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Doug, who unlike Susie is quite comfortable speaking the language of corporate executives, won the battle of presentations to the reconstituted board of directors, hands down.
Under the new scheme, Doug would resign as Esprit CEO and be replaced by Corrado Federico, who had been acting as the firm's president since its 1986 financial troubles. Doug, meanwhile, would direct all of Esprit's creative activities -- both clothing design and marketing image.
Susie, according to a press release her publicist issued at the time, would be bought out and step down to pursue her social activism. The change was first announced at a surprise employee meeting. Hired, as they were, on the promise of becoming members of a youthful Utopia, Esprit staff had been kept largely in the dark about the details of the Doug-and-Susie unpleasantness.
The marriage was formally dissolved in June 1988, 23 years after its North Beach beginnings.
Susie bought a 44-acre spread in Bolinas.
Doug went about running the company. But rather than bring Esprit into a triumphant new era, Doug immediately set to bickering with the company's directorship. As the corporation's new fashion czar, he assembled a 1989 clothing line and marketing effort that suggested purchasing Esprit products was an act of anti-consumerism. Advertising copy told customers that if they didn't really need another shirt, "don't buy it."
"I wanted there to be less style-changing, less products that were obsolete before you even produced them. I wanted to see more durable products that people would use year after year," Doug Tompkins says.
In hindsight, it wasn't a terribly bad idea, says Buckley.
"Doug wanted to make products like the Gap and Banana Republic later did. He wanted to sell simple, well-made garments, and a lot of them," Buckley says. "Susie had wanted products to be trendy and hip."
The change rankled the company's new brass. Deep ecology was a fine thing for millionaire ex-hippies to dabble in, but it didn't have much to do with running a multinational corporation. Corrado Federico and Susie's representative on the Esprit board, San Francisco investment banker Isaac Stein, began to characterize Doug as an undependable dreamer who had lost interest in running the business.
"He was seen as erratic and wild," Buckley says.
As Doug bickered with Esprit's management, a new back story began to emerge in the fashion industry. The whisperers were many: Esprit had lost its soul when it lost Susie, people began to imagine; now it was foundering along as just another manufacturer of knockoff clothes. Wasn't it Susie who went on the worldwide buying trips? Wasn't it Susie who had been director of design during Esprit's heyday? Wasn't it the always-stylish Susie who was always bounding gleefully in the Esprit catalog?
The couple's dissolution agreement continued to follow its prearranged course. In mid-1989, the two agreed to allow Goldman-Sachs bankers to determine a price at which Doug would buy Susie's shares. If Doug for some reason failed to buy Susie out, the entire company would be sold at auction, with the proceeds split between them and Esprit Europe, a separate corporation that held a piece of Esprit U.S. The auction, if necessary, would be held June 1, 1990.
Doug brought on the San Francisco investment bank of Montgomery Securities to put together a financing package. Under that plan, Peter Buckley would be in charge of Esprit operations while Doug would direct image and design, recalls Buckley.
But nothing happened.
The four months the agreement had allotted Doug to buy Susie out came and went. Another month passed.
To Susie and her supporters, it looked as if Doug were playing hardball. By waiting until the company went up for auction Doug seemed to hope to buy Esprit for less than the reported $380 million Goldman-Sachs appraisal. He was planning to pull one over on Susie, it appeared.
Susie bristled, then acted. With Stein as her adviser she assembled her own group of financial backers, with the aim of going head-to-head at auction with Doug.
Doug brought on Luciano Benetton as a 50 percent partner.
Susie brought on Bruce Katz, founder of Rockport shoes.
Then, during the weeks leading up to the auction, something happened that should have seemed obvious, but came as a complete surprise. Outside bidders began to appear. Reebok, the tennis shoe manufacturer, stepped to the plate, as did Tuntex, a Taiwanese manufacturer. A bidding war was brewing that neither Tompkins was cut out to win.
Esprit was poised to become just another division of just another conglomerate, a notion offensive to everything the two people who had started the company believed in.
Doug called Susie, they talked, and he agreed to sell to Susie at a lower price than he would have received from the Taiwanese.
"I made an inside deal with her to keep it inside the family," Doug says. "I took a $40 million bath to keep it with her. I could have spent that money on our environmental foundations. It has turned out to have been a bad idea, but at the time, I had my children to consider."
Doug now says that he assembled his financial backers, his new management team, and his bidding strategy as a ruse to drive up the price of his company at auction. His critics maintain that Doug played a risky hand, and lost.
Whether Doug was actually a bad gambler or an astute bluffer, the end result was the same: His former wife was at the helm of Esprit, a place, she said in interviews, that she'd always dreamed of occupying.
It was June 1990, and a new era had dawned. Flush with promise, Esprit de Corp. U.S.A., its backers, its employees, and its co-founder were poised to ride one of the most spectacular collapses in the history of fashion.