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When the shoes on the other foot Featured

10:06am EDT July 22, 2002

Why did you decide to sell your business yet remain its CEO?

We needed the money. Our revenues in 1993 were right around $50 million. I saw a huge opportunity to take it to what I believed would be in the $85 million to $100 million range within three years and we needed capital to do that. I tried the conventional ways to get capital∇banks, investment companies∇and no one was interested in extending credit at that time to shoe retailers.

I didn∏t leave, first, because I∏m not independently wealthy, so I needed a job. Second, I was the main attraction of the business. Third, people would have lost their jobs if I hadn∏t been here, and I would have had a guilty conscience.

What were some of the problems you faced working as an executive in a business you previously owned?

For 24 hours I had a major ego problem. [They] took the sign down that said Tishkoff Enterprises∇that hurt. As part of a larger, public company, I had a reporting responsibility that became political and, as such, was less attractive to me as time went on.

I shouldn∏t give the impression that life with J. Baker was all downside. They certainly invested a lot of capital in this company, and we went from $50 million to $125 million in the first full year. That part was good. After the first year, they decided they were going to get more interested in managing the business, which was interesting since we were making more money than any division they had. And the more they got involved, the less money they made.

What was the main difference between you and J. Baker?

We∏re very aggressive at retail. We go after the business. We try to satisfy our customer. Their philosophy was managing the business to maximize the return and forget the customer. It caused sparks because they certainly weren∏t going to change their philosophy for one division head.

What were the major adjustments for your employees when the business was sold?

This company has a family atmosphere. I don∏t think it∏s necessary to have a person go through 17 levels to talk to the president. My door is open. Under J. Baker that changed very quickly. Not in my office, but other offices around the building. I∏m not saying they were wrong; they were just wrong for this business.

Why did you decide to buy back the business and when did you start thinking seriously of a repurchase?

I saw the opportunity to become even larger, and in mid-1995 I decided to buy it. It became obvious to me that I was going to get fired because I was a real pain in the rear end. I could have retired, but I was too young to do that. Also, J. Baker∏s business got tough. They were going through a lot of strategy discussions and their expansion dollars were going in another direction.

It took two months to sell your business to J. Baker. Why did it take 18 months to buy it back?

We had to find the money. We talked to banks, insurance companies, investment companies. Then we got the funding from CHB Capital Partners, located in Denver. Negotiations were a tedious process. They had a board. They had to make sure they were serving the interests of the shareholders. I, on the other hand, was trying to make the best deal I could and I was still part of this executive committee. I had not resigned. I was still getting paid by them, but I was negotiating basically against them. So it was a fine line to tread.

What regrets do you have about having sold the business?

I don∏t have any regrets. I learned from it. I really don∏t look back.