Shoe Dog (18 page)

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Authors: Phil Knight

BOOK: Shoe Dog
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KITAMI LEFT PORTLAND
the next day on his not-so-secret mission, his Give-Blue-Ribbon-the-Brush-Off tour of America. I asked again about his destination, and again he didn't answer.
Yoi tabi de arimas yoh ni
, I said. Safe travels.

I'd recently commissioned Hayes, my old boss from Price Waterhouse, to do some consulting work for Blue Ribbon, and now I huddled with him and tried to decide my next move before Kitami's return. We agreed that the best thing to do was keep the peace, try to convince Kitami not to leave us, not to abandon us. As angry and wounded as I was, I needed to accept that Blue Ribbon would be lost without Onitsuka. I needed, Hayes said, to stick with the devil I knew, and persuade him to stick with the devil
he
knew.

Later that week, when the devil returned, I invited him out to Tigard for one more visit before his flight home. Again I tried to rise above it all. I brought him into the conference room and with Woodell and I on one side of the table, and Kitami and his assistant,
Iwano, on the other, I screwed a big smile onto my face and said that we hoped he'd enjoyed his visit to our country.

He said yet again that he was disappointed in the performance of Blue Ribbon.

This time, however, he said he had a solution.

“Shoot,” I said.

“Sell us your company.”

He said it so very softly. The thought crossed my mind that some of the hardest things ever said in our lifetimes are said softly.

“Excuse me?” I said.

“Onitsuka Co. Ltd. will buy controlling interest in Blue Ribbon, fifty-one percent. It is best deal for your company. And you. You would be wise to accept.”

A takeover.
A hostile freaking takeover.
I looked at the ceiling. You gotta be
kidding
, I thought. Of all the arrogant, underhanded, ungrateful, bullying—

“And if we do not?”

“We will have no choice but to set up superior distributors.”

“Superior. Uh-huh. I see. And what about our written agreement?”

He shrugged. So much for agreements.

I couldn't let my mind go to any of those places it was trying to go. I couldn't tell Kitami what I thought of him, or where to stick his offer, because Hayes was right, I
still
needed him. I had no backup, no plan B, no exit strategy. If I was going to save Blue Ribbon, I needed to do it slowly, on my own schedule, so as not to spook customers and retailers. I needed time, and therefore I needed Onitsuka to keep sending me shoes for as long as possible.

“Well,” I said, fighting to control my voice, “I have a partner, of course. Coach Bowerman. I'll have to discuss your offer with him.”

I was certain Kitami would see through this amateurish stall. But he rose, hitched his pants, and smiled. “Talk it over with Dr. Bowerman. Get back to me.”

I wanted to hit him. Instead I shook his hand. He and Iwano walked out.

In the suddenly Kitami-less conference room, Woodell and I stared into the grain of the conference table and let the stillness settle over us.

I SENT MY
budget and forecast for the coming year to First National, with my standard credit request. I wanted to send a note of apology, begging forgiveness for the Kitami debacle, but I knew White would roll with it. And besides, Wallace hadn't been there. Days after White got my budget and forecast he told me to come on down, he was ready to talk things over.

I wasn't in the hard little chair across from his desk more than two seconds before he delivered the news. “Phil, I'm afraid First National will not be able to do business any longer with Blue Ribbon. We will issue no more letters of credit on your behalf. We will pay off your last remaining shipments as they come in with what remains in your account—but when that last bill is paid, our relationship will be terminated.”

I could see by White's waxy pallor that he was stricken. He'd had no part in this. This was coming from on high. Thus there was no point in arguing. I spread my arms. “What do I do, Harry?”

“Find another bank.”

“And if I can't? I'm out of business, right?”

He looked down at his papers, stacked them, fastened them with a paper clip. He told me that the question of Blue Ribbon had deeply divided the bank officers. Some were for us, some were against. Ultimately it was Wallace who'd cast the deciding vote. “I'm sick about this,” White said. “So sick that I'm taking a sick day.”

I didn't have that option. I staggered out of First National and drove straight to U.S. Bank. I pleaded with them to take me in.

Sorry, they said.

They had no desire to buy First National's secondhand problems.

THREE WEEKS PASSED.
The company, my company, born from nothing, and now finishing 1971 with sales of $1.3 million, was on life support. I talked with Hayes. I talked with my father. I talked with every other accountant I knew, one of whom mentioned that Bank of California had a charter allowing it to do business in three western states, including Oregon. Plus, Bank of Cal had a branch in Portland. I hurried over and, indeed, they welcomed me, gave me shelter from the storm. And a small line of credit.

Still, it was only a short-term solution. They were a bank, after all, and banks were, by definition, risk-averse. Regardless of my sales, Bank of California would soon view my zero cash balances with alarm. I needed to start preparing for that rainy day.

My thoughts kept returning to that Japanese trading company. Nissho. Late at night I'd think, “They have $100 billion in sales . . . and they want desperately to help
me
. Why?”

For starters, Nissho did huge volumes on low net margins, and therefore it loved growth companies with big upsides. That was us. In spades. In the eyes of Wallace and First National we'd been a land mine; to Nissho we were a potential gold mine.

So I went back. I met with the man sent from Japan to run the new General Commodities Department, Tom Sumeragi. A graduate of Tokyo University, the Harvard of Japan, Sumeragi looked strikingly like the great film actor Toshiro Mifune, who was famous for his portrayal of Miyamoto Musashi, the epic samurai duelist and author of a timeless manual on combat and inner strength,
The Book of Five Rings
. Sumeragi looked most like the actor when lipping a Lucky Strike. And he lipped them a lot. Twice as much when he drank. Unlike Hayes, however, who drank because he liked the
way booze made him feel, Sumeragi drank because he was lonely in America. Almost every evening after work he'd head to the Blue House, a Japanese bar-restaurant, and talk in his native tongue with the ­
mama-san
, which just made him lonelier.

He told me that Nissho was willing to take a second position to the bank on their loans. That would certainly quell my bankers. He also offered this nugget of information: Nissho had recently dispatched a delegation to Kobe, to investigate financing shoes for us, and to convince Onitsuka to let such a deal go through. But Onitsuka had thrown the Nissho delegation out on their asses. A $25 million company throwing out a $100 billion company? Nissho was embarrassed, and angry. “We can introduce you to many quality sports shoe manufacturers in Japan,” Sumeragi said, smiling.

I pondered. I still held out some hope that Onitsuka would come to its senses. And I worried about a paragraph in our written agreement that forbade me from importing other brands of track-and-field shoes. “Maybe down the road,” I said.

Sumeragi nodded. All in good time.

REELING FROM ALL
this drama, I was deeply tired when I returned home each night. But I'd always get a second wind after my six-mile run, followed by a hot shower and a quick dinner, alone. (Penny and Matthew ate around four.) I'd always try to find time to tell Matthew a bedtime story, and I'd always try to find a bedtime story that would be educational. I invented a character called Matt History, who looked and acted a lot like Matthew Knight, and I inserted him into the center of every yarn. Matt History was there at Valley Forge with George Washington. Matt History was there in Massachusetts with John Adams. Matt History was there when Paul Revere rode through the dark of night on a borrowed horse, warning John Hancock that the British were coming.
Hard on Revere's heels was a precocious young horseman from the suburbs of Portland, Oregon . . .

Matthew would always laugh, delighted to find himself caught up in these adventures. He'd sit up straighter in bed. He'd beg for more, more.

When Matthew was asleep, Penny and I would talk about the day. She'd often ask what we were going to do if it all went south. I'd say, “I can always fall back on accounting.” I did not sound sincere, because I wasn't. I was not delighted to be caught up in these adventures.

Eventually Penny would look away, watch
TV
, resume her needlepoint, or read, and I'd retreat to my recliner, where I'd administer the nightly self-catechism.

What do you know?

I know Onitsuka can't be trusted.

What else do you know?

I know my relationship with Kitami can't be salvaged.

What does the future hold?

One way or another, Blue Ribbon and Onitsuka are going to break up. I just need to stay together as long as possible while I develop other supply sources, so I can manage the breakup.

What's Step One?

I need to scare off all the other distributors Onitsuka has lined up to replace me. Blast them right out of the water, by firing off letters threatening to sue if they breach my contract.

What's Step Two?

Find my own replacement for Onitsuka.

I flashed on a factory I'd heard about, in Guadalajara, the one where Adidas had manufactured shoes during the 1968 Olympics, allegedly to skirt Mexican tariffs. The shoes were good, as I recalled. So I set up a meeting with the factory managers.

EVEN THOUGH IT
was in central Mexico, the factory was called Canada. Right away I asked the managers why. They chose the name, they said, because it sounded foreign, exotic. I laughed. Canada?
Exotic? It was more comic than exotic, not to mention confusing. A factory south of the border named for a country north of the border.

Oh well. I didn't care. After looking the place over, after taking inventory of their present line of shoes, after surveying their leather room, I was impressed. The factory was big, clean, well run. Plus, it was Adidas-endorsed. I told them I'd like to place an order. Three thousand pairs of leather soccer shoes, which I planned to sell as football shoes. The factory owners asked me about the name of my brand. I told them I'd have to get back to them on that.

They handed me the contract. I looked at the dotted line above my name. Pen in hand, I paused. The question was now officially on the table. Was this a violation of my deal with Onitsuka?

Technically, no. My deal said I could import only Onitsuka track and field shoes, no others; it said nothing about importing someone else's
football
shoes. So I knew this contract with Canada wouldn't violate the letter of my Onitsuka deal. But the spirit?

Six months previously I would never have done this. Things were different now. Onitsuka had already broken the spirit of our deal, and my spirit, so I pulled the cap off my pen and signed the contract. I signed the heck out of that Canada contract. Then I went out for Mexican food.

Now about that logo. My new soccer-qua-football shoe would need something to set it apart from the stripes of Adidas and Onitsuka. I recalled that young artist I'd met at Portland State. What was her name? Oh, yes, Carolyn Davidson. She'd been in the office a number of times, doing brochures and ad slicks. When I got back to Oregon I invited her to the office again and told her we needed a logo. “What kind?” she asked. “I don't know,” I said. “That gives me a lot to go on,” she said. “Something that evokes a sense of motion,” I said. “Motion,” she said, dubious.

She looked confused. Of course she did, I was babbling. I wasn't sure exactly what I wanted. I wasn't an artist. I showed her the soccer-­football shoe and said, unhelpfully: This. We need something for this.

She said she'd give it a try.

Motion, she mumbled, leaving my office. Motion.

Two weeks later she came back with a portfolio of rough sketches. They were all variations on a single theme, and the theme seemed to be . . . fat lightning bolts? Chubby check marks? Morbidly obese squiggles? Her designs did evoke motion, of a kind, but also motion sickness. None spoke to me. I singled out a few that held out some promise and asked her to work with those.

Days later—or was it weeks?—Carolyn returned and spread a second series of sketches across the conference table. She also hung a few on the wall. She'd done several dozen more variations on the original theme, but with a freer hand. These were better. Closer.

Woodell and I and a few others looked them over. I remember Johnson being there, too, though why he'd come out from Wellesley, I can't recall. Gradually we inched toward a consensus. We liked . . .
this one . . .
slightly more than the others.

It looks like a wing, one of us said.

It looks like a whoosh of air, another said.

It looks like something a runner might leave in his or her wake.

We all agreed it looked new, fresh, and yet somehow—ancient. Timeless.

For her many hours of work, we gave Carolyn our deepest thanks and a check for thirty-five dollars, then sent her on her way.

After she left we continued to sit and stare at this one logo, which we'd sort of selected, and sort of settled on by default. “Something eye-catching about it,” Johnson said. Woodell agreed. I frowned, scratched my cheek. “You guys like it more than I do,” I said. “But we're out of time. It'll have to do.”

“You don't like it?” Woodell said.

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