In the almost three years since Rampage emerged from Chapter 11, the Rampage chief executive has built a leaner, more efficient organization and has slowly begun to build back volume. He also now recognizes that the marketplace environment has changed, what with the increased emphasis on global sourcing and the difficult economy.
“A big overhead is deadly these days,” said Hansel, guiding visitors on a tour through Rampage’s 69,000-square-foot headquarters here. “People think top-line growth is their savior, but if you can’t generate cash as you grow [top line], you have no business expanding.”
Hansel, a 20-year industry veteran, said he has seen many big-box, multidivision competitors felled like giant redwoods over the last decade because of that strategy.
Positioned to increase company revenues by 65 percent this year to $130 million, based on orders to date, Hansel believes only ultralean domestic organizations will survive a quota-free China and the overall globalization of trade.
Accordingly, Rampage’s headquarters is a tightly spooled hub of activity: a woman snips and bundles trim in the reception area, dye solutions crowd a counter in the ladies’ bathroom and Hansel’s own office is quite modest.
It’s a sharp departure from the early Nineties, when Rampage’s headquarters were so mammoth Hansel was able to drive his Mercedes Benz through the factory. He alternately describes the 240,000-square-foot former headquarters as “a city block” and “a mausoleum.”
Rob Smith, vice president and divisional merchandise manager for Macy’s West, who has worked with Hansel for 15 years, said: “It’s nice to see someone come out of a tough time and do so well.”
Hansel has “certainly become a lot smarter and learned from mistakes made in the past,” Smith observed, referring to the bankruptcy. “He’s right on with the fashions, priced correctly and they’ve really learned how to develop a base with key items.”
Smith credited Hansel as being the first to “own the sweater-coat business” by producing and shipping in substantial quantities.
Five department stores — Dayton Hudson, Dillard’s, Federated Department Stores, May Co. and Nordstrom — account for 80 percent of Rampage’s distribution. The balance is with specialty chains like Windsor and the namesake Rampage chain, a division of Charlotte Russe Holding Inc. Business at the branded stores accounts for 4 percent of Rampage’s wholesale volume.
There is also a two month-old business in Canada, which Hansel said could do $5 million this year. But Hansel wouldn’t project how big he’d like the company to get.
“In the old days, we pushed too hard,” he noted. “I’d like to see the brand find its level naturally.”
But if the company stays on its current track, it’s a candidate to reach revenue levels close to $200 million in the next few years, which would bring it back to its peak volume achieved in 1996, a year before the company filed for bankruptcy protection and sold off its retail arm.
Hansel said he has paid off all of the $40 million owed to secured creditors and $3 million of $20 million due to unsecured creditors.
Wherever the brand goes next, Hansel is prepared to travel much lighter. There were 700 employees at the old Rampage compared to 210 today. That means no more cutting staff, no in-house computer techies, one person in marketing and significantly fewer patternmakers and sample sewers.
Hansel’s favorite equipment is a telephone, an overseas plane ticket and a CAD design system attached to a server.
“We’re on a major drive to memorialize things we know work, so we can go back and use them,” he said. “It’s very expensive to make a pattern.”
Hansel said sourcing drives the business, with 30 percent of goods made domestically and the bulk in Mexico, the Far East, India and Central America.
“We don’t spend our time looking at piece goods anymore,” he said. “Fabric doesn’t drive the business. Today, we think about what products we want to be in and where we’re going to make them.”
He sees growth opportunities in denim, currently at 10 percent of the business, and in misses’ sportswear, a segment he plans to address with a launch for spring 2003.
“It’s our same Rampage customer,” he said. “The fit and bodies will be different, but the head is still the same. She wants to be sexy at 40.”
Though he’s enthusiastic about expanding the business, Hansel still seems mostly like a guy knocking on wood. Is he ever tempted to walk away?
“Always — that’s the first, second and third thought in my mind: Can I do it anymore?” he asked rhetorically. “It’s a tough business. There’s no smooth sailing even in the best of times. I know how one complication after another can kick up and all of a sudden you’re out in the ocean without a boat.”