BUSINESS Heir Apparel

A Haggar goes out on a limb when he branches out from the family business.

MICHAEL CAOLO IS LAUGHING AS HE

recounts a story about his close friend Eddie Haggar Jr. A licensed pilot, Haggar is bringing his plane into a rural Oklahoma airport, Caolo says, when something goes wrong. “We’re coming in for a landing on this little blacktop runway, and wind shears or something hit us and knock us off the runway toward a barbed wire fence. Scared the absolute hell out of me, but Eddie, after calmly landing the plane, only giggles and says ’oops.’ “

It’s a telling anecdote about a man at once confident in his own ability and titillated by an element of risk. Caolo also was along fur the ride, this time as Eddie’s attorney, when Haggar embarked on his most daring business adventure to date: in April, he bought the women’s wear division of Haggar Apparel in a leveraged buyout. After twenty years’ apprenticeship in the family business, Haggar was anxious to fly on his own.

Last year, Haggar Apparel had the nation’s number one market share in three of the four categories of men’s apparel-suits, dress slacks, and sports coats-but Eddie Haggar believed it could do more. “This is an idea business based on constant experimentation,” says Haggar, forty-three, who early on thought the company should diversify its product line. He advocated the production of sports coats and pushed the company into creating the women’s wear line. But he had felt frustrated that the family business moved slower than he wanted to move.

“Eddie had to fight for the changes that were made,” says Caolo, “but the company remained conservative. They passed up a casual cotton slack, and now Levi’s is eating their lunch with Dockers.”

The women’s wear division of Haggar, which Eddie presided over for five years prior to the LBO, was not a high priority within the company, even though it had 1989 sales in excess of $45 million. It was as if the company was unwilling to re-create its management structure to reflect the market-driven dynamism that is required in women’s wear. So Eddie made his bid for ownership.

Though terms of the LBO weren’t disclosed, most observers believe Eddie made a good deal-and that the move will prove a good one for him. “I think the Haggar name is very important,” says Bob Wildrick, senior vice president of Belk Store Services for Belk & Leggett, a large Southeastern department store chain. “People will speak to Eddie because he’s a Haggar, and because they have a great reputation.”

Big Ed Haggar is cautiously optimistic about his son’s venture. “I have a lot of admiration for him wanting to do it, but women’s wear is a different business, with more wheeling and dealing. He should have less problem with pay scale and benefits… but his neck is still stuck pretty far out there,” says Big Ed.

Ironically, it is the larger, parent company with its reputation for stability whose future may be more in question than the upstart spinoff. Big Ed is seventy-three, and Joe at sixty-five has already announced retirement plans for next year. They have to be thinking about successors, and for the first time the company is conducting executive searches for CEO prospects outside the family. The sixty-four-year-old company has already survived decades beyond the twenty-four-year average for family-owned businesses. Whether the $300 million parent company remains privately owned and operated through the Nineties remains an unanswered question, even for Big Ed. “Hopefully, we’ll keep this business through another generation,” he says, “but you never know.”

“FAMILY BUSINESSES ARE DIFFICULT AT BEST,” says Ann Haggar, Eddie’s wife of nineteen years. “I can’t imagine why people keep trying to do it. Careers are difficult enough without dragging emotional baggage to the office, and with [so many] Haggars running around, it’s way too complicated.”

At the start, it was simpler. Eddie’s grandfather, J.M. Haggar Sr., immigrated from Lebanon to Mexico and mastered the art of selling. “He started as a traveling salesman, a teenager who grew up in the school of hard knocks, and decided he could make a better product than he was selling,” says J.M.’s former sales manager, Greg Baloyan.

In 1926 J.M. opened shop in Dallas, using the assembly line production techniques of Henry Ford to make affordable machine-made pants. The company prospered and became highly regarded in the apparel business. His son Joe became the nuts and bolts operations guy, and later a Dallas city councilman, while Big Ed, Joe’s older brother, provided the charm and marketing savvy. Big Ed is also given credit, along with Dallas adman Morris Hite, for coining the term “slacks”-a garment designed to be worn during “slack time.”

“J.M. was a legend in this business,” says Baloyan, “and a dear, great man. But working for him was a daily challenge.” Indeed, the old man ruled until his death just a few years ago, well into his eighties.

Now, young Eddie is building his own company with seventy-five employees and a motivated management team unburdened by high overhead. Eddie the businessman is looking forward to steady, comfortable growth. But Eddie the risk-taker will savor the challenge. This is the man who his wife says seems conservative, but who would “really like to be a singer in a rock ’n’ roll band,” the man enamored of fast cars, black diamond skiing, and who once jumped on a friend’s very fast Italian motorcycle and “started doing wheelies down the street.”

Eddie Haggar Jr. knows the steady growth of his business venture should make it finan cially worthwhile, but it is the element of risk, of just maybe careening off the runway and toward the barbed wire, that will make it exciting.

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