In 1981, two years after Rosa moved to the U.S., Margarita filed for divorce,
ending 22 years of marriage. At first Mow's daughters resented him. "For
girls the father is probably guilty until proven innocent," he says. The fact
that they both now work for him, he feels, shows that they have forgiven
him.
In the same year Mow ended his relationship with Buchthal. "I got the
courage to buy him out," he says. "He took $2,000 [the amount he had
invested] and ran." Buchthal had spent lavishly on his trips while failing to
live up to his billing as someone who understood the garment industry.
"We had lost all the money," Mow says. "The bank had stopped paying
interest and were closing in. I think he realized he wasn't going to get
anything else out of the company." The company now officially became Bugle
Boy.
Mow approached Vincent Nesi, then Bugle Boy's designer. "I'm gonna close
down unless you take charge of sales and marketing," Mow told him. After
some thought Nesi accepted on the condition Mow agree to let him cut Bugle
Boy's line back down to just pants. Mow saw the wisdom of Nesi's suggestion.
"We were trying to be too many things to too many people."
It took Bugle Boy a year to clean out the old inventory and convert its line.
The strategy worked. From May through August, 1981 the company sold
$960,000. By the following spring sales totaled $2.6 million. For the first
time Bugle Boy was profitable, earning $200,000. "We had done $3.5 million
the year before but there were no profits." For the next two years the
company stayed profitable while growing at a breakneck pace.
In 1983 Mow implemented a strategy that proved successful and became the
company's guiding principle--giving more value at each of the price points in
which Bugle Boy competes. "We now have six price points between $20 and
$50. We provide the best value in every one of them. What Generra sells
for $45, we sell for $25."
In fiscal 83 (the year ending April, 1983) Mow's total volume shot up to $18
million, of which half was attributable to Dragon International's sales to other
companies. Starting that year Mow gave Nesi a $1.5 million bonus paid out
over the next five years with which to buy a 10% interest in Bugle Boy. To
this day Nesi owns 10% while Mow retains 90%. Using the industry multiple
of one times sales, Mow values BBI at $500 million.
In fiscal 84 gross sales more than doubled to $43 million. Bugle Boy was
growing out of control. The inevitable crash came in the form of the
much-publicized parachute pants disaster. BBI made the mistake of grossly
overproducing its hot-selling parachute pants. By August 84 the market for
that product started collapsing. BBI ended up dumping its huge inventory of
parachute pants for 25 cents apiece. By the end of the year the company had
a $5 million negative net worth.
"Fortunately, we didn't really know the extent of our losses until we were
pulling out of it," Mow says. "By the time [Itohman, a Japanese trading
company that extends credit to Bugle Boy, and the banks] got the statement
we were already pulling out."
The parachute pants disaster happened just as Mow was getting married to
Rosa. "The disaster was Vinnie's gift to us," Mow says. "We can joke that way
because Vinnie and I are like brothers. We have to live with each other's
mistakes as well as successes. Together we harmonize the whole
company."
By November Bugle Boy had a hot new line--cargo pants made of pigmented
canvas. That line was the only hit of the 84 Christmas season, an otherwise
dismal time for the apparel industry. "We went from a total disaster to a
total success," Mow says. That success came just in time to keep the company
from going under but wasn't enough to offset the parachute pants disaster.
For fiscal 85 the company lost $5 million on a volume of $80 million.
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