Originally created 03/09/99

Peterman says he's been ousted by company's buyers

LEXINGTON, Ky. -- In a little more than 24 hours, John Peterman says he went from about-to-be-unemployed to employed to fired.

Peterman said Sunday that he had been ousted from J. Peterman, the catalog retailer that he founded in 1987, within a day of the company's rescue from bankruptcy liquidation by last-second buyer Paul Harris Stores Inc.

But Paul Harris chairwoman and chief executive Charlotte G. Fischer said today that she has not decided whether to keep Peterman.

"We are just beginning to evaluate employees of J. Peterman, including Mr. Peterman," Fischer said at a news conference in Indianapolis.

It's been a tumultuous week for Peterman. It began with J. Peterman headed for near-certain liquidation and climaxed Friday with Paul Harris giving new life to the upscale retailer of nostalgic clothing and accessories by purchasing the company for $10 million.

"This whole thing has been such a roller coaster that, actually, this didn't surprise me," John Peterman said of his ouster in a telephone interview Sunday. "We thought we had a miracle at the end, but I guess there are no miracles."

Peterman said Paul Harris chief financial officer Thomas McCain told him during a phone conversation Saturday that the 300-store chain, which sells casual clothing for women, would need two to three months to decide whether it wanted Peterman to remain.

"I said, `I'm surprised. That's not what you said yesterday in doing the deal,"' Peterman recounted. "He said maybe there was a misunderstanding."

Peterman said he later was told that he is not considered part of the new company's "go-forward scheme."

Peterman, a 57-year-old former marketing executive and minor league baseball player, started his company in 1987 by selling cowboy-style canvas duster coats in the back pages of The New Yorker and The Wall Street Journal. The company's influential catalog features poetic descriptions of the items for sale and artistic drawings of the merchandise, but it became most famous for being satirized on the television series "Seinfeld."

J. Peterman filed for protection from its creditors in federal bankruptcy court in January, saying a slowdown in catalog sales and delays in a planned 70-store retail expansion had caused a cash crunch.

Peterman blamed the main backer of the retail expansion, Chicago-based Heller Financial, which he said got cold feet and tightened the company's credit, forcing it to seek protection under Chapter 11 of the U.S. Bankruptcy Code.

When Peterman was unable to find a buyer to keep the company going, U.S. Bankruptcy Judge William S. Howard ordered Friday's liquidation auction. There, Paul Harris came forward with its late offer to buy the company and keep it in business.

Peterman said he will stick with his plan from last week, when he thought J. Peterman was going to be liquidated.

"I'm going to write the book and I'm going to start another business," he said.


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