Edmund Morris Discusses His Controversial Biography of Ronald Reagan.

Show: FRESH AIR
Date: OCTOBER 04, 1999
Time: 12:00
Tran: 100402np.217
Type: FEATURE
Head: Interview with J. Peterman
Sect: Business
Time: 12:37

This is a rush transcript. This copy may not
be in its final form and may be updated.

TERRY GROSS, HOST: John Peterman is best known for two things, the J. Peterman catalog, which he created, and the character of Peterman on "Seinfeld," which was based on him.

Peterman became a character at the end of the sixth season in 1995. Here's the scene in which he first appeared. Elaine, who is out of work, is walking down a New York street through the rain crying about losing her manicurist when she runs into J. Peterman, played by John O'Hurley.

(BEGIN AUDIO CLIP, "SEINFELD")

JOHN O'HURLEY, ACTOR: That's a very nice jacket.

JULIA LOUIS-DREYFUS: Oh, thanks.

O'HURLEY: Very soft. Huge button flaps, cargo pockets, drawstring waists, date by (ph) swing vents in the back, perfect for jumping into a (INAUDIBLE).

LOUIS-DREYFUS: How do you know all that?

O'HURLEY: That's my coat.

LOUIS-DREYFUS: You mean, you...

O'HURLEY: Yes. I'm J. Peterman.

(END AUDIO CLIP)

GROSS: Peterman ends up hiring Elaine as a copywriter for his catalog after she impresses him with her adventurous prose. The catalog copy is part of what made the real J. Peterman famous. Instead of straightforward descriptions of the products focusing on colors and dimensions, the J. Peterman catalog offered flowery descriptions in romantic language emphasizing the exotic locales the products originated from.

As the catalog business got more successful, Peterman branched out into retail stores, but the business went bankrupt early this year. Peterman explains why in the current edition of "The Harvard Business Review."

The company has been sold to the women's retailer Paul Harris Stores, which now owns the J. Peterman trade name and runs the J. Peterman Web site. Before we discuss the bankruptcy, let's find out why John Peterman wanted such romanticized descriptions in his catalog.

JOHN PETERMAN, J. PETERMAN CATALOG: I was told by many experts that people won't read long copy, they don't have the time, just give them the price and tell them what it is and then move on, and that's what the catalog business is all about.

Well, I wasn't sure that people would read long, interesting copy, but I knew that they wouldn't read short, boring copy, and that's why they didn't read copy. So we decided right from the very beginning to write long copy that told a story about each product, and felt that people would read it. We actually buried the price within the copy so that people wouldn't just look at the price, they'd read the copy.

GROSS: I guess that's good, because the prices were pretty high. (laughs)

PETERMAN: Well, yes. We sold to an upper income, upper educational level customer who would appreciate the uniqueness, the authenticity, the romance of the particular items that we were selling.

However, we also had a lot of very price-competitive things, but we also had a lot of very expensive things. And if you want something that is truly unique and authentic, sometimes it costs a lot of money. And that was another thing that I was told that you absolutely could not do was sell a $3,000 sofa in the catalog, (INAUDIBLE).

GROSS: Did you sell a lot of those $3,000 sofas?

PETERMAN: Not in sheer numbers, but in dollars, if you'd sell 10 sofas, that's $30,000, and on a page in a small-circulation catalog, that's good.

And we also had a shirt that I found in Atavalo (ph) in Ecuador called the Atavalo shirt, strangely enough, and that sold for $29. And it was a peasant shirt. I bought it -- I actually bought it off the back of a fellow -- of an Ecuadorean in the marketplace.

GROSS: Now, you think that one of the reasons why your company had to declare bankruptcy was that you grew too big. What was the plan that you think basically ruined your business?

PETERMAN: There were several aspects, and I'll take you through it very, very quickly. In 1995 there was a huge increase in paper prices, paper prices went up about 40 percent, and there was a large increase in postage prices, they went up about 17 percent.

And we had been growing rapidly, $10 million a year, you know, 30, 40 percent a year, up until that point. And when those paper and postage prices, increases, came in, we actually lost money in 1995. And our response rate seemed to decrease a little bit. And so I thought that, Well, it seems as though that we've reached a kind of ceiling or a level of the niche of the -- or the owner's manual, and what we do.

Intuitively, I knew that this niche was far bigger, because people -- all people like romance, authenticity, excellence, wondrous journey. They like all of those things. And I said, We're just not able to reach them with this medium. So my thought was in 1995 that in order for the business to attain its potential that we should expand more rapidly into retail.

GROSS: Open up stores.

PETERMAN: I also -- Open up stores. And there was ample evidence to say that four out of four people shopped out of retail stores, one out of four people at the time shopped out of catalogs. So there was a far larger market. And, of course, the question was, how are you ever going to transfer the ambience and the charisma of the catalog into a retail setting?

And just as all the experts told me that I couldn't use art and long copy in the catalog and make it work, I felt that I could make it work in a retail setting, which we did. We were able to transfer the ambience and the charisma and the romance and the uniqueness of the catalog into retail settings.

So additionally to that, I had pressure from venture capitalists that, you know, you're going to have to reinvent yourself, you've hit the ceiling, how are we going to get our money back, et cetera, et cetera.

So my thought at the time was that, OK, going into retail was a way to grow the business, and still maintain who we were, but get bigger.

GROSS: What are some of the problems you ran into once you got bigger, maybe too big?

PETERMAN: Several things went wrong. There are two theories of organizational development in a growing company. One theory is that you grow the business and the organization lags behind, and the other theory is that you build the organization for the anticipated sales to come. The danger with the first theory, of having your organization lag behind, is that when the growth comes, you may not be prepared to handle it with your organization, and the company crumbles from within.

The danger with the second scenario, of building the organization in anticipation of the growth that is to come, is that the growth doesn't come, and you're stuck with a very high overhead, and that causes a lack of money, or what's known as a liquidity crisis. And that's exactly what happened to the J. Peterman Company, is that we had developed a large, expensive organization in anticipation of the growth, and we never quite got to the point where that growth kicked in.

GROSS: My guest is John Peterman, founder of the J. Peterman catalog. His company declared bankruptcy earlier this year and then was bought by another company. This is the same J. Peterman who became the basis of a character on "Seinfeld."

Let's take a short break here, and then we'll talk some more.

This is FRESH AIR.

(BREAK)

GROSS: My guest is John Peterman, the founder of the J. Peterman catalog. This is the same Peterman who became the basis of a character on "Seinfeld." The catalog declared bankruptcy early this year.

There's a character based on you in "Seinfeld," you know, who had the J. Peterman catalog, and Elaine on "Seinfeld" wrote copy for the catalog. How do you think that affected the business, while you were still in business?

PETERMAN: A good question, and 70 percent of the people who watched "Seinfeld" didn't realize that we were a real company when it hit in '95 and '96. The customers who were buying from us and knew about us and saw it on "Seinfeld" thought it amusing, but it didn't make them buy any more than they were already buying. And people who didn't know that we were a real catalog didn't rush to us, you know, and find out that we were real.

So it really didn't affect business at the time. What it was doing was building name recognition to be taken advantage of at a later date over a period of time. I declined, as I said in the article, to commercialize "Seinfeld" and J. Peterman, i.e., run ads saying, The Real J. Peterman, et cetera. I wanted to let it set in over time, have it be a discovery for people that, My God, it's a real company! And no, he's nothing like John O'Hurley, who played me on "Seinfeld."

GROSS: You're not?

PETERMAN: No. But John and I are friends, and he's a great, great guy, and he's funny and he's wonderful, but it's just not me.

GROSS: How did you find out that there was going to be a character based on you on "Seinfeld"?

PETERMAN: I was taking the redeye back from Los Angeles, and I got into the office the next morning, and they said, "You were on `Seinfeld' last night." And, you know, I always get accused of being in nefarious places. And I said, "No, I wasn't." I said, "I have proof I was on an airplane."

And so I saw the tape, and that was the first I knew about it. They didn't ask or anything else. And then I guess the Soup Nazi sued them, he was on at the same time. And so I got a call from the lawyers, and I guess their lawyers went to Seinfeld and said, Maybe you better talk to Peterman before you proceed with this.

So I said, Sure, that's fine. And I used to sign off on the scripts about six weeks before they went on.

GROSS: So that...

PETERMAN: But I never changed any of the...

GROSS: You never changed any.

PETERMAN: No.

GROSS: Did you see your character on "Seinfeld" as being a compliment, or did you think that they were mocking you and the catalog?

PETERMAN: They were Seinfelding me.

GROSS: (laughs)

PETERMAN: And that's what their show was based on, that's what their art was. And I did not consider it a compliment, I did not consider it an insult. I used to watch the shows sometimes when I was on there, and I would laugh right along with it. I guess my ego doesn't run that way. It must run in another form. But I never was embarrassed or insulted about it, and I never got a big head about it either.

GROSS: Now, you did add an Elaine Benes suit to the J. Peterman catalog.

PETERMAN: Right.

GROSS: Just describe the suit and why you added it.

PETERMAN: It was just a tailored woman's suit. But as I said in the article, that was a little crack (ph). We did it just kind of to wink at "Seinfeld," and to wink at the consumer, and to wink at Elaine. And normally when we wink at somebody, they normally sue us, but I guess she forgot that -- or remembered that I didn't sue them. So it was a quid pro quo.

But I was looking at it as a wink.

GROSS: After going bankrupt, do you still love the idea of being in business, or does all the risk of business now not seem quite as exciting and seem a little more frightening?

PETERMAN: No, I still like the romance of being in business. Now, will my next business tie me up with things that I'm not talented in? No. Am I a risk taker by nature? Yes, I mean, that's what drives me forward, that's why I go some of the places in the world that I go to.

I mean, that's what life is about, Terry. My life isn't -- if you get knocked down, you make a mistake, and then you go away, you've stopped living life. And I think that there's just a huge amount more to living life.

GROSS: Well, John Peterman, I want to thank you very much for talking with us.

PETERMAN: Thank you.

GROSS: John Peterman. He explains how the J. Peterman Company went bankrupt in the current edition of "The Harvard Business Review."

FRESH AIR's executive producer is Danny Miller. Our engineer is Bob Purdick. Dorothy Farabee (ph) is our administrative assistant. Roberta Shorrock directs the show.

I'm Terry Gross.

TO PURCHASE AN AUDIOTAPE OF THIS PIECE, PLEASE CALL 877-21FRESH
Dateline: Terry Gross, Philadelphia, PA
Guest: John Peterman
High: Former mail order magnate John Peterman's text-heavy apparel catalogs spun stories of adventure and earned him a place as a fictional character on the hit TV series "Seinfeld." But his business failed, and now he's written an article in the current issue of "The Harvard Business Review" to relate what happened.
Spec: John Peterman; Business; Entertainment; "Seinfeld"

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Copy: Content and programming copyright 1999 WHYY, Inc. All rights reserved. Transcribed by FDCH, Inc. under license from WHYY, Inc. Formatting copyright 1999 FDCH, Inc. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to WHYY, Inc. This transcript may not be reproduced in whole or in part without prior written permission.
End-Story: Interview with J. Peterman
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