the brand name and the company," Peterman says, despite the fact that "most people who saw the show didn't know we were a real company." Nor did Peterman advertise to tell them.
By the late '90s, Peterman's expansion plans got out of control. His catalogs bulged with more than 100 pages--up from an initial seven a decade earlier. He added 10 J. Peterman stores in 1998. His five-year business plan called for 70 by 2002, the buildup topped with an ipo. "I took my eye off the brand focus and put it on rapid retail expansion," he recalls. "That was my mistake."
It was a classic one--trying to get too big too fast--that would be repeated ad infinitum by the overfunded dotcoms of the new century. The frantic development diluted the appeal of the Peterman brand and layered new costs onto the company. "This business was highly profitable at $48 million [in sales] a year," Peterman says, "but when we started to push beyond that, it wasn't so profitable." The new merchandise required more buyers and stockers, more inventory and more cash tied up in warehouses. "If I had been really smart, I'd have slashed items and overhead and rolled out the stores more slowly," he adds. "But with venture capital, no one's interested in slow development."