The Story of Ray Markman-Part 11
by John Jonelis
I’m trying to gathering material on Ray Markman’s assertion, “I never worked a day in my life,” before time runs out. This very afternoon, my two colleagues—Loop Lonagan and Alexander Harbinger—will fight a duel over this, and one of them may not live to tell about it.
Lonagan paces the worn oak planks of my office floor in the back room of Ludditis Shots and Beer. “I wanna say somthin’ about dis new business Ray starts. Him and his partners is already makin’ a bundle, so why should he try’n change the way people buy things? But that’s just what he does.
“Ray gets this new idea about retail distribution. So he runs a test. He takes that Jane Fonda tape and puts it into Wal-Mart, K-Mart, Dominicks. He gets into these stores ‘cause he offers the tape on consignment and gives ’em the displays. In other words, he’s takin’ all the risk! So they go along.
“Turns out, Dominicks outsells K-Mart and Wal-Mart by far on a per-store basis. A food store! Who woulda expected that?”
Lonagan steps over to my desk and grabs his notes: “So Ray says this to his partners: ‘Let’s start another company and just go into supermarkets. There’s nobody there. We can pre-empt the competition. Here’s the idea: We go to Disney, Hanna-Barbera, Warner Bros, and get their children’s animations. We price ’em at $9.95. And we put displays in the stores and sell it like soap. We’re gonna blow ‘em out of the stores. We’re appealing to another audience. It’s women and it’s for their children. They’re gonna buy it.’ Now if you know Ray, you gotta know he says all dis in a real soft voice. To me that gives da words even more punch. Hey, I can buy into that idea myself. All his partners is galvanized into makin’ the move right alongsida him!”
Lonagan’s pacing speeds up and in this big back room, he ranges from the crates on one wall to the bottles on the other. Seems like there’s not enough room in my backroom office to hold him. “‘Course, they can’t run both companies—it’s way too much. So they merge the first one into another company and get their money out. Then they start a new company called Magic Video. Don’t know why they call it dat but it seems to catch on just fine.”
He stops in front of my desk. “And how d’ya think they distribute to the food stores? The usual way—by themselves? You can forget that idea. They do it with food brokers. Food brokers! These outfits don’t know video from a slab o’ meat, but they’re in the stores and the stores know ‘em and they got carte blanche to put up displays. Dis is brilliant!”
I nod and he resumes his pacing. It always tickles me when phrases like “carte blanch” slip out of Loop’s mouth. Such a contrast to the streetwise front he puts on. Loop is highly intelligent. Besides his experience as a futures trader in the pits, and the many private equity deals he’s made since then, he sports a masters in finance from the University of Chicago. So I know a lot of his old neighborhood accent is a put on. I’ve learned not to fall into the trap and underestimate him. He’s quick.
Lonagan continues: “The way Ray works it, he goes with his food broker to a major supermarket chain and sells the idea to HQ. After that, the brokers put the product in. They do all the housekeeping, the displays, all the details.
“It works out great. They’re buildin’ a fantastic business. In 2-1/2 years their run rate is 250 million bucks! Tell me that ain’t good business. And Ray knows he can grow it into a billion! But it don’t turn out that way.”
Now he has my full attention. I want to know the rest of the story. What’s Loop waiting for? Pausing for some big effect? “Yeah?” I say, trying to egg him on. “And?”
“His first grandchild gets born. A little girl. Big deal for Ray. He’s traveling 90% o’ the time so he can’t see her. He decides family comes first.
“His partners whine and complain, ‘Ray, you can’t quit, you’re the whole company.’ So he makes an agreement with dem guys. He sticks it out fer six more months while they get a new president settled in. After that, da new guy’s supposed to do the day-to-day business while Ray keeps the relationships going with Disney, Hanna-Barbera and Warner Bros. He says, ‘Okay but if you screw around with the time, I’m gonna be gone.’ He’s not waitin’ around for his granddaughter to grow up without him.
“Of course, six months pass and they ain’t done nothin’. Don’t even hire no new guy. So Ray sells his share o’ the company. He makes out real good but he gives up the chance o’ buildin’ a billion dollar company. Family first! And I say, he’s right!”
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