Family Business

In the family, they already tell stories about Herman Komar's son, young Charlie. How at two he crawled up on to his great-aunt's lap to show her the picture he had crayoned -- "my factory," he announced proudly. How at five he would sit in a garment bin while his father pulled him through their New Jersey plant, down the long rows of sewing machines, past the piles of lace and trim. Day after day he would hear the tales of his grandfather, an immigrant just eight years over from Russia, starting out back in 1908 on New York's Lower East Side with a few seamstresses and $500 bowwowed from the Hebrew Free Loan Association. Even before he could read, Charlie would perch at the kitchen table with his dad, trying to decipher the days' CVO, cuts versus order, the pulse beat of the family's lingerie-manufacturing business.
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Today, no one sells the Charles Komar & Sons Inc. line better than 25-year-old Charlie. Or works harder. By 10:30 a.m, when he meets the day's first buyer in the lobby of the company's Madison Avenue showroom, he has already charged through five hours, run the three miles to the office, read The Wall Street Journal and the mail, showered and changed into a crisp tan suit, white button-down shirt and red rep tie. He has talked with his uncle and his cousin in design, his nephew in production, his brother-in-law in sales, one of his 12 salesmen on the road, and his banker. He has talked with his father, twice. And today he is taking it easy. During market week, just six days away, the office will be filled with would-be buyers, some 100 different accounts a day, everyone in the family will show the line, and Charlie will just come in to close. Today he has only one appointment with a buyer, a newly promoted executive from the corporate office of a multistore chain. For her, he finds the time to preview the latest step in his ongoing transformation of the company.

Selling the line comes naturally to him, he started part-time in his teens. But the line he will show today is a radical departure for Komar. The garments are still American-made, value-oriented products branded with the family name. But everything else has changed. There is a new merchandise mix, a new marketing plan, a new production system -- and a new generation in control of the family business.

Charlie looks too young to be the heir apparent to a $40-million company, let alone the man responsible for changing it so drastically. Tall, with an athlete's grace and a Tom Sawyer smile, he ushers the buyer into his showroom, eagerness written across his face, chatting cheerily before he sets to work.

Inside is a riot of color and mirrors, with hundreds upon hundreds of garments on clear plastic hangers draped around the room -- orchids, aquas, and violets, solids and stripes, cotton, tricot, denim, and Sa- tinessa. Each year, lingerie manufacturers have five, week-long opportunities to sell to the stores. This is the smallest of the year's five, and Komar has only 70 new styles coming out. For this morning's buyer, he will show only 30 or so, arranged in groups of 5 or 6. He has been selling her for a year and a half; he knows her taste.

"Essentially we felt there had to be some newness to the market this time, so it's short and it's sweet," Charlie says, starting with a set of candy-striped cottons. "My designers always want me to show the fashion goods first, but I know what sells."

"Uh huh," the buyer responds blandly. She sits with a 12-page style and price list in front of her and a can of Tab at her side, smoking Carltons and occasionally fingering the fabrics. She knows she will buy. Komar has a history in her stores: a year and a half of increasing sales figures at a moderate price point, with good markup and strong sell-through. Komar's products won't go in the store windows like the designer goods, but they won't hang on the markdown rack at the end of the season, either. And she is charmed by Charlie's boyish enthusiasm -- not that she doesn't haggle, hoping for, say, a dime a piece.

"Go ahead and ask," he smiles, "the worst I can say is no." He will haggle, too. Discounts come straight out of profits.

No one sells the line faster than Charlie; 15 minutes after he meets the buyer in the lobby he is ushering her out the door, drafting the letter confirming her order in his mind. "And remember," he promises her happily before the elevator door closes, "we're going to have at least 10 more new groups next market, too. We'll be making some big statements."

That is the biggest change of all, and the reason for Charlie's flush of good cheer Over the past four years, he has reshaped his legacy, turning Charles Komar & Sons into a "big statement" company

Ever since 1908, when Charlie's grandfather started selling high-neck, open-front, long-sleeved gowns and drawstring bloomers, the Komar name has meant high-value, moderately priced goods sold in volume. In 1917, Komar introduccd the first American-made slip, that slip, indestructible and changeless, along with sturdy cotton nightgowns, supported the company when Charles's sons, Herman and Harold, took over. Cotton robes, dusters, and patio shifts came later. Production drove the business, with the same few styles churned out year after year. Through the Depression, the war years, the '50s, the '60s, and the '70s, Komar grew, up to $25 million in sales by 1979, a 400% increase over 20 years. The Komar history of profitable quarters stretched unbroken back to Charles Komar's days on the Lower East Side.

Starting in the '70s, however, the lingerie market began changing, much as the ready-to-wear market had changed, and for much the same reasons. The baby boomers were growing up, and their tastes were shifting. Komar's traditional customer base started to shrink. The company couldn't run a pattern for six months before it was copied, to be manufactured in Haiti or Hong Kong at a fraction of Komar's cost, then sold through the discounters. The department store and specialty buyers moved upscale to compete, to designer and fashion lingerie, away from the basics that had built the Komar fortunes.

At the start of the 1980s, when Charlie came into the business, Komar was at a crossroad. The company was still growing and still profitable. Its market share had never been bigger. But the market itself was dissolving in front of Komar's eyes. "Every time I hear a hearse go by I lose another customer," Charlie insisted. The Komars had always measured risk by the same simple scale -- "how much can we lose, and can we afford to lose it" -- but if they didn't change direction now, Charlie warned, they could lose everything.

So change they did. Before, they had aimed for the Sears, Roebuck catalog. Today they sell in such department stores as Lord & Taylor, Macy's, and the Federated Department Stores. Once they had showed 40 or 50 standard styles to buyers twice a year. Now each year they show 600 different styles, from 70 to 150 new garments for each of the year's five market weeks. They still make the Komar slip, but primarily for sentiment's sake. They still make dusters, but not the same five styles year after year. Now there are 10 to 15 new styles each market

Years from now, when they talk in the family about young Charlie's succession, they will say that Herman's son did very well indeed for the Komars. Since 1980, when the younger generation came in, sales have jumped from $30 million to $40 million, with no break in profits.

But it won't be that dramatic spurt in growth they talk about around the kitchen tables. Or the new marketing, design, and production that made it possible. Instead, the moral of the story will be the same as most of the other tales in the family canon They will talk about just how much Charles Komar & Sons managed to stay the same.

At lunch, around two small conference tables in the back showroom, Charlie reports to the family's five-man de facto executive council on the discounts he gave the buyer this morning.

"Sometimes department stores want your eyeballs," his uncle Harold sighs, shaking his head.

"Sometimes you have to give them your eyeballs," his father, Herman, says, glancing up from his tuna and seltzer. "I remember my dad telling me every line has to have a loss leader to drag them in. That was from the time when we made openfront drawers, when I came into the business."

Discussion closed.

Sitting there, eating the sandwiches and salads a secretary brought in, the five men look like the cast of one of those multichaptered made-for-TV sagas, "The Sons of Charles Komar," the male blood descendants of the original pioneer noshing on their fish and fruit. Herman and Harold sit across from each other, the 73-year-old patriarch and his 61-year-old kid brother, the first measured in speech, solid, with his suit coat draped loosely around his ample frame and his black shoes poltshed, the second dapper in a sports coat and Nike running shoes, more animated and given to chatter. Their three male descendants look like brothers. Thirty-four-year-old David Komar, Harold's son, the oldest, the artist in the family. Twenty-six-year-old Chuck Stempler, Herman's grandson by a daughter from his first marriage, sensible and pragmatic, self-effaceing and self-confident. Charlie, the heir apparent, "25 going on 26," having his way by his boundless energy and the force of his good nature. Herman and Harold have shared an office ever since Harold came in to the business right after the war, they have eaten lunch together for the past 37 years. The boys all grew up together, absorbing the family traditions by osmosis.

By the conventional wisdom, there would be no family business left for the younger generation to inherit. The family sagas on TV usually end with the descendants degenerating into internecine squabbling, driven by greed or alcohol or drugs And real-life Seventh Avenue is in fact littered with family apparel companies that died with the transition: sold, liquidated, or frittered away. A recent study of family manufacturing companies by John Ward of Loyola University found only 22% of family businesses able to survive under family control over 60 years, long enough for the third generation to come to power, with only 4% of these able to grow significantly.

But Komar's growth curve has climbed steadily upward for 77 years.

"We happen to be a very, very close family," Herman explains. "I had my older brother Sidney in the business. And I have my younger brother Harold in the business. And I have never gone to bed in all my life angry at either one of them. If anything had to be talked out we'd talk it out."

"If there were three from the same generation grabbing for the same thing, then you could have problems," Harold says. "But we weren't. My parents were smart enough to have three different kinds of kids." Herman handled sales and finance. Sidney, who died in 1971, was in production. Harold went in for design "And there has always been a closeness of family."

Which reminds Harold of a story.

Once, just after my father started the business, all the girls sewed in the sleeves backwards in the garments, the left on the right and the right on the left. So my father went to his mother, Leah, and he was so disgusted, he said 'I've got to get out of this business, I can't stand it.'

"His mother said to him, 'Sit down, give yourself tea, and we'll talk.' And they did. And she said, 'You know, you may never have another chance to go into business again.

" 'I'll tell you what. Esther' -- which was my mother -- 'and Pauline' -- which is my father's baby sister -- 'and I will sit up all night and we'll work out the sleeves and the girls will sew them back in in the morning.' And they did that. They did that."

It is a tale that has been told and retold around the Komar family tables for years The family and the business have always been the same. So Herman's father taugh him, and so he taught his son. There is a precept for every occasion, usually beginning, "One of the things my father taught me . . . "

Start with profits. Each quarter. The whole point of business is making money, nothing can follow without that. But not, Charles Komar insisted, without integrity. Questions of quality are still referred back to the code of ethics he tagged on his early garments -- "We give more to the consumer than either mercantile law or common opinion demand." Reputation is sacrosanct. Back in the Depression, when Herman was a newlywed scraping by on just $65 a week, "we gave up our biggest account because we heard there was a grafter in the account, and they wouldn't fire him," Herman remembers.

"It was a rough year, but my father gave up the account on principle." Herman took a pay cut, down to $50 a week, and started playing professional football on the side to make ends meet.

"You get out of life what you put into it," he insists. "That's the whole thing."

"The main thing is what you give to everybody," Harold adds. "You've got to give to yourself, to your employees, to your customer, and to the ultimate consumer." Nowhere is that precept practiced more strongly than with the staff at the five Komar factories, three in New Jersey and two in Oklahoma.

At Komar, the workers have always been treated like part of an extended family, entitled to share in the benefits of the company's success. It is a tradition that goes back to 1932, Herman remembers, when "Mom noticed that the employees didn't have a hot drink with their lunch." That wasn't fair, she said. Her husband and her son had hot drinks, and "certainly the employees were entitled to the same." Since then, subsidized meals have been offered at the Oklahoma plants, in addition to the free hot coffee, tea, and cocoa available to all Komar employees.

Twenty-seven years ago, when Herman's father died of leukemia, Herman kept Komar alive by working hand in hand with the employees. Many of the men and women on the factory floor remember him as a young man. There are 3 members of the 50-year club, another 20 in the 40-year club, and hundreds more in the 20-year club. And Herman owes them all. He set up a pension plan for executives just after his father's death to cover their retirements About 10 years ago, the company replaced that plan with profit-sharing for all employees. Every year, the Charles and Esther Komar Foundation awards at least 12 scholarships in each of the towns with a Komar factory, so that deserving youngsters can get the same chance for a college education that David, Chuck, and Charlie had. "Treat your help right and you'll have a good organization," he preaches "We've always looked at it that way, and we've never had a union shop for that reason."

There was never any doubt that the three boys would, in time, take over the business; the bulk of the family stock began to be transferred to their hands 24 years ago, when they were young children. "But no one is given a business; I just offered them all the same opportunity I had," Herman says. That opportunity meant summers growing up working in the factory, an apprenticeship that taught them the problems and procedures in each department from the bottom up, just as Herman and Harold had learned them.

Harold's son, David, was the first of the younger generation to come in to the business full time, joining his father in the design department in 1976, four years after he graduated from the College of William and Mary with a degree in psychology. Charlie joined in 1980, after graduating in business from the Universty of Maine and treating himself to a cross-country bike trip before starting work. Chuck Stempler came in early 1980, too, leaving an MBA program at New York University to learn "seat-of-the-pants knowledge while my grandfather is still alive." Like his father, Herman's former son-in-law Maurice Stempler, Chuck went into production.

Only David, a product of the '60s, hesitated at the commitment at first. But his father refused to pressure him. "I know it takes a while to find yourself," Harold explains, "so to push him was no sense. It took me a while, too. I didn't want to come into this business. No way did I. I wanted to have a photography shop down South, or an antique shop, and have a very quiet life."

"My father was great about it," David says, "and now our relationship has never been better. I guess we were all just bred for the business, although I'm not sure whether it was heredity or environment."

For the boys, like their fathers, tradition was for living. Herman got to work by 7: 15 in the morning, so would Charlie and Chuck. Harold still visits one of the New Jersey plants daily; David also spends time in the plants. Corporate and family values stayedthesame.

Which reminds Charlie of a story.

Just after he started, Charlie took the buyer for a new account in to meet his dad. The buyer represented a large conglomerate, a big order. Charlie had been pitching him for months.

"We used to do business with someone from your company. But we stopped,' Herman remembered, leaning back in his chair when the introductions were made.

"The buyer was a grafter," he growled, fixing his new customer with a baleful stare. "You're not a grafter, are you?"

There he stands, on the second floor of Abraham & Strauss A tall neat and very young man in a tan suit, brown notebook in hand. In the middle of New York, in the middle of the afternoon. He is fingering the lingerie. Every few moments he will pause to check a gusset or glance at the price tag, but generally he moves quickly, a pleasant, not quite vacant smile on his face.

It makes the sales clerk giggle. A shy bachelor? He wears a wedding ring.

Some sort of pervert? Too clean-cut.

"Can I help you?" she asks politely, suppressing a blush.

"No, thank you," Charlie says. "Just looking."

The buyer from Abraham & Strauss will be coming in to see the Komar line tomorrow, so after lunch Charlie walks over to take a look at the store. In the past three years, he has pumped A&S's volume up five times. Butto keep selling it, he has to know what is happening on its floor -- not just how his goods are moving, but how his competitors are selling as well. Charlie is the eyes and ears of the new big-statement Komar, traveling more than 250,000 miles a year, from department store to department store, roaming through the aisles of lace and trim.

Charlie's father, Herman, never had to watch the stores; in the old days retailers would buy whatever Komar had to sell. Charlie's father never paid much attention to the competition, either. "Watch your own business," he would say, "and let them watch theirs." But Charlie's father no longer dominates the discussion at the family lunch table, nor makes the family decisions. Charlie does. And Charlie is impatient.

"We're still just scratching the surface," he says. "We put Komar goods in new categories in 10 more stores last year; it should have been 50. We're selling cotton robes at five times the clip of last year, in 80 of the top 100 volume department stores. But why not the other 2O?"

After 77 years dominated by production, Komar has become market-driven with a vengeance. "It's a whole different story now from what it was in my time," Herman says. "Years ago you made 40 or 50 styles and ran them; we had one set we ran for years and years, and our big problem was to find a different embroidery motif. Today it's all changed. We're allowing the retailers to merchandise for us, where before we would merchandise for the retailers.

"We trained our children pretty well, though. And if they're going to make mistakes, I'd rather see them make them while we're here. I don't worry whether we make too much money, if I see the growth and the idea is right. I'll even take a licking if I have to. But I know how to watch a business."

Over the past four years, Herman and his brother have stepped back to an advisory role. The younger generation has come of age.

The first changes came in design. Harold, who once ran the department single-handed, is largely retired now, "not on top anymore, but on tap."

"I felt like a butcher trying to do a brain surgeon's job," he confesses. "Years ago you just made pinks and blues. I used to say, 'We'll make a square, V, and round -- a square neck, a V neck, and a round neck -- and that will cover everything as far as design ' But now there's so much more. You've got to have fabric, you've got to have cuts, you've got to have a million different things.

"It's all too complex."

Design is an entire department now, with David as "design coordinator," four professional designers, and Dolores Van, a fashion coordinator. A fashion research service feeds them reports on both lingerie and ready-to-wear trends from Milan, Paris, London, and New York. There is a new, sleek showroom, remodeled by David, to project the new image.

Charlie was just as aggressive in marketing. Over the past two years he has upped his sales staff from 3 to 12, 4 of them former sales managers with other companies. He tripled his co-op advertising budget, now 2.5% of sales, and increased his budget for department store enclosure mailings 500%. There is a new garment tag touting a "quality checklist," and the letterhead now reads, "After 75 Years We Still Believe It's Good Business To Make Quality Products," not "Home of the Komar Slip."

Chuck, Herman's grandson, brought Komar into the computer age.

In the 1970s, Komar had used small computers for general order entry and payroll. In the '80s, after looking at 30 software and eight hardware options, Chuck computerized all the paperwork in the business -- cut-and-sold reports, invoices, receivables, everything -- a two-year research project that promised the family a net zero cost in five to seven years in spite of the significant initial cash outlay. "I didn't know anything about computers, but no one else did either, so I just sort of fell in to the job," he says.

In the first quarter of 1983 -- after Komar followed its biggest sales period in history with its first failure to ship on time--Chuck took on another task. Komar's production system has always been as automated and up-to-date as current technology would allow. The plant would make whatever was on hand, running in a continuous production mode like General Motors, based on whatever materials had been bought, received, and tested. "That was fine for 60 styles," Chuck says, "but for 600 it was a logistical nightmare. So I decided to change it." Today, every operation on every garment is scheduled in advance. And today, Komar's production runs are four times faster than under the old production model.

Chuck usually visits the Oklahoma plants every four or five weeks, "mostly just to walk from department to department and thank people." But when he decided to make major changes in the production system, he made a special trip to explain it in person.

The hourly workers in Oklahoma were pleased with Chuck's changes, especially since the new production-scheduling system was designed to avoid the problem of dry periods, which resulted in layoffs. They knew they could trust him, anyway. Not long before, some of the women had suggested they might all work a little better if they got some exercise, and Chuck had agreed. The aerobic dance-class program he implemented proved immediately popular: Today, nearly two-thirds of the factory's workers take part in the classes, five nights a week, at Komar's expense. To Chuck, the program was like the hot drinks back in '32. The employees deserved it.

Today, when Herman Komar watches the family business, he likes what he sees very much indeed. The traditions -- and the profits -- are not only being maintained, they are growing. David, Chuck and Charlie have all found niches for themselves, just as Herman and his brothers did. And there is still the same family closeness: Charlie has his brother-in-law, Jay Harris, working as a salesman in the New York showroom, and his sister, Leah Harris, designing the catalog. Charlie is more aggressive than Herman would have been, and he is certainly more energetic. But Herman remembers being full of beans himself when he took over, and eager to make the business grow.

Finance was the last area Herman let go. Last year, Charlie wanted to start making acquisitions, and targeted Berwick Knitwear Inc., a Pennsylvania sweater manufacturer in the $10-million-to-$15-million range. Herman thought Komar should just stick to lingerie companies.

"There's a limiting factor with that," Charlie argued. "How big is the lingerie market ever going to be?"

So Herman gave him his head. And Berwick Knitwear, purchased last April, is just a start. By the time he turns 50, Charlie hopes to turn Komar into a $500-million diversified conglomerate. Herman can barely imagine it.

"The Komar Group," Charlie plans to call it Wouldn't that be something for him to pass on to his children?

By the end of the day, Herman is tired. He rests his bulky frame in Charlie's modest office, the smallest in the executive suite, listening and nodding, occasionally offering an anecdote from his 50 years at the helm.

This afternoon, Charlie is patiently outlining what he has planned for the $9 million in the company's profit-sharing fund. A broker's proposal came today, Charlie explains, a new investment opportunity, so he rechecked Komar's options. He talked with his cousin, Sanford Moore, whose legal and accounting firms counsel Komar. He talked with the broker. "And I essentially decided that what we were already doing was best," Charlie says, tearing the broker's return envelope in half and throwing it in the trash.

His father nods. That seems fine. Then he rises ponderously from the chair, smooths the wrinkles from his rumpled suit, and glances down at the wastebasket. "That's a 20 cent stamp you've got there," he points out.

Discussion closed.

Back in his own office, Herman sits out the rest of the afternoon in solitude. Old habits die hard: He still gets to the office early and stays late, but there is less and less for him to do. In the old days he could have talked with Harold, but Harold is on a fitness kick, hiking up to the Metropolitan Museum of Art this afternoon. He could always go to Florida, but he already spends half of the year there. He is still called chief executive officer, and is listened to with respect, but the responsibilities are no longer his. Just as he planned. "It was darn tough to give it up. But I decided to step out when Charlie came in. I thought he was a brilliant boy. I knew he had a lot of determination, so I decided that I was going to let him do it.

"I always felt the children deserved the opportunity I had. My dad could have closed the business up, a lot of people did. But we never thought of it. And I'll tell you this: Any one of the kids is a damn sight better than I ever was.

"I remember I turned over one account to Charlie, and the buyer didn't want to work with him. She said, 'I only work with the boss,' because she had always worked with me. I said, 'You're looking at some- one in his seventies, you've got to start using your head. You're going to be here longer than I am.'

"It turned out that inside of two and a half months the buyer didn't want to work with me. She didn't want to work with the old people, she wanted to work with the young generation. And that's what we've got."

No one tells the stories about the younger generation with more satisfaction than Herman Komar. Just before his father died, Herman got a letter from him. Remember your responsibilities, his father wrote. To your brothers To your employees To your family. Much had been given him, but much would lie expected. That was years ago, when Herman was not much older than Charlie is today. But today, after a lifetime with the family's business on his shoulders, Herman can finally rest. The promises he made to his father will be kept by his son, and, pray God, by his son's sons.

"I hope I'm going to be with the company until the 100th anniversary, but I doubt that I will," he says. "But I know this. The company will be here."

Such a blesssng. It makes the old man smile.

Last updated: Nov 1, 1984




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