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Above:
Paul Cahn
STEP
BY STEP
By Kevin Kipp
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Starting
on a shoestring, Paul Cahn and his partners have created a $245
million footwear phenom.
At Elan-Polo
Inc.—designers, importers and marketers of men’s, women’s, children’s
and bears’ footwear—not one soul is assigned to public relations.
But the absence of a solicitous flack hardly prevents them from
telling their story effectively.
Why would it?
After all, Elan-Polo sells $245 million of footwear annually to
retailers, and doesn’t operate a single factory.
Rather, Elan-Polo locates factory output from around the globe
to match with orders from shoe stores, discount chains, department
stores and Build-A-Bear Workshops.
“We sell primarily to large users in the United States,” says
Paul Cahn, co-chairman and CEO of Elan-Polo. “Wal-Mart orders
hundreds of thousands of pairs at a time, but we sell to individual
stores if they can satisfy volume requirements.”
So what’s a minimum order? Five hundred pairs...1,000...144?
“Eighteen pairs and up,” says Cahn, in a slightly wry, gently
accented tone. “We have consistently had one-store customers since
the ’60s, and we hope that continues for many more years.”
Isn’t it difficult to focus on 18 pairs, when Enormo-Mart chains
want you tracking their orders?
“They’re all good customers,” he says. “The guy who buys for one
store needs the shoes as badly as the guy who buys for 5,000 stores.”
Elan-Polo has its shared corporate headquarters in St. Louis and
Nashville. They have sales offices throughout the United States.
They have distribution offices in Canada, Australia, France and
San Salvador. They have a network of sourcing offices in Brazil,
India,Vietnam, Indonesia, China, Taiwan and Hong Kong.
Not surprising then that Cahn advocates Free Trade. But his considerations
exceed his own mercantile interests. Asked about permanent trade
status for China, he says, “I have a strong opinion about trade:
I am very much in favor of open trade with everywhere, period.
It leads to a better understanding of other cultures and less
likely a chance of military, social or economic confrontation.
“The consequences of the protectionist world trade policy in the
’20s and ’30s were not at all beneficial,” he continues. “Protectionism
is like a governor on a car. When you need to pass, you can’t;
and that’s dangerous.”
Cahn’s perspective on the politics and economics of that era didn’t
come from book-learnin’. He was born in Mainz, Germany, in 1925.
“On account of Hitler, the persecution, and the anti-Semitism
in Germany, the family left, and moved to Canada in the beginning
of 1939,” Cahn says.
He left school in ninth grade, but never stopped learning. At
16, he took an apprenticeship in a handbag factory.
“Within two years, I realized the handbag industry was not essential.
I wanted to have a good foundation in a very basic trade, and
became employed by a shoe factory in Montreal.”
He learned enough to earn a promotion to foreman. The United States
appealed to his ambitions. He moved to New York in 1947. Unable
to find room in the union, or work in union shops, he worked at
non-union factories. On his way to foreman, again, Cahn learned
the practice and principles of mass production.
Wanting to learn more about shoes, I moved to design and pattern-making
school for shoemakers in Lynn, Mass.,” he says. “I also joined
the shoe-workers union.”
He returned to New York, found it easier to get work in a shoe
factory and joined a “superintendents’ organization.”
“I noticed the better foremen were out of jobs, which concerned
me. I got the feeling of insecurity and started looking for something
more secure. My uncle with a Ph.D. said, ‘If you want to get ahead
in the world, sales is the way to go.’ I immediately told my employer
that I was going into sales.”
Disappointed, but seeing opportunity, the factory gave Cahn a
territory with two house accounts. “Anybody else I could sell
would be my accounts,” Cahn says.
The territory essentially amounted to the United States, outside
of a Chicago-to-Boston, northeastern swath. Although Memphis was
the center of his territory, he says, “We liked St. Louis better
and we set up home here in ’60. By ’65 selling had become successful,
and I hired other salesmen to work under me.”
That was Cahn Shoe Associates. Along the way, he added more eastern
factories, and eventually Cahn entered partnership with one of
them.
“They wanted to start a new business, importing out of Brazil
and later India,” he says. “We grew and changed and got partners.
Eventually I left that to associate with Joe Russell, to form
Elan Imports in 1976.”
Cahn had married a Canadian, Elissa, in 1956. Russell’s fair half
is Anne. Hence, El-Anne...ElAn...Elan. “We liked the fact that
when we put the two together it sounded French,” Cahn says.
In a telephone interview from the company’s Nashville digs, co-chairman
Russell says, “Paul and I worked together at a previous company
in which he was a partner. In 1976 I was preparing to go into
my own business. He had liquidated that partnership. A mutual
friend suggested it might be beneficial for us to sit down and
talk about a partnership.”
In the early days, the company banked in Nashville, and so headquartered
its corporate self there.
When Elan began importing athletic footwear in 1980, Russell and
Cahn (still living in St. Louis) came up with the Polo label and
a second corporate address. “We were concerned that we would have
too big a percentage under one name, that no customer would want
to be too dependent on one vendor,” Cahn explains.
That was the wrong concern it turns out,” he says. “We combined
when it became non-consequential.”
Nowadays, Russell explains, the corporate offices in St. Louis
focus on sales and product development. The corporate offices
in Nashville focus on backroom functions like accounting, logistics,
data processing, communications and customer service.
Russell—like Cahn speaking with a slight accent, albeit a drawl—is
delighted they talked in 1976, and grateful that Cahn likes
to share triumphs.
“Paul was already wealthy and successful,” Russell says. “I
was just preparing to go out on my own. I had a house note,
a car note, two kids, a pregnant wife and a pregnant dog. So
he offered to put up the equity, and I put up sweat equity.”
Russell: “It’s been a wonderful partnership for 25 years.”
Russell isn’t the only one who Cahn helped in 1976. That was
the same year he co-founded Foot Action Inc., with three other
partners.
“Charles Cristol conceptualized the idea,” Russell says, “and
Paul again brought to the table the financial strength, management,
drive and the energy to move the organization from one store
to 135 stores.”
Eventually, Russell says, Melville Corporation bought Foot Action
for $50 million.
Seems there’s money in shoes. “Paul and his partners caught
it at the right time,” Russell says.
Cahn and Russell haven’t done so badly either. According to
the St. Louis Business Journal Book of Lists’ roster of our
fair city’s largest privately held corporations, Elan-Polo employs
400 worldwide, 65 in St. Louis. In 1998, sales were $245 million.
Russell says, “We handle some transactions as the importer of
record, but in most of our transactions we operate as the agent.”
Annual sales and their own company aside, Russell knows of many
circumstances in which Cahn’s “financial backing, drive and
determination made the difference. He enjoys success in its
own right, not just for the money.”
Maxine Clark, chief executive at retail concept phenom Build-A-Bear
Workshops, has known Cahn for some 15 years, as a former buyer
for Venture Stores and Payless Shoe Stores. After a brief hiatus,
she once again is a buyer of Elan-Polo’s imports.
“I learned a lot from watching him operate when I bought shoe
shoes [as opposed to ‘bear shoes’],” she says. “There’s lore
about Paul in the shoe business, about the quality of people
he hires and how well he trains them. He hires them young and
shows them trust and confidence.”
Clark says Paul himself is a student of retail, and loves to
observe what others are doing. He frequently takes his proteges
window shopping at the mall.
Fred Eller, president and chairman of Enterprise Banking is—like
Russell and others before him—both delighted and grateful that
he met Cahn. “Paul seems to get as much a charge out of other
people’s success as his own,” he says.
“In 1988, we met through a mutual friend in a business transaction,”
Eller says. “Paul is really bright, always thinking...and you
can see it.
“I remember calling on him when we just started the bank (also
1988),” Eller says. “The more we talked, the more he was interested
in what we were trying to accomplish. We visited occasionally,
and at the time of our second stock offering he participated.
We knew he would be a great board member.”
(According to a dog-eared SEC Form 10-K we dug up, Cahn was
a director of the bank from 1991 to1993, and 1995 to 1996: he
has been a director at Enterbank Holdings Inc. [of which Eller
is also chairman and CEO] since 1996. Also, according to press
reports, the bank has grown to approximately $650 million in
assets with the acquisition this June of a bank based in Overland
Park, Kan.)
Asked what qualities make great board members, Eller began methodically,
“First they have to care about the business, and not in a casual
way. They have to be almost livid. The holding company is almost
as important to Paul as it is to the people who work here every
day.
More on board qualities: “Two, they need to not just accept
everything we [bankers] do and say, but to think about the alternatives,
to think two or three steps down the road.”
Still more: “And three, it’s important that they then help monitor
decisions, to keep going in the same direction we’ve agreed
to.”
Eller, in conclusion, on Cahn’s qualities: “Paul has performed
beyond our best expectations. Whatever matter we are discussing,
he helps think about it, he helps implement it, and if things
don’t go exactly according to plan, he’s there to help us reach
our objectives.”
The two have become chums, meeting at least once a month “at
a Chinese restaurant on Brentwood for lunch,” Eller says. “We
talk about banking, his business, whatever comes to mind.”
Asked why Cahn became so engaged with Enterbank Holdings, Eller
says, “He liked that we were starting from the ground up. We
were in a formative stage, and he knew he could have a major
impact. He also knew we would listen to what he said, and that
what he said was going to make a difference. We’d never be where
we are without him.”
Asked who else could speak familiarly about Cahn, Eller suggested
that a long list of admirers would include those who know him
“as an art collector, a businessman and a mentor. He has been
one of the best mentors I’ve had.”
More on board qualities: “Two, they need to not just accept
everything we [bankers] do and say, but to think about the alternatives,
to think two or three steps down the road.”
Still more: “And three, it’s important that they then help monitor
decisions, to keep going in the same direction we’ve agreed
to.”
Eller, in conclusion, on Cahn’s qualities: “Paul has performed
beyond our best expectations. Whatever matter we are discussing,
he helps think about it, he helps implement it, and if things
don’t go exactly according to plan, he’s there to help us reach
our objectives.”
The two have become chums, meeting at least once a month “at
a Chinese restaurant on Brentwood for lunch,” Eller says. “We
talk about banking, his business, whatever comes to mind.”
Asked why Cahn became so engaged with Enterbank Holdings, Eller
says, “He liked that we were starting from the ground up. We
were in a formative stage, and he knew he could have a major
impact. He also knew we would listen to what he said, and that
what he said was going to make a difference. We’d never be where
we are without him.”
Asked who else could speak familiarly about Cahn, Eller suggested
that a long list of admirers would include those who know him
“as an art collector, a businessman and a mentor. He has been
one of the best mentors I’ve had.”
Clark, isn’t
surprised that Cahn is known for a range of roles, especially
that of mentor. She suggested Cahn’s official title at Elan-Polo
should be changed to “Chairman & Champion.”
“One of
his very youngest people called to talk about putting shoes
in our stores,” Clark says. “Other contacts in the industry
said, ‘When you’re ready for shoes, call me.’ Instead of waiting
for me to call, [Elan-Polo’s] Mike Rich called me.
“They provided
the fashion that they have in their regular line, only they’re
bear-sized. They created the mold for the product, labeling
and packaging. We have clogs, sandals, hiking boots, western
boots. We’ve had fun, and I think they enjoyed working on this,”
Clark says.
She says
Cahn also enjoys art and in fact is regarded as an aficionado.
He joined the Saint Louis Art Museum’s board of trustees in
January.
Brent Benjamin,
director of the museum says, “Paul personifies passion when
it comes to art and the Saint Louis Art Museum. He has an endless
curiosity and enthusiasm for a wide range of art.”
Even before
joining the board, “He’s been a lender of works of art,” Benjamin
says. “He’s supported a number of acquisitions, exhibitions
and publications. He’s a never ending source of ideas and inspiration...a
pleasure to know, personally and professionally.”
So many
agree.
Kevin Kipp runs Bubble Communications, a creative services and
community relations firm in St. Charles.
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