Face-off

Narasin: As each year goes by, I will be less and less tied to it, while you will be more and more wrapped around it.

Levy: I disagree. Because our private-label manufacturing will become stronger and our relationships with retailers stronger --

Narasin: We differ on this.

Life and work
Narasin: With the private-label business, every customer is a new customer with its own needs. When I sell my brand, I might have 50 items in my line, and I sell them to everybody. Laurence might show customers something to start with or his concept. But you can bet that if a retailer wants 100,000 purple sweaters with pink polka dots, then all of a sudden Laurence is going to gear up and make that. Every time you gear up to work with another private-label customer, it's almost like re-creating your entire business.

Levy: He's right about that. The workload is enormous. I don't deny that at all. There's nobody who works harder than we do in the entire apparel industry.

Narasin: Laurence happens to be a psychotic workaholic. But I want a life.

Levy: I agree with what you're saying. What Jeff and I do is crazy man's work. It is sick. I don't think our way is better in terms of living or a lifestyle. There's nobody who would want to do what we do. We are two people who are more on the edge than most, and we revel in this stuff. To be very honest with you, yes, we would have the ability to burn out quicker in the long run than Ben. No question.

Narasin: I see Laurence's company growing to a certain point, but it's going to plateau with a lot of those customers, and he and Jeff are going to reach a level where they can't physically hustle up any more business without dropping dead. Then I will come along and pass them at better margins and be happy at home with kids, while they'll have ulcers and divorce.

Levy: Jeff and I approach it much more from a business standpoint. Ben approaches it more from a lifestyle standpoint. No question about it. I think Ben's business means a lot more to him for what it does for him personally, from the exposure he gets. Whereas we want to grow this company big. We want to grow it fast. And we like to feel that we're big businessmen. I think that's much more important to us than it is to Ben.

Narasin: It's only because I think lifestyle is an integral part of business. If you can't grow a business -- both profitably and in a way that you can look at yourself in the mirror and say, Yes, I like the person I am, and you can look at your whole company and say, This is a whole company where the people who work here, who are our internal customers, enjoy being those customers -- then I don't think it's worth doing. But I enjoy the business as much; there's nothing I like better than making a deal. But we certainly haven't had to sacrifice anything in the way of growth. And we certainly haven't had to sacrifice anything in the way of profits.

Levy: But you haven't been able to shoot to the levels that we have.

Narasin: Because your margins stink.

Levy: That's not true.

Narasin: By working on a brand, we've managed to have an overall higher net margin than what you have. So if I can maintain this growth -- which I don't see as a problem -- then when I'm your size company, I'll still have that size margin. And that enables me to give more things to my employees. But forget about the fact that I want to take care of my people. Just looking at it from a dollar standpoint, it really boils down to this: Our margins are 20%. Yours are 14%.

Levy: I'd gladly give up those six points of margin for the extra volume.

Narasin: I think we're going to catch up, and we're going to pass you.

Levy: Absolutely impossible.

Narasin: But your margins are getting squeezed and squeezed.

Levy: No. The lowest we would ever go in margins is 11% or 12%.

Narasin: OK. So they would've shrunk by two points while mine stayed at 20%.

Levy: That's a hypothetical -- they haven't shrunk. And my volume has increased by $5 million to $10 million. In 1994 we're projecting to do probably $33 million to $35 million, as long as we get the capital we need -- which we should.