Instead he would rule solely on the issue of trademarks

Instead he would rule solely on the issue of trademarks. It seemed clear to
him that this was a case of he-said, he-said. “We have here two conflicting
stories,” he said, “and it’s the opinion of this court that Blue Ribbon’s is the
more convincing.”
Blue Ribbon has been more truthful, he said, not only throughout the
dispute, as evidenced by documents, but in this courtroom. “Truthfulness,”
he said, “is ultimately all I have to go on, to gauge this case.”
He noted Iwano’s testimony. Compelling, the judge said. It would seem
Kitami had lied. He then noted Kitami’s use of a translator: During the
course of Mr. Kitami’s testimony, on more than one occasion, he interrupted
the translator to correct him. Each time Mr. Kitami corrected him in perfect
English.
Pause. James the Just looked through his papers. So, he declared, it’s
therefore my ruling that Blue Ribbon will retain all rights to the names
Boston and Cortez. Further, he said, there are clearly damages here. Loss of
business. Misappropriation of trademark. The question is, how to assign a
dollar figure for those damages. The normal course is to name a special
master to determine what the damages are. This I will do in the coming
days.
He slammed down his gavel. I turned to Cousin Houser and Strasser.
We won?
Oh my . . . we won.
I shook hands with Cousin Houser and Strasser, then clapped their
shoulders, then hugged them both. I allowed myself one delicious sidelong
look at Hilliard. But to my disappointment he had no reaction. He was
staring straight ahead, perfectly still. It had never really been his fight. He
was just a mercenary. Coolly, he shut his briefcase, clicked the locks, and
without a glance in our direction he stood and strolled out of the courtroom.
WE WENT STRAIGHT to the London Grill at the Benson Hotel, not far
from the courthouse. We each ordered a double and toasted James the Just.
And Iwano. And ourselves. Then I phoned Penny from the pay phone. “We
won!” I cried, not caring that they could hear me in all the rooms of the
hotel. “Can you believe it—we won!”
I called my father and yelled the same thing.
Both Penny and my father asked what we’d won. I couldn’t tell them. We
still didn’t know, I said. One dollar? One million? That was tomorrow’s
problem. Today was about relishing victory.
Back in the bar Cousin Houser and Strasser and I had one more stiff one.
Then I phoned the office to find out the daily pair count.
A WEEK LATER we got a settlement offer: four hundred thousand dollars.
Onitsuka knew full well that a special master might come up with any kind
of number, so they were seeking to move preemptively, contain their losses.
But four hundred thousand dollars seemed low to me. We haggled for
several days. Hilliard wouldn’t budge.
We all wanted to be done with this, forever. Especially Cousin Houser’s
overlords, who now authorized him to take the money, of which he’d get
half, the largest payment in the history of his firm. Sweet vindication.
I asked him what he was going to do with all that loot. I forget what he
said. With ours, Blue Ribbon would simply leverage Bank of California into
greater borrowing. More shoes on the water.
THE FORMAL SIGNING was scheduled to take place in San Francisco, at
the offices of a blue-chip firm, one of many on Onitsuka’s side. The office
was on the top floor of a high-rise downtown, and our party arrived that day
in a loud, raucous mood. We were four—me, Cousin Houser, Strasser, and
Cale, who said he wanted to be present for all the big moments in Blue
Ribbon history. Present at the Creation, he said, and present now for the
Liberation.
Maybe Strasser and I had read too many war books, but on the way to San
Francisco we talked about famous surrenders through history. Appomattox.
Yorktown. Reims. It was always so dramatic, we agreed. The opposing
generals meeting in a train car or abandoned farmhouse, or on the deck of an
aircraft carrier. One side contrite, the other stern but gracious. Then the
fountain pens scratching across the “surrender instrument.” We talked about
MacArthur accepting the Japanese surrender on the USS Missouri, giving the
speech of a lifetime. We were getting carried away, to be sure, but our sense
of history, and martial triumph, was underscored by the date. It was July 4.
A clerk led us into a conference room crammed full of attorneys. Our
mood abruptly changed. Mine did, anyway. At the center of the room was
Kitami. A surprise.
I don’t know why I was surprised to see him. He needed to sign the
papers, cut the check. He reached out his hand. A bigger surprise.
I shook it.
We all took seats around the table. Before each of us stood a stack of
twenty documents, and each document had dozens of dotted lines. We
signed until our fingers tingled. It took at least an hour. The mood was
tense, the silence profound, except for one moment. I recall that Strasser let
forth with a huge sneeze. Like an elephant. And I also recall that he was
begrudgingly wearing a brand-new navy-blue suit, which he’d had tailored
by his mother-in-law, who put all the extra material into the breast pocket.
Strasser, affirming his status as the world’s foremost antisartorialist, now
reached into his pocket and pulled out a long string of extra gabardine and
used it to blow his nose.
At last a clerk collected all the documents, and we all capped our pens,
and Hilliard instructed Kitami to hand over the check.
Kitami looked up, dazed. “I have no check.”
What did I see in his face at that moment? Was it spite? Was it defeat? I
don’t know. I looked away, scanned the faces around the conference table.
They were easier to read. The lawyers were in total shock. A man comes to a
settlement conference without a check?
No one spoke. Now Kitami looked ashamed; he knew he’d erred. “I will
mail check when I return to Japan,” he said.
Hilliard was gruff. “See that it’s mailed as soon as possible,” he told his
client.
I picked up my briefcase and followed Cousin Houser and Strasser out of
the conference room. Behind me came Kitami and the other lawyers. We all
stood and waited for the elevator. When the doors opened we all crowded
on, shoulder to shoulder, Strasser himself taking up half the car. No one
spoke as we dropped to the street. No one breathed. Awkward doesn’t begin
to describe it. Surely, I thought, Washington and Cornwallis weren’t forced
to ride the same horse away from Yorktown.
STRASSER CAME TO the office some days after the verdict, to wind things
down, to say good-bye. We steered him into the conference room and
everyone gathered around and gave him a thunderous ovation. His eyes were
teary as he raised a hand and acknowledged our cheers and thanks.
“Speech!” someone yelled.
“I’ve made so many close friends here,” he said, choking up. “I’m going to
miss you all. And I’m going to miss working on this case. Working on the
side of right.”
Applause.
“I’m going to miss defending this wonderful company.”
Woodell and Hayes and I looked at each other. One of us said: “So why
don’t you come work here?”
Strasser turned red and laughed. That laugh—I was struck again by the
incongruous falsetto. He waved his hand, pshaw, as if we were kidding.
We weren’t kidding. A short while later I invited Strasser to lunch at the
Stockpot in Beaverton. I brought along Hayes, who by now was working
full-time for Blue Ribbon, and we made a hard pitch. Of all the pitches in
my life, this might have been the most carefully prepared and rehearsed,
because I wanted Strasser, and I knew there would be pushback. He had
before him a clear path to the very top of Cousin Houser’s firm, or any other
firm he might choose. Without much effort he could become partner, secure
a life of means, privilege, prestige. That was the known, and we were
offering him The Unknown. So Hayes and I spent days role-playing,
polishing our arguments and counterarguments, anticipating what objections
Strasser might raise.
I opened by telling Strasser that it was all a foregone conclusion, really.
“You’re one of us,” I said. One of us. He knew what those words meant. We
were the kind of people who simply couldn’t put up with corporate
nonsense. We were the kind of people who wanted our work to be play. But
meaningful play. We were trying to slay Goliath, and though Strasser was
bigger than two Goliaths, at heart he was an utter David. We were trying to
create a brand, I said, but also a culture. We were fighting against
conformity, against boringness, against drudgery. More than a product, we
were trying to sell an idea—a spirit. I don’t know if I ever fully understood
who we were and what we were doing until I heard myself saying it all that
day to Strasser.
He kept nodding. He never stopped eating, but he kept nodding. He
agreed with me. He said he’d gone directly from our battle royal with
Onitsuka to working on several humdrum insurance cases, and every
morning he’d wanted to slit his wrists with a paper clip. “I miss Blue
Ribbon,” he said. “I miss the clarity. I miss that feeling, every day, of getting
a win. So I thank you for your offer.”
Still, he wasn’t saying yes. “What’s up?” I said.
“I need . . . to ask . . . my dad,” he said.
I looked at Hayes. We both guffawed. “Your dad!” Hayes said.
The same dad who’d told the cops to haul Strasser away? I shook my
head. The one argument Hayes and I hadn’t prepared for. The eternal pull
of the old man.
“Okay,” I said. “Talk to your father. Get back to us.”
Days later, with his old man’s blessing, Strasser agreed to become the
first-ever in-house counsel for Blue Ribbon.
WE HAD ABOUT two weeks to relax and enjoy our legal victory. Then we
looked up and saw a new threat looming on the horizon. The yen. It was
fluctuating wildly, and if it continued to do so it would spell certain doom.
Before 1972 the yen-to-dollar rate had been pegged, constant, unvarying.
One dollar was always worth 360 yen, and vice versa. You could count on
that rate, every day, as sure as you could count on the sun rising. President
Nixon, however, felt the yen was undervalued. He feared America was
“sending all its gold to Japan,” so he cut the yen loose, let it float, and now
the yen-to-dollar rate was like the weather. Every day different.
Consequently, no one doing business in Japan could possibly plan for
tomorrow. The head of Sony famously complained: “It’s like playing golf
and your handicap changes on every hole.”
At the same time, Japanese labor costs were on the rise. Combined with a
fluctuating yen, this made life treacherous for any company doing the bulk
of its production in Japan. No longer could I envision a future in which most
of our shoes were made there. We needed new factories, in new countries,
fast.
To me, Taiwan seemed the next logical step. Taiwanese officials, sensing
Japan’s collapse, were rapidly mobilizing to fill the coming void. They were
building factories at warp speed. And yet the factories weren’t yet capable of
handling our workload. Plus, their quality control was poor. Until Taiwan
was ready, we’d need to find a bridge, something to hold us over.
I considered Puerto Rico. We were already making some shoes there.
Alas, they weren’t very good. Also, Johnson had been down there to scout
factories, in 1973, and he’d reported that they weren’t much better than the
dilapidated ones he saw all over New England. So we talked about some sort
of hybrid solution: taking raw materials from Puerto Rico and sending them
to New England for lasting and bottoming.
Toward the end of 1974, that impossibly long year, this became our plan.
And I was well prepared to implement it. I’d done my homework. I’d been
making trips to the East Coast, to lay the groundwork, to look at various
factories we might lease. I’d gone twice—first with Cale, then with Johnson.
The first time, the clerk at the rental car company declined my credit
card. Then confiscated it. When Cale tried to smooth it over, offering up his
credit card, the clerk said he wouldn’t accept Cale’s card, either, because
Cale was with me. Guilt by association.
Talk about your deadbeats. I couldn’t bring myself to look Cale in the
eye. Here we were, a dozen years out of Stanford, and while he was an
eminently successful businessman, I was still struggling to keep my head
above water. He’d known I was struggling, but now he knew exactly how
much. I was mortified. He was always there at the big moments, the
triumphant moments, but this humiliating little moment, I feared, would
define me in his eyes.
Then, when we got to the factory, the owner laughed in my face. He said
he wouldn’t consider doing business with some fly-by-night company he’d
never heard of—let alone from Oregon.
On the second trip I met up with Johnson in Boston. I picked him up at
Footwear News, where he’d been scouting potential suppliers, and together
we drove to Exeter, New Hampshire, to see an ancient, shuttered factory.
Built around the time of the American Revolution, the factory was a ruin. It
had once housed the Exeter Boot and Shoe Company, but now it housed
rats. As we pried open the doors and swatted away cobwebs the size of
fishing nets, all sorts of creatures scurried past our feet and flew past our
ears. Worse, there were gaping holes in the floor; one wrong step could
mean a trip to the earth’s core.
The owner led us up to the third floor, which was usable. He said he
could rent us this floor, with an option to buy the whole place. He also said
we’d need help getting the factory properly cleaned and staffed, and he gave
us the name of a local guy who could help. Bill Giampietro.
We met Giampietro the next day at an Exeter tavern. Within minutes I
could see this was our man. A true shoe dog. He was fifty, thereabouts, but
his hair had no gray. It seemed painted with black polish. He had a thick
Boston accent, and besides shoes the only subject he ever broached was his
beloved wife and kids. He was first-generation American—his parents came
from Italy, where his father (of course) had been a cobbler. He had the
serene expression and callused hands of a craftsman, and he proudly wore
the standard uniform: stained pants, stained denim shirt, rolled up to the
stained elbows. He said he’d never done anything in his life but cobble, and
never wanted to. “Ask anyone,” he said, “they’ll tell you.” Everyone in New
England called him Geppetto, he added, because everyone thought (and still
thinks) Pinocchio’s father was a cobbler. (He was actually a carpenter.)
We each ordered a steak and a beer, and then I removed a pair of
Cortezes from my briefcase. “Can you equip the Exeter factory to turn out
these babies?” I asked. He took the shoes, examined them, pulled them
apart, yanked out their tongues. He peered into them like a doctor. “No
fucking problem,” he said, dropping them on the table.
The cost? He did the math in his head. Renting and fixing up the Exeter
factory, plus workers, materials, sundries—he guessed $250,000.
Let’s do it, I said.
Later, while Johnson and I were on a run, he asked me how we were
going to pay a quarter of a million dollars for a factory when we could barely
pay for Giampietro’s steak. I told him calmly—in fact with the calm of a
madman—that I was going to have Nissho pay for it. “Why on earth is
Nissho going to give you money to run a factory?” he asked. “Simple,” I
said, “I’m not going to tell them.”
I stopped running, put my hands on my knees, and told Johnson,
furthermore, that I was going to need him to run that factory.
His mouth opened, then shut. Just one year ago I’d asked him to move
across the country to Oregon. Now I wanted him to move back east again?
To work in close proximity to Giampietro? And Woodell? With whom he
had a very . . . complicated . . . rapport? “Craziest thing I’ve ever heard,” he
said. “Never mind the inconvenience, never mind the insanity of schlepping
all the way back to the East Coast, what do I know about running a factory?
I’d be in completely over my head.”
I laughed. I laughed and laughed. “Over your head?” I said. “Over your
head ! We’re all in over our heads! Way over!”
He moaned. He sounded like a car trying to start on a cold morning.
I waited. Just give it a second, I thought.
He denied, fumed, bargained, got depressed, then accepted. The Five
Stages of Jeff. At last he let out a long sigh and said he knew this was a big
job, and, like me, he didn’t trust anyone else to handle it. He said he knew
that, when it came to Blue Ribbon, each of us was willing to do whatever was
necessary to win, and if “whatever was necessary” fell outside our area of
expertise, hey, as Giampietro would say, “No fucking problem.” He didn’t
know anything about running a factory, but he was willing to try. To learn.
Fear of failure, I thought, will never be our downfall as a company. Not
that any of us thought we wouldn’t fail; in fact we had every expectation that
we would. But when we did fail, we had faith that we’d do it fast, learn from
it, and be better for it.
Johnson frowned, nodded. Okay, he said. Deal.
And so, as we entered the final days of 1974, Johnson was firmly
ensconced in Exeter, and often, late at night, thinking of him back there, I’d
smile and say under my breath: Godspeed, old friend.
You’re Giampietro’s problem now.
OUR CONTACT AT the Bank of California, a man named Perry Holland,
was very much like Harry White at First National. Agreeable, friendly, loyal,
but absolutely feckless, because he had rigid loan limits that were always well
below our requests. And his bosses, like White’s, were always pressing us to
slow down.
We responded in 1974 by mashing the accelerator. We were on pace for
$8 million in sales, and nothing, but nothing, was going to stop us from
hitting that number. In defiance of the bank, we made deals with more
stores, and opened several stores of our own—and continued to sign
celebrity athlete endorsers we couldn’t afford.
At the same time Pre was smashing American records in Nikes, the best
tennis player in the world was smashing rackets in them. His name was
Jimmy Connors, and his biggest fan was Jeff Johnson. Connors, Johnson
told me, was the tennis version of Pre. Rebellious. Iconoclastic. He urged me
to reach out to Connors, sign him to an endorsement deal, fast. Thus, in the
summer of 1974 I phoned Connors’s agent and made my pitch. We’d signed
Nastase for ten thousand dollars, I said, and we were willing to offer his boy
half that.
The agent jumped at the deal.
Before Connors could sign the papers, however, he left the country for
Wimbledon. Then, against all odds, he won Wimbledon. In our shoes. Next,
he came home and shocked the world by winning the U.S. Open. I was
giddy. I phoned the agent and asked if Connors had signed those papers yet.
We wanted to get started promoting him. “What papers?” the agent said.
“Uh, the papers. We had a deal, remember?”
“Yeah, I don’t remember any deal. We’ve already got a deal three times
better than your deal, which I don’t remember.”
Disappointing, we all agreed. But oh well.
Besides, we all said, we’ve still got Pre.
We’ll always have Pre.

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