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I remember going to the printer to put out our latest catalog and I hadn't slept in like three nights.
I think I was just up around the clock just trying to get it all pasted up and ready to go.
I was driving home across the Golden Gate Bridge and all of a sudden I hear this honk.
I wake up and realize I've veered into the oncoming traffic.
You were falling asleep.
I was falling asleep. I was so sleep-starved and I went home and I just broke down.
And I just told Mel, we can't do the catalog and the store and make the clothes.
I just, I can't do all this.
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
I'm Guy Rizan. On the show today, how Patricia and Mel Zeigler brought a sense of style to army surplus clothes, sold them in a safari setting, and built a multi-million dollar business.
Banana Republic. A lot of people sit at their desks and dream about starting a business.
You might be doing this very thing at this very moment.
I remember having that feeling and I remember the anxiety I felt leaving my job to do it.
And so it's probably why I identify with today's story so much.
Because Mel and Patricia Zeigler were, like me, journalists.
Back in the 1970s, they both worked for the San Francisco Chronicle.
This was a primo gig, a job you don't leave.
The Chronicle at the time was a prestige newspaper, but neither Mel nor Patricia was satisfied.
And so when an idea came to them to start their own thing, they decided to take the leap.
The problem, like so many startup stories, was money.
They didn't have much to start, but what they did have were complementary skills.
Mel was a writer, Patricia was an artist who also knew how to sew.
So together, they set out to tell a story about clothing.
Mel would write a quirky, photocopied and hand-stapled catalog.
Patricia would buy inexpensive Army surplus clothing and gussie it up with fashion forward alterations.
With the little money they did have, they were able to open one shop in the sleepy town of Mill Valley, California, about 20 minutes north of San Francisco.
This was in 1978, and they called their little store Banana Republic.
At first, no one came. Crickets.
But eventually, people started to discover their safari-themed apparel.
The original Banana Republic was very different to what you see today, and we'll get to that.
But what made the brand pop, and then it's often you were camping and hitchhiking and living up in the mountains in Santa Cruz and outside of Santa Cruz.
What were you doing? Well, things were getting very stormy at UC Santa Barbara, and it was just right before they burned the Bank of America building down.
My boyfriend was drafted, had what's called up, and he had heard that there was a psychiatrist up in Stanford who was helping guys get out of the draft.
So he asked me to come with him.
We hitchhiked up together.
Came back about two days late.
I see all my stuff in the alley at my apartment.
I ask the people, so where's Sue, my roommate?
She said, oh, I hear the people dropped out that were here before.
I said, what? There are very ambitious real estate people in Isle of Vista that just wanted to keep all this apartment filled.
So I had no place to live.
My parents weren't too happy about my draft-resisting boyfriend, so they kind of stopped talking to me.
I went into the deans and said, you know, I decided I don't need a license to be an artist.
I'm out of here. We took off.
I made him a pair of fringe leather pants.
We took off hitchhiking.
Everybody wanted a pair of fringe leather pants.
We had a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants
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and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants and a pair of pants could get you a parking place anywhere on any corner, fire hydrant or not.
But we looked around one day and realized that some of those people had been there for 30 years and that was kind of horrifying to us to have that predictable of a life.
Yeah. Well, we wanted to travel.
We wanted to travel. We really wanted to travel and see the world and it was pretty difficult to do being tied down at the Chronicle.
We had to show up every day.
You couldn't be in Timbuktu or, you know.
So when you guys left the Chronicle, you did not have this grand idea to start a business.
It was just, let's just travel and we'll make some money as freelancers and that's it.
Figure it out. We'll figure it out.
Yeah. Okay, so. There was no plan beyond that.
Okay. So how did that go?
Well, it was more difficult than we thought.
I mean, freelancing wasn't really going to get what we wanted to get.
That became pretty clear pretty soon.
We weren't going to get enough money to travel to see the world.
And so we, at that point, said, well, we got to figure out something.
We got to start a business.
But we had no idea what kind of business we were going to start.
But how did that idea even come to your minds?
I say this as a former journalist and I know journalists are entrepreneurial in many ways that they operate, but very few of them think about starting a business.
They don't have that perspective for a variety of reasons.
So what even gave you the idea of starting a business?
Our goal was always to be free.
Our goal was always to be able to live the life we wanted to live.
And starting a business was going to be the only ticket we could possibly think of.
Was there something that inspired that idea?
You found that book. Napoleon Hill.
Think of Bro Rich. Think of Bro Rich.
Classic. A classic book.
It was a silly, but wonderful book.
It was written in the 30s or 40s.
It was simple, profound.
I read it. I said, this is what we got to do.
We got to figure out how we're going to do this.
And so we're calling it with three steps to this thing.
How much money do you want to make?
How long will it take you to make it?
And what will you do to make it?
The magic number was a million dollars.
We wanted to make a million dollars.
Five years. We'd give it five years.
We had no idea what kind of business.
No idea. But right about that time you got the assignment to go to Australia.
I had a freelance assignment to go to Australia.
I was gone for a week or two.
And in Australia, the British Empire at some point.
And so what I found there was not available in the U.S.
And what the jacket I found was, I think, a Burma.
The cotton is thicker than anything I've ever seen to this day.
It was beautiful. It was well-tailored.
It's a well-tailored jacket.
I don't know, probably, an officer's jacket.
I mean, listen, they know what they're doing.
So you get this jacket and I should add, from what I understand, Mel, you were not a clothes guy.
You were not like a clothes maven.
Like Patricia was. Like Patricia was always well, you were always well-dressed.
I always found fashion to be a language or style, personal style.
And you always like, did you have the cash to buy nice stuff?
No, I'd go to flea markets or vintage stores or make it myself.
Nice. Alright. And but Mel was like, you know, whatever was the closet.
He said, yeah. And I told her I didn't care about fashion.
I don't care about fashion.
I don't care about what I wear.
I wear the next available thing in the closet.
I got you. And I just pointed out, today, you're a very well-dressed man.
Very well put together.
But back then, you were, you know, not a schlub, but just, you know...
An army surplus. Army surplus guy.
Okay. Okay. I got you. So you buy this cool.
And did you buy the jacket thinking, oh, Patricia's going to love this?
Or did you just buy it because you liked it?
Well, yeah. I knew she would like this jacket.
I knew she would... Because she was a flea market shopper.
And she would appreciate that this was a very special jacket.
And what did you think about it when you saw it in San Francisco?
Wow. Upgrade it for him?
Yeah. Some leather under the collar patches on it.
It was amazing. Patches on the elbows.
So I went back to the chronicle.
I said, where did you get that jacket?
And I guess that was the extent of the research that made us realize that this is what we ought to do.
We ought to find more stuff like this and sell it.
So that and the strength of that jacket, people asking you where you got it, the two of you begin to think, let's...
Taki shorts, several dozen tubes of Army toothpaste.
Typewriters. Typewriters.
And so we walked around this thing and we went to these things and we were the only people there who were not surplus jobbers.
The surplus jobbers would go there, buy a lot and figure out how to sell all this stuff to everything else.
And the clothes would be part of what they would turn up in the Army's Navy store.
And the people who went to these auctions were people who had Army surplus stores.
They were the jobbers. Or they were the ones who would supply the Army Navy stores.
Yes, they were the suppliers.
They would buy the lots and sell them off to the Army Navy stores.
But Mel found the name of a few jobbers.
We did find one in Oakland.
And he was a guy who would go to these auctions at the air base.
All over the country. All over the country.
And he would just hit a warehouse in Oakland with just stacks of crap.
Full of everything. The boots, Army fatigues, P-coats, whatever.
Everything. Okay, so you find this guy in Oakland.
He did. He was going to charge $1.50 instead of $1.25.
For what? For whatever.
Everything was either $2, $1.00.
Nothing was more than a couple of dollars.
Well, as we walked through, I would ask, you know, what about those?
And he started $2.50, you know, and then I found, and then we walk a little further.
And I say, how about this?
He'd say, $2.25. You know, I could tell he was just playing this all by ear.
Yeah. But then I saw this pile of olive green and khaki.
It looked like great fabric.
I went over and felt the fabric.
And I could see it was a shirt with appalachs and they had this cool kind of patch on the sleeve that was paratrooper.
It was like a button-down shirt made out of wool?
No, made of a kind of rayon and cotton.
But a thick. It was, yeah, it was just beautiful.
Appalachs. Had a beautiful drape to it.
The colors were kind of vintage-y looking, olive and khaki.
And I knew that there was something here.
In those shirts. You knew that you could figure out how to sell those shirts.
Yes. Okay. Just before we go on, how much money did you guys have between you at the time?
$1,500. That was $1,500.
$1,000. And so that was what you were going to use.
This was our life savings.
And the credit card. We had a credit card.
The finance, the business, pay our rent, you know, pay our expenses.
That was it. Yeah. So before we get to how you did it, did you have an idea of how you would sell these?
Did you think we're going to, because you did not have a shop?
We were making it up as we went along.
We figured we would first find the shirts.
Find the shirts, then we'll figure out how to sell them.
And, but you didn't have a name for your business yet.
Not yet. Not yet. Okay. It was just, let's just get these shirts.
And so these were shirts from where?
From Spain. From Spain.
So the Spanish Army. Spanish paratroopers.
Spanish paratroopers.
And there was a trooper emblem that was embroidered on the sleeve.
And they were clean? They were.
Oh no. No. No. No. No. We piled them into our car.
They never washed anything.
And you could smell them all the way.
You got, did you get a decent price for them?
I think we paid a dollar, dollar and fifty.
He was asking, I remember, he was asking one seventy five.
Yeah. And I said, well, how many do you have?
And, You said how many do you want?
Yeah. And he said, well, at one fifty we'll take them all.
And it was like, okay. Yeah.
So we piled them in the back of our car.
And that was how many shirts, do you remember?
Five hundred shirts. Five hundred.
That's, that's, that's eating into your savings.
That was it. That was it.
We put them in the back of our car.
We drove home. And we, we brought them down to our washroom.
There were five hundred shirts.
We had piles of piles of shirts.
We had to wash them ourselves.
Yeah. Because they hadn't been washed.
And so we did that. And we had a dinner party at that point with a number of our writer friends and other friends.
One of whom was a dear friend of mine, Herb Gold, who actually just recently died at ninety nine.
A wonderful novelist. He wrote about thirty six novels.
But at that point he was there at dinner and he went down.
He said, where's the bathroom?
It's downstairs near the, near the, he went to, he came back upstairs with the shirt.
And he said, what's this?
And I said, Oh, Herb. That's a Spanish paratrooper shirt.
We just, but he said, Oh, I love it.
I, he started taking off his denim shirt and putting on the shirt.
And then he realized the sleeve stopped about mid forearm.
And so I ran down and got him another one.
And those sleeves were too short.
I ran down and got two more and they were all super short.
Does, do Spanish paratroopers have short arms?
I think they were just a defective.
I see. Which is why they, which is why they were surplus.
So you bought five hundred irregular defective shirts.
Were you crestfallen? I mean, we just, we're thinking so fast because that's, we had no choice.
And I just looked at her and I said, Oh, Herb, you wouldn't, nobody would want to wear sleeves rolled down with a shirt like this anyway.
And I went over and I rolled up his shirt, sleeves.
And I said, there. And he looks in the mirror and he was very pleased and has so much more panache, you know, he said, how much, how much, and you were, I said, I was about to give him the shirt.
Yeah, as you should. Here's your friend, Patricia said, six fifty.
And he said, great deal.
And now you've got four hundred and ninety nine shirts that you're washing and hang drying, I guess in your basement or whatever.
Yes. Okay. And how are you going to move that product?
Well, there was a flea market in Marin County then in Marin City.
And it was a very dusty flea market every Sunday.
We said, let's go to the flea market and sell these things.
So that's what we did. We set up a booth.
I made a sign. What did the sign say?
Short arm paratrooper shirt, six fifty.
Short armed paratrooper shirt.
Short armed Spanish paratrooper shirt.
For short armed Spanish paratroopers.
And by they were so fascinated, nobody bought any.
Nobody bought one. Well, maybe two.
We probably sold enough to cover the booth fee.
The booth fare was thirty or forty dollars that day.
But I knew that we did it wrong.
We had a problem. Yeah. Patricia had a solution.
Which was? Which was, well, people don't see the value.
We've got to raise the price.
So the next weekend we went to the fair and I styled melon one, you know, put up the collar, put up the sleeve.
Oh, he wasn't wearing it the first week?
He wasn't wearing it the first time.
Okay. Neither of us wore it.
Which was such a mistake.
Right, mistake. Okay. So, and then I wore mine, belted over some tight jeans and heels, and made a sign that said Spanish short armed paratrooper shirts, twelve ninety-five.
Double the price. You doubled the price.
Yes. I didn't think the price was communicating the value of this shirt.
So we put up the sign, we're there looking stylish in these shirts and.
And now it's twelve ninety-five.
Which was a lot of money in 1978.
We were swamped. Wow. We sold.
We had a couple hundred dollars at the end of the day.
I remember that and we said, let's open the store.
When we come back in just a moment, how Patricia and Mel create so much buzz with their safari themed store that they hit a wall and almost smash into a bridge.
Stay with us. I'm Guy Ross and you're listening to How I Built This.
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That son of a bitch gives you credit?
All right. All right. So he gave you credit?
Based purely on this roof.
The fact that he hated Zim.
But now that you had credit with this guy, you could parlay that with Zim.
Exactly. So we went next to Zim's and found...
We're getting credit from Shapiro.
Yeah. So, all right, what were you finding?
I mean, everything that you were buying at this point, because you had to populate this store.
And first of all, I'm assuming that 90% of this stuff was really for men because most military gear was made for male soldiers.
So first of all, it was basically going to be a men's clothing store.
Right. And it was... You were going to differentiate it from an army navy surplus store because of how you were curating it?
Yes. Yes, how we would style it.
But also, I knew that we'd really need half our customers to be women because they would spend more on clothes than I thought men at that time.
I did try playing with the shirts, the Spanish army shirts, taking them apart, and finding I could put two of them together and make a safari dress or cut off the sleeves and make a skirt.
But we needed a lot more.
All right. So just to be clear, you weren't like initially about the Spanish army shirts, right?
But then you go back to this guy's Zim, you go to the Shapiro and Sacramento, these are surplus dealers, and you're looking for finished items you could just put on your shelves?
That would be ideal. But we don't really see anything that I feel is wearable.
But then I started... I went back and looked through several of the piles and realized that, wow, these mattress covers are really good linen.
Could make a good blazer.
And the sleeping bags are sheepskin.
These would be great vests.
So you would basically, instead of look for clothing that you could sell, you were just looking at the material that you could then pull out and then you yourself would sew them?
Well, I knew because we didn't have that much time, I'd need to find some help.
And at this time, this was not mass produced in China.
This stuff was made in the US, made in the UK.
It was probably wool...
With no expense, beard.
Wool from British woollen mills and Irish linen and American denim.
It was really high quality stuff.
Very high quality materials.
But now you've got piles of all this stuff.
Now it's one store. How many pieces of each thing?
So you see a sheepskin like sleeping bag and you say, I'm going to turn this into what?
Maybe 50 vests. Oh, not from one sleeping bag, but we bought 50 sleeping bags.
But you turned it into a vest.
Yes. But now you've got to...
You're starting up a business, you've got to decorate the store, you've got to make the clothes.
How did you do that? Well, I ran an ad, I got one response.
This Sicilian seamstress named Anna and she said, I'm going to sew.
I started cutting and pinning and she started sewing and we just went nine hours at a time.
You were hand making everything that you sold.
That's unbelievable. And so that we could have women's style.
I know. Because you'd be screwed.
I mean, you didn't know how to sew.
You didn't know how to design.
You're a great writer. But he knew what to name it.
Not at all. Patricia designed every single...
I mean, you're the luckiest guy in the world.
Okay, so while Patricia and the seamstress are sewing all this stuff, what are you doing to...
Well, we're going to have a business.
So I was the lawyer, I was the accountant.
I set the business up basically by figuring out how to set a business up without hiring any professionals to do that.
So you were learning how to...
As we go along. How to basically set up the business.
And in the meantime, did you have to do any build out in the store?
Oh, yes. And the store was this small, dark, low ceiling place.
Naughty pine walls in ceiling.
And the landlord said we could not paint the walls or the ceiling.
So I needed light reflected so I went to the the meat market and bought rolls of white butcher paper because it was cheap.
And then stapled that to the ceiling and painted like big palm fronds to make it look like a jungle.
Oh, wow. But also the white would reflect some light.
And you could do all that because you knew how to do that.
Well, yeah. And then there were these big like telephone poles that were holding the ceiling up.
The jungles of Burma, these were worn by Gherkas or something like that.
Yes. And where are you going to mail them?
Well, we didn't have any mailing list but coming from the media in those days, I realized that the only way we were going to get this story out without advertising is to sort of see if we can get anybody in the media interested.
So what we did is we got we printed, I think, 500 catalogs.
500 catalogs. Sent them to every friend we had.
Put them together and stapled them yourselves.
Staple them at the kitchen table because we didn't have enough money to staple them.
Hand wrote the addresses.
On each catalog. So who did you identify to send 500?
Well, we just went through mass-hits and looked at who we would send to at any given place.
So you would send them to editors and newspapers, mainly in New York.
By the way, were you getting the orders?
What's the hit rate on a catalog back then?
2.5%, 3%? 2% would be great.
A good hit rate would be 2%.
But I think you made some even though the catalog is beautiful, you made some major errors.
At least according to the rules.
We did everything. They went to the library after and got some books on direct mailing and what you should do.
And we found out that we just did everything wrong.
We had a lot of product on the cover and the back page and maybe page 3.
We had a leopard print front cover, a cartoon on the back page and I think an interview with me on page 3.
And the people we sent it to were not mail order buyers.
They were just our friends or whoever.
So you send these catalogs out and around the same time you're ready to open the store.
Yes. And from what I understand you open the store right I think around Thanksgiving.
Day after Thanksgiving.
Which is obviously a very important shopping day.
You are on a sort of out of the center of town in Mill Valley on a side street.
You've got the shop, you're ready to go.
You've got the zebra painting on the door, the zebra stripes.
Day 1, Black Friday, what happens?
Nothing. There's very few people on the street.
A few people going to do the laundry next door.
At the laundromat. At the laundromat.
Maybe a few other people going to the health food store up at the corner.
But nobody outside of a few glances, nobody is coming in.
Until the guy at the end of the day.
Who brought the gas mask bag.
For how much? $6.50. And he gave us, I remember he handed me a $10 bill.
And I realized, we don't have any cash register.
We have, how do you, wait, I had to dig into my pocket to give a change.
We had no idea, we didn't even think about getting a cash register.
So what did you do when nobody came into the store that day?
We just kept adjusting the outfits that were hanging on the walls and just slightly moved things.
And I opened the door, it was cold.
But I opened the door and kind of sweep outside hoping to catch someone's eye and just said, oh, drop in, you know.
Just anything we could do to attract people.
Were you worried? Oh yes, we were starting to worry.
Everything we had was in here.
It was the end of the month.
We had to pay rent. And we had net 30.
That was going to be due a week after.
How close were you to, I mean, did you have the cash?
We had no cash. We didn't have anything.
Everything was in the store and in the product.
So you're going to have a week to pay what, rent and the net 30 on the on the goods.
And what if you didn't have the cash?
What would you have done?
Would you have to return it or I don't know?
We didn't even think that far.
We didn't go that far. We just kind of kept going.
And then this woman walked in the store, looked around and said, you know, I'm from the independent journal which is the local newspaper.
In Marin County. And said, you know, I'd love to get the story on this place.
Can I bring by a photographer?
She was back in like two hours.
They interviewed us. We tried on different clothes.
They took pictures. And that was great.
And so we kept... I think two days before the end of the month, we went, I think it was a Saturday, that Saturday to open the store in the morning and there was a line of people outside.
And somebody holds up the front page of the style section of the independent journal with a picture like three quarters of the page of the two of us in Safari give.
Wow. And so all of a sudden you get a crowd at the store.
All of a sudden it was a crowd.
That, presumably, they spend a couple of days listening to more dollars a day.
Enough to pay the rent and pay the zips.
And pay Zim two days early, I think.
And is that it? Is that like now you're...
A couple of days and then it dies.
Maybe a week or two. Yeah, it died again.
It wasn't much. So wait, it was a week of really exciting people coming in and then crickets.
Nothing. What was the problem?
Did the two of you at night ever say, what are we not doing right?
I don't think we ever questioned what we were doing.
I don't think we ever questioned it.
We were just trying to think of new ideas for how we could start up sales again.
But we had to keep... it was a store.
So I had to be there 10 hours a day or something in case someone came in and wanted to buy something out.
But failure was not a possibility.
We were... We would boy each other up.
We would make this work one way or another and we were determined to do it.
You know, there... Whatever we did, there were no mistakes.
You just keep going. Anybody who called, I'd answer the phone, of course, Banana Republic.
And if they said, oh, wrong number, I said, oh, well, you didn't know about Banana Republic?
I'd try and engage them in conversation.
And one day, you got a wrong number early in the morning.
You thought it was a wrong number in the early morning.
You pick up the phone and she's in...
in this guy says, hi, this is John Gambling from WOR Radio in the Tri-State area and you're on the air.
Well, who was that? It was a DJ of a very large radio station in New York.
And he got a copy of the catalog somehow?
Yeah, he was on it. He said, he said, he said, he said, he sent him a copy because we sent the radio stations, television stations.
Anybody, any media we could think of.
And he got one. And he said, I've been telling my listeners about reading them parts of the catalog and I have a few questions for you.
What happened to those Italian camouflage jackets without the hood?
And he asked me several questions and I went on about mostly quoting the catalog.
And at the end, he said, and so what about anybody who's more interested and would like to get a catalog, you know, one of these catalogs?
And I said, I just have them send a dollar to PEO BUCKS 774 Mill Valley, you know, 94942.
And it was like, thank you, Patricia from Banana Republic.
And that was it? That was it.
And then a couple days later, did you start to get letters?
Sacks of mail. Sacks of mail.
With a dollar, every single one of these.
The post guy comes in dragging these huge canvas bags.
The post office was across the street in those days.
Yeah, radio stations. Every single one of them had a single dollar bill in them.
And so, and amazingly, because you were sending the catalogs out, not charging people, of course you needed them to get the catalog.
Now you were getting paid.
Yeah, we charged. Because the catalog probably cost you about a dollar to make.
Less than that. I know it was.
But we did put a dollar, even in the first one.
I think we put a dollar on every one.
We wrote it, but we sent them free the first 400 or something.
So now you've got all these dollar bills, plus you can send out the catalog.
But now you've got a mail order business.
And an even bigger mailing list that's growing.
That's amazing. So, but the store in general is still pretty sleepy.
Still kind of quiet. Yes.
Yes. After that, radio station in New York did a profile.
Did you start to get other media organizations approached?
We began to realize the power of that.
Absolutely. And more and more, there were more and more media.
And there was the fashion editor of the Los Angeles Times who basically said, these shorts in Banana Republic, the Banana Republic they're perfect for this summer.
And those shorts were really a breakthrough.
And so she says, this is the short.
And were these shorts that you were making?
No, no, no. These were short plus shorts.
These were short that we found in Zim's warehouse.
One of our trips over there as we're going through, I see out of the corner of my eye, this pile of khaki that almost looks like the same fabric as this original jacket that he brought back from Australia.
And so I went over and picked up this short and it had two buckles hanging off the side of really wide waistband.
But they were fantastic.
You could see they were fantastic.
And so you bought these?
And Mel kind of I think gasped a bit when I said, okay, we'll take them all.
And the LA Times fashion writer calls them in her column the shorts of the summer.
But they were styled. When I did the drawing I see.
Rolled them up and with some clever little phrases about Belthem correctly.
So women could wear them.
So I could wear them, belt them tight and so she caught the style of it.
And they sold out in like two weeks.
So you bought these for like two bucks a pop or something.
I think they were $250.
You sold them for $15? $16.
Okay, now there's a lot going on, right?
You've got catalog business and you're trying to grow and all these things.
And from what I understand, Patricia you were getting pretty overwhelmed because you were making a lot of the clothing and running the store and sending out the and doing the illustrations and the catalog was a lot of work.
I think you guys were also, I mean, you're married couple.
You didn't have kids yet but you were fighting too, right?
We were both stressed. We didn't really mean to blame each other for it but we were both just really stressed and not sleeping enough.
We were so, we went from from, you know, dawn to dusk working.
We were always working trying to keep this thing going.
Glenish, Patricia's not a quitter and I knew that she would not want really to shut this thing down.
I knew we couldn't go backwards.
We knew that we needed, at this point, we needed help.
We definitely needed help.
I mean, this wasn't, these were, in these days...
You didn't have the volume but you were able to visualize, well if this little store can bring in this much, if we got a store in a more populated area like San Francisco, we could, that would make up the difference because we'd have the margins probably the same margins there but a bigger volume and that'll get us through this and so you said to me, we need to open another
store and I'm there saying, oh my god.
When we come back in just a moment Patricia and Mel get a very attractive business offer that they can't turn down but then wind up regretting it.
Stay with us. I'm Guy Razz and you're listening to How I Built This.
Music Hey, welcome back to How I Built This.
I'm Guy Razz. So it's 1983 and despite the fact that Mel and Patricia are totally overwhelmed with their first store Mel manages to convince Patricia to open a second one this time in San Francisco same safari motif same zebra stripes on the outside but also some of the same problems.
So one of the challenges of your business was that pretty much every, most everything you were selling was one of a kind especially the things that you were re-manufacturing because you were buying weird articles of clothing for the fabric you were turning them into articles of clothing but that was it.
Once they were out, that was it.
Which is exciting, but it's challenging if somebody comes in.
That's when we realized that was the flaw in our business plan.
That was the flaw. We were selling something that was not you couldn't you couldn't replenish it.
Surplus, the surplus we were selling largely was from the Second World War and it was still around in the early 70s in the late 70s but we were fast depleting it and we realized, whoa what are we going to do?
We have a whole business that's built around this.
So you start to think about let's make our own line, let's just design this because I'm assuming you were putting a banana republic label and you were sewing that into everything now you want to scale it up, did you start to explore potential What we had to do, we first tried to find manufacturers who were making things that were similar to the kinds of clothes we would make.
By the way, this is the early 80s, I think 70% of clothing sold in America was made in America at the time.
We did find some of the places that made the original fatigues for the army in the south and find that if we didn't change anything with them, they could make us a small maybe like in North Carolina or Georgia or anything like that.
But you still need capital to finance that.
Did you have the capital?
Well, I think we were pouring every penny that we had back into doing that.
So yes, not to do it on any scale, but enough to make the clothes that we needed to make.
And we had great credit by then because we paid everything within 30 days or 60 days.
We learned that that was the trick.
And by the way, how did the San Francisco store do compared to the mill valley?
It did really well. It was like three times.
Just because it's San Francisco and that's a critical mass.
Yeah. Who were the kinds of people going into your shop in San Francisco?
Because it was a very particular style.
I mean safari and travel adventure gear khakis, browns, olive tones.
I mean, who were the people coming in to buy the stuff?
Well, I think we originally created the business for other people like us, ourselves.
I mean, we really were trying to sell to other creative people and writers, artists.
But I think it caught on.
It caught on. It got beyond that.
I mean, it went to everybody.
It was amazing how many people there were kids to grandmas.
And also there was a reaction against how much polyester was coming into fashion and we sold only pure fibers.
Yes. You were selling wool, cotton, silk, rayon, anything that was real.
Your prices were sort of between these sort of middle and upper most tiers.
It was like. I would say middle and lower.
In those days, we were selling.
But double what they would sell for in a surplus.
It was still affordable.
It was affordable. Less than what they would pay for in the gap.
Right. All right. So you've got the store in San Francisco and it's doing pretty well.
And in your mind, I mean, did you have any time to kind of reflect on what was the next step or, I mean, was it just let's get the catalog?
Let's just stay on this.
Opportunities were sending themselves by this point.
There was a real estate developer who opened shopping centers and he was a customer.
He loved the brand. He said, I want to put these doors in my shopping center.
He wants to put banana republic in my shopping center.
I think this is Merit Share.
Sure. Okay. Sure. Yeah.
And so Merit was a customer who came in frequently and he's a very lovely man and we liked him.
And he said, I said, Merit, I can't.
We're doing everything.
We're too busy. We don't even have time to figure out how to get this business staffed correctly.
And he said, he kept, he come back again and again and again.
And I think one day he came back and he said, it was just a bad day.
I said, no, no, Merit, not only will I never open a store in your shopping center, I'd sell this company to Mar-a-f-I could.
He looked at me and said, do you want to talk to Don Fischer who at that point was the owner of the gap, that Fischer family was basically, he's the guy who started the gap.
I said, sure, let's talk to him.
So, before we get into this part of the conversation, it sounds like, I mean, you were just, it sounds like that's the kind of response of somebody who was just overwhelmed.
Yes, yes. Totally overwhelmed.
We're almost four years into it at this point, I think.
We didn't ever, we never put the initial systems in place.
The business just kept happening so fast that we could never stop for long enough to just sort it all out so that it all could work.
And we didn't have, we didn't even know where to go to find the kind of people who could run this sort of thing.
We were so busy paying the bills, getting the salaries, getting the job, getting the orders in the meal.
We just, we didn't have time to withdraw and figure this out.
And both of us were working around the clock.
Alright, so you kind of offhandedly say, I sell the business before I do this and this guy, Merit Sher, says, let me introduce you to Don Fisher, the CEO of GAP.
Which by that point, in early, early 80s, it wasn't what it is today, but it was already a pretty significant...
Yeah, they already had 500 stores.
So it was a pretty significant, yeah.
And Don had started that himself.
And they were public. They were a publicly traded company.
On the New York Stock Exchange.
And he had started with a single store in 1968, I think, on Ocean Avenue selling jeans and records.
And Don Fisher wanted to come meet you.
Yeah. So he comes to the store in San Francisco and you meet him and what did you...
First of all, was he, did you get the sense that he was interested right away?
He was fascinated. He went through that store reading very carefully, every hang tag, looking very carefully at every single garment.
Right, because we had the story on a hang tag on every item.
Which fascinated him. You actually named the clothing and you wrote about this clothing and this and what's this and how's that and...
I remember him picking up...
We had these Falkland bathing suits for men.
Remember the British War in the Falklands in the 1980s when England invaded Falklands?
Which is down by Antarctica.
But for some reason they made these cotton tied on the side swim trunks.
Swim trunks. You can't buy this company.
It's not going to really...
It's a trend or something.
And he... So he basically backed, almost backed out of the deal at that last minute.
At that point we had a huge...
I mean the accountant who was figuring this out with us.
We had bills that we had to pay, accountant bills and legal bills and other kinds of bills for all this negotiation.
It was just... Frustrating.
But Don still wanted to buy the business.
Even though his board said don't buy this business.
So this one we went over to his house.
I want to buy this business.
But there's one thing. He said that you need to run it.
I said no. No! I don't want to sell my business.
I'm not looking for a job.
No! No! Basically that was my reaction.
He was like, oh my god, after all this this is where we are.
But he said, I will... as long as you're profitable I will completely fund it and you're on your own.
I'm not going to tell you what to do.
You have complete creative control.
You won't see me. It's your business.
I will give you every dollar you need to grow this business.
As long as you keep it profitable.
And you agree to that deal.
Reluctantly. I think Patricia wanted it more than I did.
I was sort of a maybe. But I thought, well, gee, if all of a sudden we have the money to do this, to design our own line to build the stores we want, you know, we could we could have fun.
And we could travel. So we agreed.
I mean, by a vote of yes, one yes and one maybe.
Banana Republic Board decided to sell to the Gap.
So, 1983 you become employees of the Gap.
No, employees of Banana Republic.
It's owned by the Gap. I got it.
Okay. But you guys are still running the company.
And with Gap's muscle, you're able to start working with factories to make clothes for you so you don't have to make them yourself.
And then, of course, you start opening more stores.
Like, I think the first one I think was in Palo Alto at the Stanford Mall, which is pretty fancy, pretty upscale.
And Patricia, you still got to design the store, right?
Yes. First, before we go down there, I remember the requirements to the site.
That you had to have an approved color for the awning and no neon and very low-key front.
And... I remember that.
It was suffocating to just read this.
I looked at it and thought, oh, no.
And you said, just pretend you haven't even seen it.
Just design it. Go ahead.
Which she did. Puzzle to this fancy mall in Stanford.
We sat down. I'll never forget this day.
We sat down around the table.
It was almost... This was exactly opposite of anything that they could possibly want in this mall.
And we should get... We were drawing the woman across the table.
I remember her name, Rosemary McAndrews.
She's the design director.
We slept the drawing across the table to her.
We're sitting there looking.
There's a minute of absolute silence.
And she looks up at me and she says, I love it.
I love it. I absolutely love it.
We look at each other. What?
And that changed everything.
That changed everything.
And you were the CEO? Yes, I was the president.
And you were the head designer?
Chief creative officer.
Really, this proposition was working out well.
By 1986 or so, you had dozens of stores.
You were doing, by one estimate, like $60 million in sales, which is pretty great.
But also, at a certain point, I guess some tension started to emerge between you and the higher ups at the gap.
And I think may have come to a head around 1987 when the stock market crashed.
Yes. We had this huge conference at the Claremont Hotel in Oakland where we brought all the store managers and regional managers from across the country.
And we were celebrating in the company.
And in the middle of a break, I walked out and I looked at a paper, a newspaper that was in the shop there in the hotel.
And it said, Dow falls 22%.
This was Black Tuesday.
Black Monday. Black Monday, sorry.
1987. Yes. It just happens that two or three weeks before that, the gap had reported earnings.
And they missed earnings and the stock had taken its own dive.
So it was already down substantially.
And then came a crash. Black Monday.
It went down further and suddenly they were the gap became interested in Banana Republic.
Everything was going fine.
We were doing quite well.
But the gap suddenly became edgy.
Don became a little nervous.
They were, they didn't quite know where things were going.
And so we were beginning to contribute to earnings.
And they began to have some ideas about how we could squeeze more earnings out of the company.
And it created some friction.
Right. So what were some of the you know, as they started to look into your business and started to presumably say, hey, you know, we think maybe you should expand out beyond adventure and safari and travel gear.
Is that what they were saying?
No, that was part of it. There were two different things.
I think that one was the way we were merchandising.
The way we were merchandising.
There was a shirt we sold in Indian cotton shirt that was beautiful.
We called it the Bombay shirt.
And we sold tens of thousands of these shirts all the time in various different colors.
And they were doing spectacularly well.
But it's at a certain point, Patricia said enough, we should stop selling this.
It's time to move on to something else.
Well, I could see that other companies were copying this shirt and selling it for lower prices.
In fact, there was a whole the limited started a line called Outback Red.
That was really a copy of Banana at a lower price.
And so they were copying a lot of styles, but especially this shirt.
But I was saying okay, now this is the time to stop this shirt because our customers aren't going to want to wear something that's being sold cheaper by another company in cheaper fabric.
So, Bob Fisher was running our merchandise department.
Bob Fisher was Don Fisher's son.
And he was really by the books data driven merchandiser.
So he said, well, you're crazy because you can't, how can you discontinue one of our best selling items?
And I explained to him that this was, it was a best selling item, but it wasn't going to continue to be a best selling item.
And I knew that. And that's something that's driven by intuition, which he did not get.
And so there was a tension between us and a tension that was kind of breaking up the spirit of the company.
And was there, I mean from what I understand some investors were also raising questions.
Some of them were saying, hey, this is what you're selling is a trend.
The analysts, because the gap stock had fallen dramatically.
And they were looking at banana Republicans saying, this stuff is just a fad and it's not going to, people aren't going to buy this stuff.
Yeah, they're saying it's too hot and it's too wild.
And we were now grown to a point where we were not a tiny company any longer.
Data did matter. But we we weren't entirely reverent of data.
We thought that there was other things that we had to be considered in our intuition.
We had, this company was part of our DNA.
Yeah. Was part of our fiber.
We knew when something was right and when something was not right.
And so we were getting suggestions.
When first of all, we had an agreement that would they would stay out of our business.
Yeah. We were now getting sort of more more urgent suggestions that we should make changes that didn't feel correct to us.
I mean, Don came into the office one day and said, you know, I think it's time that you're not going to be reporting to me anymore.
You're going to be reporting to Mickey Drexler.
And just to explain, Mickey Drexler had been brought in earlier by the Fisher family to do some sort of major rebranding at the Gap.
And he had just become the president of the company and then eventually he becomes CEO.
And he's kind of kind of a legendary guy in that in that industry.
But I guess you didn't want to work under him.
You said no. I said no. And our COO at the time his name was Ed Strowman was a real classic merchant.
And the moment he saw Mickey Drexler he said, beware.
He's a grabber. And I think what was going on is that Mickey was eyeing the success of Banana and wanted to get his hands on it.
And somehow or another that happened.
Now, Mickey Drexler is not here to defend himself.
And this is not a documentary show.
We're just taking your oral accounts.
So I will just say in his defense and not even in his defense but to say that from his perspective he thought I could do a better job and I want to take over.
And he does have a pretty good record, a successful record in running big retail businesses and some were better than others.
And of course he's considered to be...
But he's considered to be a pretty important guy in the apparel industry.
And I just want to say that in his defense.
But I understand you did not want to work.
This was your brand that you started.
You did not want to work for some...
Yeah. And the way he approached it wasn't civil.
And when you both decided we're out?
Well, at that point, yes, because this isn't what we bought into.
We started this business to travel.
We started this business to more...
Not to become rich, but to be free.
Yeah. And we were free. We were free.
We had made enough money to be not terribly wealthy but independently wealthy.
And that was enough. Enough is enough.
And so, you leave this company.
At this point you had two kids.
Two little ones, right?
Just one. And, you know, Banana Republic is now you wash your hands of it.
And it goes its own way. And you guys...
And I should say that it went for years.
They realized they made a terrible mistake.
They had no idea the devotion that the customers had to the...
Original. Authenticity of the brand.
And for years, they just kept bringing one crew after another after another.
And the company just kept flailing for years and years and years.
Yeah. And, I mean, today it's...
Today they're sort of resurrecting it and they're going back to the tradition originally, which is interesting, but...
They're bringing back some of that.
But it still became like an office clothing company.
Yeah. Clothes at a higher price.
Yeah. From what I understand in 1988, you guys decided to focus on being parents for a couple years.
And what a gift. You could now I mean, you had enough money to, as you say, not be fabulously wealthy, but enough money to actually have a comfortable life and to not have to worry about a paycheck, at least for some time.
And you could be with your kid.
Yes. And then you had another child that I think...
For years. And did you think that you would do another business?
We weren't looking to do another business.
No, we weren't looking to do another business.
I was... I had this sense that when I left, first of all the whole thing was about 10 years from start to finish for us.
78 to 88, yeah. 78 to 88. And I felt at the end that I had somehow been on a track to succeed, achieve, succeed, achieve, succeed, achieve.
And I thought, whoa I want to just back up from this.
And so I went away to a I'd never done anything like this in my life.
A vipassana meditation.
Silent meditation. I went away to this retreat.
The rules were no reading, no writing.
You sit and meditate for all day.
All day. And it was shocking to me to...
my mind goes so fast to ever have to go through something like that.
And by the second or third day I was sitting there and I had the worst headache of my life.
You were going through caffeine withdrawals?
Deep caffeine withdrawals.
Because there's no coffee.
No coffee. No coffee. And only herbal tea at this place.
And so I thought, my God I never want to have a headache like this.
So I spent the rest of the meditation dreaming about a tea company that I would start.
Tea. How did that... it just came into your mind in that sound?
Yeah, because I know if coffee did this to me I'm not drinking it anymore.
And I happened to mention it to I went to a...
at that point I was on the board of a group called the Social Venture Network which is about socially responsible businesses.
In those days that was a new concept.
Yeah. And I went to a conference and I somehow found myself on the plane with a fella who was there and he sort of talking to him and I said, well what would you do if you did another thing?
I said, well I'd do a tea business, you know.
And I found myself talking about it and getting excited about it.
And I sort of dove in trying to learn about it and understand it.
And so I decided let's start...
let's do this cause... let's start the Republic of Tea.
You were going to call it the Republic of Tea.
From the day... just like Banana...
Were you worried the Banana Republic would come after you?
Well, Don called. Don called.
As soon as he heard. Yeah.
This thing called the Republic of Tea.
In other words, should I sue you or should I not?
Right. And I explained to him.
We had a nice relationship and he understood that we were not going to sell clothes at the Republic of Tea.
No clothes. He was okay with that.
And you wanted to do full leaf tea.
Yeah. And to have it... and so I'm assuming once again, you're recruiting the best illustrator you know which is your wife.
Who's now pregnant with our daughter.
To start to think about designing what this would look like.
Right. Because you wanted it to stand out on the shelf.
You know, just like our clothes would stand out.
How did you finance it? Did you self-finance it at this point?
Yes. It was wholesale. We weren't going to have it retail still.
So it was a lot lighter on our hands.
Yeah. We weren't going to do retail.
It was wholesale. It was another business altogether that we hadn't done before.
At that time... The fun of it was as it was with Banana Republic was inventing it.
Yeah. Starting it. This is where the excitement came for us.
As it began to grow a little bit it was back to the same old problem which is basically you have to buy the tea before you sell the tea.
So you're always short money.
You're always needing more money.
Yeah. And at this point our son was just a couple of years old.
Our daughter was on the way.
Our daughter had just been born.
And we did not want to plunge back into that business.
We said no. So I guess you only kept the business for like three years and then you sold it to a businessman and a beverage guy.
Like a guy who was in wine and sparkling water.
Right. And this was Ron.
This was Ron Rubin. Yes.
Unlike Banana Republic he stayed reverent.
Yeah. The Republic of Tea stayed reverent to the original concept.
We really loved that. I mean the tea business we were very proud of what Ron and his son have done with that business.
And they still own it. Yes.
They still own it. It hasn't sold it.
His son owns it. His son owns it now.
Authentic as ever. It's a pretty you know decent size brand.
Yeah. It's always very you know he's told me many times I said well in a couple of years this thing is going to be and I named a number and he said wow we've exceeded that many many times over.
So he's a very happy new owner.
I from what I understand from like the conversations and brief conversations we've had before this interview you've been you know sort of you know some kind of retires in the right word but you have chosen to live a life that I think is actually kind of the dream.
I mean you're still married.
You're about to hit 50 years of marriage.
You've got two kids who your daughter's a designer.
Your son's an artist. She's a fashion designer.
She's got her own label that she started.
And you guys you know have been able to do what you want which is to get to have the freedom to travel and to you paint Mel and obviously Patricia you paint and I mean it sounds like a pretty awesome outcome.
We're very lucky. We're very lucky.
I mean you didn't you didn't walk away with billions of dollars or hundreds of millions or whatever you know but you need it.
What do you deal with all that money except have problems.
I mean who needs that kind of money.
Yeah. We have each other and we have a good relationship with our kids and it's just a delight to go through our days together.
Being through 50 years of this you go through so many phases but I would say I'm more in love with my wife now than I've ever been.
I love that. And I'll go ditto with my husband.
You gotta say that. Yeah.
Now that he said it. Yeah.
She's got to say that. I have trouble when we walk out of here.
Mel when you think about everything that you've achieved and you know and all these amazing brands that you've been part of and created with Patricia how much of your of where you got to do you think has to do with the work and your intelligence and how much do you attribute to luck.
Oh I would say mostly luck.
We say go with the flow but don't forget to row.
I mean in a sense being in the right place being born at the right time.
I think that's really true but just on the side of luck I want to add that I think you can encourage luck by if you're willing to see that there's really assets and liabilities.
There really is a silver lining of some kind in every crowd.
I guess I'm just an optimist but there's there's always a possibility to work with at least in our more lucky sheltered world.
You know and I think one of the biggest lessons when we talk about it meditation retreats and what comes is that to me the biggest Tiffany was that not knowing is the greatest strength because then you're open to everything.
That's Patricia and Mel Zeigler co-founders of the Republic of T and Banana Republic.
By the way their original store in Mill Valley California is no longer a Banana Republic it's now a rug store but if you're nostalgic for vintage banana you can always check out the website AbandonedRepublic.
It was put together by old school Banana Republic fans and on the site you can find the old catalogs and sketches of the original clothing like the Spanish Paratrooper shirt, the Egyptian cotton short sleeve bush jacket and of course the authentic Bombay Bowler.
Hey thanks so much for listening to the show this week please make sure to click the follow button on your podcast app so you never miss a new episode of the show and as always it's free and if you're interested in insights, ideas and lessons from some of the world's greatest entrepreneurs sign up for my newsletter at GuyRoz.com This episode was produced by Kerry Thompson with music
composed by Remtine Arabluy.
It was edited by Neva Grant with research help from Malia Agudelo and engineering by Quacy Lee.
Our production staff also includes JC Howard Sam Paulson, Catherine Seifer Alex Chung, Elaine Coates, John Isabella, Chris Massini and Carla Estevez.
I'm Guy Roz and you've been listening to How I Built This.
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