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Thursday, February 26, 2009

Someone else who gave back instead of keeping it all for himself
Posted by Jill | 4:21 AM
In Tuesday night's speech, Obama gave a shoutout to banker Leonard Abess, who took the proceeds from cashing out of the bank he ran and sent a bonus to everyone who worked, or had ever worked, for him. Here's another businessman whose heart is in the right place. I don't know if these stories about Jewish businessmen are coming out as a kind of counter to Bernie Madoff, but given people's tendency to take one story, or even two or three, and paint an entire group with that brush, it's certainly welcome.
The way Martin Samowitz sees it, he had 94 very good reasons to stay out of the shoe business and one good reason to get back in.

The 94 reasons are the number of years since he was born in Queens. The one reason to return is the chance to give some of his former employees their jobs back.

Samowitz founded the Marty's Shoes discount shoe chain, opening the first Marty's in Little Ferry in 1974. The chain, which was bought by a private equity firm in 2006, filed for bankruptcy in September. Samowitz is working with former Marty's chief executive officer John Adams to resurrect Marty's Shoes.

Samowitz's first shoe chain, Perry's, died after an ill-advised merger with a conglomerate that went bankrupt. By 1997, Marty's had grown to 70 stores, with sales of more than $70 million, and had made Samowitz a millionaire many times over. Samowitz, then 82, had no children and no heirs and "gifted" the chain by canceling a $5 million debt the company owed him. He then invited 11 managers to become stockholders in the company, and turned the day-to-day operations over to Adams.

In 2006, the stockholders and Samowitz decided to sell the majority stake to private-equity firm J.P. Capital. Part of the payout was withheld in the form of three-year notes, but before those notes could be paid off, Marty's — loaded with debt and facing a slowing economy — went under, liquidating the 47 remaining stores.

[snip]

Q. Why are you going back in business?

We don't have to – I have enough aggravation in Florida with golf and running around. But it's an absolute crime, what happened to the people that were with Marty's Shoes for 20, 25 and 30 years. Now John [Adams] personally tried to hold up the other company, but he was not the boss, he was not the owner, he was not giving directions. He put his own money in, which is lost. He put his own money in because he was trying to save the company for the employees. That was the principal reason.

John came out of the sale with enough money that he could retire, except he was a little too young to retire.

The new company – I was very impressed with them. They were Ivy League graduates. But they were from California. I should have known. When I said to them, "You're moving to New York or New Jersey, right?" he said, "No." I said, "Why not? Who's going to run the company?" He said, "You don't understand, Marty. We do it from the computer." I said to myself, Well, maybe I'm old-fashioned. I'm used to going into a store and patting a stock boy on the back and saying, "Hello. How are you? Good to see you again." But they thought that was totally unnecessary.


Oh, and by the way? Samowitz is 94. What's going to happen to this country when retailers like him; the guys who cut their teeth on retail in the days of personal service, die off and we're left with nothing but the equity companies?

I was a Marty's customer, and losing the chain was a "Where the hell am I going to buy shoes?" moment. I'm not one of these Evita-types who has to have 20 pair of fabulous spike-heeled Jimmy Choos. I'm the kind who will buy a dozen pair of the same kind of loafers simply because they fit and they're comfortable. For me, the return of Marty's is cause for celebration for that reason. But for the people who worked there who will undoubtedly be first in line for the new jobs, it could very well be a new lease on life.

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1 Comments:
Blogger Bob said...
I wondered what had happened to Marty's, There, then suddenly not there. The two stores I patronized were like individual discount outlets, although I knew they were part of a large chain, I always found name brand sneakers at a good price.
2/26/09, 3:56 PM  
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