Rock & Republic founder Michael Ball had an instinct for glitz and hype. He made sure that Hollywood starlets showed off his fashion jeans. He put on music-thumping, champagne-flowing parties where beautiful models clung to his arms. He even planned to splash the Rock & Republic name on an airline one day.
But Ball’s ambitions to turn his premium denim brand into a global fashion house like Versace crashed last year when Rock & Republic filed for bankruptcy protection only eight years after its launch. Now, in what might be the ultimate rebuke, his line appears headed to such mass marketers as JC Penney.
The story of Ball’s denouement is not particularly surprising to some of those who worked with him or near him.
“This is a company that didn’t have a financial structure,” said Ilse Metchek, executive director of California Fashion Association, “and when push comes to shove, didn’t have a fashion statement. And those two things are really the things that did them in.”
Maybe some other factors, too – some fashion industry analysts say he spread himself too thin too soon by opening his own shops and branching out to nondenim apparel, shoes, handbags, eyewear and cosmetics. Also, colleagues say he had a hot temper.
It’s been a steep dive for Rock & Republic, which not long ago had a following among such celebrities as Lindsay Lohan, Paris Hilton and Ryan Seacrest. The Culver City-based company filed for bankruptcy protection in April, and now its intellectual property is being acquired for a reported $57 million by apparel conglomerate VF Corp., which owns local premium denim company Seven for All Mankind.
Analysts said the deal, which has to be approved by a bankruptcy judge, is likely to result in Rock & Republic’s jeans hitting the shelves of a mass retailer such as Penney’s or Kohl’s – far from the racks of luxury retailers such as Neiman Marcus and Bergdorf Goodman that currently sell the brand.
Meanwhile, Ball and his company are preparing for trial in bankruptcy court in two cases over lease disputes for property on Rodeo Drive and in the SoHo neighborhood of New York. And Ball’s troubles haven’t been limited to bankruptcy proceedings.
Secret video
An avid cyclist, Ball started professional bike team Rock Racing in 2007. The federal government is investigating Ball as part of a probe into doping in professional cycling, and the New York Daily News reported that former pro cyclist Floyd Landis secretly recorded video in the spring allegedly showing human growth hormones and other doping products in the refrigerator of Ball’s Marina del Rey apartment.
Ball did not return repeated requests for comment for this article nor did his attorney.
The Business Journal reconstructed the rise and fall of Ball and his Rock & Republic empire by examining bankruptcy filings and interviewing people who had worked with him at the company, including former employees and business associates.
In his younger days, Ball got into fights and even did some brief stints in jail. Eventually, he did some acting and some track cycling, and then launched Rock & Republic.
That happened in 2002, when he was designing a pair of jeans for a girlfriend. The project led to a partnership with Andrea Bernholtz, an actress he knew. She became his partner in the company.
At the time, Los Angeles was becoming the hub of premium denim with startups such as Seven for All Mankind, True Religion and Hudson Jeans setting a trend for ready-to-wear jeans with high prices that made as a much of a statement as the fashion.
Rock & Republic grew quickly thanks to Ball’s savvy marketing.
“He started the business with very little money, like tens of thousands of dollars,” said Steven Goldman, a consultant who worked as the company’s chief operating officer from the end of 2006 through 2008. “What he did in five years was amazing. I’ve had many clients and I’ve never seen anyone drive a brand the way he did.”
The jeans became a must-have for celebrities. One of Rock & Republic’s first fashion shows in 2003 featured the daughters of Hollywood icons David Cassidy and Rod Stewart modeling the tight-fitting jeans and denim miniskirts. The company collaborated with Victoria Beckham in 2004 on a limited-edition line of signature jeans. Meanwhile, Ball became known as the bad-boy denim designer who embodied the company’s rock image.
“He was the Rock & Republic dude who is looking to have sexy girls and drive a cool car,” said Claudine Gumbel, a public relations executive who helped launch the company.
Gumbel and her company, New York agency Think PR, ended their relationship with Rock & Republic over money issues. Gumbel said Ball wanted her firm to devote more time to Rock & Republic without paying more than its $2,500 monthly retainer fee, which some PR analysts said is a small amount in industry terms. Ball didn’t take the breakup well.
“He was very angry and he said a lot of terrible things, like we were never going to get a client as big as them,” Gumbel said.
Lavish bashes
Meanwhile, Rock & Republic expanded its product lineup in 2006 to include sky-high stilettos and black velvet loafers, leather handbags and brightly colored sunglasses.
Ball kept Rock & Republic in the spotlight with lavish bashes, including a three-day party to celebrate the company’s five-year anniversary in 2007. The event included a Santa Monica beach party attended by a crowd of celebrities and even a flyover by a helicopter decorated with the company’s winged skull logo.
The peak of his excess was a City of Hope event honoring Ball with its Spirit of Life Award. Ball transformed the ballroom of the Beverly Wilshire hotel into a modern winter wonderland. White curtains draped the walls and covered the glittering chandeliers, while R&B singer John Legend performed on a white baby grand piano.
Ball didn’t go over the top only for parties, however. After launching Rock Racing in 2007, he shook up the conservative sport. He recruited a team of heavily tattooed riders, some of whom had been previously suspended from racing because of doping violations, and arrived at the starting line with a bevy of models decked out in Rock Racing gear.
“He came with his flamboyant, bad-boy image and attitude,” said Neal Rogers, a managing editor at professional cycling publication VeloNews. Rogers said he and Ball had a falling out in 2008 when Rogers’ coverage of the Rock Racing team raised questions about drug-testing issues. The team is defunct.
Meanwhile, Ball continued to expand Rock & Republic’s reach. The company launched a line of pricey cosmetics in 2008 and then began opening its own boutiques, with an L.A. flagship store on Robertson Boulevard, a high-profile opening at the Wynn Hotel in Las Vegas, along with outlet stores in Camarillo and Cabazon.
In hindsight, some say he was losing focus.
“When you are growing, you have to use a lot of your profits and reinvest them back into the business, and he was investing a lot back into the business,” said Fredrick Schmitt, managing director at West L.A. investment banking firm Sage LLC who specializes in the apparel and retail industries. “In some respects it was admirable because he believed in himself and the brand. But perhaps he just did not invest in the right place or at the right time.”
Unpaid loan
A cash crisis came last year, even though the company had reported revenue of $97.6 million for 2009, and pretax profit of $9.79 million.
Rock & Republic stated in its bankruptcy filings that it couldn’t pay a $15 million loan. The loan was originally due May 1, 2009, but the lender extended the deadline to April 2, 2010. The company couldn’t pay then, either, and the lender wouldn’t agree to another extension. Rock & Republic filed for Chapter 11 to protect its intellectual property, which was collateral for the loan.
Making $100 million a year in sales might sound good, but Ball had been quoted in 2007 as saying that he projected the company’s sales to hit nearly $400 million by the end of that year.
At the time of the filing, the company hired a consulting firm, an investment banking firm and a restructuring executive, all with the goal of getting out of bankruptcy quickly. But in the search for a strategic partner or financial backer, Ball’s strong personality was reportedly viewed as a deal-breaker.
VF Corp. eventually inked a deal with Ball to acquire Rock & Republic’s trademarks and intellectual property, not its business operations or retail stores. Knowledgeable sources say those are in the process of shutting down.
A spokesman for VF Corp. declined to comment, citing the pending deal.
Indeed, Ball’s dream of turning Rock & Republic into a brand that would one day have boutique hotels and eventually an airline has all but faded away.
“Rock & Republic was by virtue of being in the right product at the right time with a very powerful marketing message and imagery,” Metchek said. “But it’s an object lesson: That’s not enough.”
