Man in a Hurry: A Mogul In Sporting Goods at Age 22
Compared with Michael G. Rubin, entrepreneurial whiz kids Bill Gates and Michael Dell were late bloomers. They were old enough to vote when they started their companies.
Mr. Rubin opened his first retail store at age 14. By age 16, he had built a small chain of ski-gear outlets. By age 18, he had narrowly escaped bankruptcy.
Today, at 22, Mr. Rubin is an established deal maker in the world of sporting goods. He predicts that the company he founded five years ago, KPR Sports International Inc., will earn $5 million on sales of $50 million this year, mostly by buying discontinued athletic shoes from manufacturers and selling them to retailers.
The young mogul is now about to make another leap in the footwear business. On Friday, a proposed deal was announced in which Mr. Rubin would provide Ryka Inc., a troubled maker of athletic shoes, with $8 million in financing through MR Acquisitions Inc., a new private company; in exchange, he would receive up to 40 percent of Ryka’s stock. The deal calls for Mr. Rubin to be named Ryka’s chairman and for Ryka, based in Norwood, Mass., to move its operations to King of Prussia, Pa., where KPR has headquarters. The two companies will operate separately.
Last month, KPR acquired Trail Sports, a Dutch sporting-goods concern that will allow KPR to expand distribution activity in Europe. International distribution already accounts for half of KPR’s business. This summer, KPR will launch Yukon shoes, its own line of hiking-style footwear.
``I want KPR to be a $1 billion business in the next five to 10 years,″ Mr. Rubin says. KPR, which employs about 65 people world-wide, had sales of $27 million last year, up from $18 million in 1993.
It is a bold vision, but boldness is a Rubin trait; in his teens, he confesses, he was perhaps too bold. When he started buying from manufacturers, he once agreed to pay ``like, $1,000 a week in interest″ on a $17,000 loan from a business associate because he needed cash, fast.
Mr. Rubin remains a man in a hurry. Bud Clark, a footwear buyer, says he once rode in the passenger seat of Mr. Rubin’s speeding sports car and shifted gears while Mr. Rubin steered and made business calls on two portable phones. ``It’s the kind of thing nobody would believe unless they’d seen it,″ Mr. Clark says.
``He couldn’t live without that phone,″ sighs David S. Mandel, Mr. Rubin’s lawyer for five years. ``A couple of years ago, we went to Dallas to see the Philadelphia Eagles play the Cowboys, and the first thing we had to do was rent a portable phone. He logged 240 minutes of time on that phone.″ Among other advantages for Mr. Rubin, his practice of making deals via phone instead of face-to-face has helped him bypass questions about his age.
Cellular telephones are one of Mr. Rubin’s few concessions to technology. ``Technology bores me,″ he says.
The entrepreneur’s diapers-to-riches story began nine years ago, with $2,500 in bar mitzvah money. As a 13-year-old, Mr. Rubin started a ski-repair operation in the basement of his parents’ home in suburban Philadelphia. Soon he was taking in ski equipment on consignment. Eventually, he built up a small sales operation.
Because of his age, many new clients and acquaintances still assume that his company is his family’s business. In fact, his father, a veterinarian, and mother, a psychologist, tried to discourage him from pursuing the business. ``They told me to go to school and not be crazy,″ he says, adding that he was a mediocre student.
When he was 14, he persuaded a local strip mall to grant him a month-to-month lease (his father reluctantly cosigned the contract) and opened the first of five East Coast ski shops. He got out of classes at 11 a.m. each day to work at his sporting-goods store as part of a cooperative-education program. ``I grew up way too quick,″ he concedes.
Later, when Mr. Rubin’s ski stores ran into trouble with creditors, his father lent him $40,000 to pay off creditors but made him promise to go to college. He entered Villanova University but dropped out after a semester and a half. But he paid back his parents, Ken and Paulette, and named the company after them.
When he was 17, Mr. Rubin also discovered the closeout business, in which distributors buy manufacturers’ overruns and discontinued merchandise for sale to retailers. He says he stumbled on $200,000 in overstock ski equipment that the owner wanted to unload for $17,000. Mr. Rubin bought it and then sold it in about a month for a tidy profit.
In 1990, he and a partner formed Nationwide Liquidators Inc., KPR’s predecessor, to buy and resell unwanted sports gear. In a few months, Mr. Rubin had made enough money to buy out his partner. He eventually sold the ski stores to concentrate on the closeout business.
If industry veterans resent working for a 22-year-old, they aren’t saying. ``I’ve never even thought of looking back,″ says 36-year-old Daniel J. Berkowitz, a former product-development manager for retailer J. Baker Inc. who joined KPR as general manager in February.
Looking ahead, Mr. Rubin says the company’s foray into a new brand of footwear is part of a strategy to offset slow periods in both the retailing and closeout businesses. Instead of simply stocking shoe makers’ leftovers, usually purchased in bulk, KPR will be able to sell its own shoes to its network of discount and sporting-goods stores.
Mr. Rubin admits that he has another motive: ``A little has to do with ego and glory. I can’t wait to walk down the street and see someone wearing a pair of Yukon shoes.″
Mr. Rubin works 12-hour days but usually doesn’t work on weekends. In his spare time, he plays tennis or basketball and occasionally attends professional ball games in Philadelphia.
Mr. Rubin says he plans to keep the company agile and free of bureaucracy as it grows. ``I don’t want to have meetings to discuss meetings,″ he says. ``The day we lose that entrepreneurial spirit, I should pack my bags.″