What are the chances of being swept into two separate businesses at the same time with two Jewish Russians, both named Anna? Thank goodness their surnames differed.
It was an experience from hell.
According to George Bernard Shaw, “ Youth is wasted on the young.”
At twenty-six, I was a Chartered Accountant with an IQ of 200+ and enough know-how to fill the Empire State Building.
I was infallible.
My new business partners were Anna S., a whizz at selling luxury shoes and Anna L., a divine cook with daily lineups to her door.
What could go wrong?
I met Anna S. while working as a part-time bookkeeper for Pattie- a socialite in her 60s, who was currently on her third husband. His predecessors had all been multimillionaires who had died young, leaving her their fortunes and no kids. Pattie’s current man was worth more than the previous husbands put together. He doted on her, giving in to her every whim.
Bored with her round of ladies’ lunches and fed up with not finding her favourite kind of shoes in Calgary, Pattie inveigled her husband into coughing up $400,000 to open a 1,500-sq-foot ladies shoe store in Mount Royal Village, home of the crème de las crème of luxury stores. Pattie was too savvy to invest her own money, although her husband’s money was fair game. I became the bookkeeper for the business.
Obviously, Pattie wasn’t ever going to be the one to walk the floor seven days a week, working 80-hour shifts to get the store off the ground. Through her contacts, she discovered a workhorse to carry the heaviest load. Anna S. was a graduate of Moscow University, steeped in high fashion since childhood; a recent immigrant loaded with sky-high ambition. In her late twenties, Anna displayed boundless energy and a gratitude to be given 25% of the business for free.
Between Pattie’s rich friends splurging on their shoes, Anna’s unquenchable ambition, and all the financing they needed, it was a match made in heaven. The business exploded like an atom bomb.
While Pattie swanned around the store at will, taking all the shoes she desired , it was Anna who worked seven days a week then went home to spend hours poring over trade magazines and order books. I felt more and more sorry for her.
One day, Anna came to me,” I want to buy Pattie out.” Addressing my consternation, she continued,” There’s a shotgun clause for that in the Shareholders’ Agreement. Based on our spectacular results, I’ll have no trouble obtaining financing.”
“At what price?” I asked,” The shotgun clause works both ways. If you don’t make Pattie a fair offer, she can buy you out at your offered price. And you know she has all the money to do so. If you lowball her, you could end up with a pittance.”
Anna smiled,” She won’t do that. Who’s going to work the hours I do? Who knows the market and the fashion house owners as I do?”
Overconfident about her value to the store and totally deprecating Pattie’s contribution, the Russian offered half the price of what the store was worth, banking on Pattie’s disinclination to work the store nor find an adequate replacement.
With her husband’s full-hearted support, Pattie declined to sell her shares. Instead, she bought Anna out.
Through her contacts, Pattie found a replacement at once – a Lebanese girl, manager at a rival store, as hungry for success as Anna. Mirano Shoes continued to thrive.
Meanwhile, Anna had nowhere to go and no income. She refused to work for anyone.
Months later, she called me,” Can I buy you lunch?’
“ Can you afford it?”
The lunch turned out to be a cup of tea at a nearby Good Earth Coffeehouse.
Surprisingly, Anna was bubbling with confidence. “ The mall manager at Mount Royal is a good friend of mine. Based on my record at Mirano, she’s willing to lease us a space on the main floor. It’s only 600 sq. feet. That means the rent will be low, with the best location. It has large display windows on three sides.”
“ That’s great. But surely, you’re not going into head-to-head competition selling shoes?”
“ We’re going to sell ladies haute couture clothing. Our store will be steps away from Mirano. We can benefit from the same customers who buy from Pattie,” she smiled mischievously.” Our suits will start at $1,000 each( today’s equivalent of $5,000). Max Mara, Versace and a host of top European houses are willing to give us their exclusive licence to sell in Calgary.”
“ Anna, who are the “ We”s ? “ I eyed her suspiciously.
“ Why, you and me, silly. “
I waved my hands in the air to bat away the idea, but it didn’t stop her one bit. Her highness continued” “ You have to find us $300,000 immediately, before Carol leases out our space. The clothes will only be supplied if we put up money with our bank to provide Letters of Credit- as the merchandise arrives, the funds are released to the suppliers. We also have to come up with 50% of the leasehold improvements and fittings- changing rooms, clothing racks, cash tills, display shelves etc.. The mall will match our 50%. Raise the $300,000 now, we can have the clothes here in three months for the start of the season. Then it gives you enough time to raise another $100,000 for the leaseholds and cash flow until our sales kick in.”
“If I go with this, what’s my share of the business? “
“50%”
Could I raise that kind of money in time?
