"Look, Kellee, flowers." Balle is pointing out a coming trend -- flowers on shoes. That worries him. He thought he had a jump on that via Europe and the faxes from Rebels' Italian designer, Luciano Tiramani.
McCormack picks up a shoe and examines its sole. "I think Luciano has some explaining to do," she says. "We wanted that bottom, and they said they couldn't do it. But there it is. That makes me mad."
Balle and McCormack ride the escalator up to the children's shoe department to visit the buyer, who happens to be out. The clerk eyes them suspiciously as Balle pulls a Rebels shoe off the rear of a display table and places it front and center. He complains about the clutter, implying that other brands shouldn't be crowding his out.
"You're not doing it right," says McCormack. She nudges him aside. "Let me do it." He defers to her. Turning his attention to a competitor's shoe, Balle notes an obvious flaw -- something he learned early on. You don't put grommets on a kid's shoe. They can easily rip upholstery when worn by an energetic child scrambling over a sofa.
In a sense, Balle and McCormack are returning to the scene of the original caper. When Balle first set out to sell Nordstrom's, he simply showed up unannounced at this store and asked for the head buyer. "I had the shoes in a bag," he says. He figured if he called and made an appointment, he'd get the brush-off. "We had what they wanted," Balle recalls. "The buyer had just gotten back from Europe and had seen those shoes."
Nordstrom's is now Rebels' largest customer, accounting for 15% of sales. Rebels has a sales representative devoted exclusively to servicing Nordstrom's stores in Southern California. Nordstrom's returns the special treatment. It recently invited Balle and McCormack to Chicago to host an in-store promotion at one of its stores there. On that weekend trip, between Nordstrom's and the Chernin's chain, they wrote orders for more than $100,000 worth of shoes.
Reflecting on that big score, McCormack marvels at Balle's bravado. "He has a certain charm with these buyers," she says. "He talks to them like they're his friends. He says to them, 'You should have these shoes.' Eyal goes beyond proper etiquette." He doesn't disagree, but then etiquette is no match for the knack. "If I had been there a few more days, I could have sold twice as much," he says.
* * *
L.A. Story, Part I. After a few months of doubling as a security guard and valet-parking attendant, Balle had decided it was time to buy a car. He bought a used Ford Maverick for $500. One of his fellow security guards, another immigrant, admired it and said he was looking for a car himself. Is that right? Balle asked, telling him he had paid $1,000 but would let the car go for $750. "Hey, this is pretty good," Balle recalls thinking. "I make a week's salary in 10 minutes."
Balle was now in the used-car business. He favored older, high-mileage cars, which he would immediately get painted at Earl Scheib's for $99. His customers, many newly arrived in the United States, mainly wanted cars that looked good. Whenever he placed ads for the cars, Balle added two words: "Call Claudia." (Claudia was Balle's roommate at the time.)
That brought interested buyers of the male persuasion swarming. They'd call and arrange a rendezvous to see the car, only to be greeted at the door by Balle. "So sorry, you just missed Claudia," he'd say consolingly. "She had to run out to an appointment, but she left me all the information on the car. I can help you."
* * *
Shoe shows. The best way to get the word out was to go to shoe shows. Rebels' first was in Las Vegas in February 1994. Many companies there easily spent $10,000 prettifying their booths. Balle and McCormack spent $50. Knowing that many buyers were Jewish, Balle erected a simple banner that read: "Rebels are here. Shoes made in Israel."
He and McCormack then dumped a few large bags of sand on the floor, aiming to create a pseudodesert scene with the shoes half buried in the sand. They intended to invoke the spirit of the Israeli army, whose soldiers wore a similar style of shoe, and which, notes Balle, "has a strong reputation."
For their next show they bought a fish tank and a dozen goldfish and suspended a new line of shoes called Jellyfish in the tank. That cost $100. Some people placed orders. Others wanted to get in touch with Rebels' designer.
* * *
Something for nothing. Balle never signed a long-term lease for warehouse space, preferring to pay an extra $100 a month for the right to break his lease. It proved a wise move, since Rebels is about to move into its fifth warehouse in three years.
But the company's makeshift look -- six people crammed into two offices -- is deceptive. Rebels now has a national sales manager and 13 sales representatives. Balle and McCormack began building the sales force with people she knew through the jewelry trade but then kept upgrading it as they made new contacts in the shoe business.
Their strategy is to get good people who have had to jump out of flaming companies, thereby learning from bitter experience. Balle likes people who have been tested. Four of Rebels' sales reps came over from Keds, a once-proud but now-faltering division of Stride Rite.
Rebels' national sales manager, Ralph Hulit, and another four sales reps came from L.A. Gear, which tumbled into trouble in the early 1990s after getting hooked on the thin-margin deep-discount market and burning its mainstay department-store sources. Margins collapsed, as did sales, falling from a peak of $900 million to $300 million in three years. One Rebels sales rep, Rich Tremalio, dubs Rebels a "baby L.A. Gear," which, all things considered, may not be the highest compliment.
Balle is sharp at digging up talent at a below-market price. Rebels' designer, Luciano Tiramani, worked for two other companies in Europe. Balle found him when he went to a shoe show in Germany while actually looking for someone who could do quality control. Tiramani now serves both functions for Rebels.
Balle engaged a young designer, Mary Perez, to create a corporate identity for Rebels -- and paid her in shoes. About their barter, Perez concedes, "I hope it moves beyond that," but then adds, "I'd really like to see my logo on every billboard in town. So for now, the shoes will do."
One day Balle opened the back door of the warehouse to find a photographer and his crew shooting an elaborate beach scene. When they broke for lunch, Balle asked if the photographer wouldn't mind snapping a few pictures of Rebels shoes for promotional purposes. The crew looked at Balle in disbelief -- and acceded to his request.
