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People Top 5
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- October 02, 1995
- Vol. 45
- No. 14
At 23, Michael Rubin Is a Self-Made Millionaire; When He Grows Up, He Wants to Be a Billionaire
Paulette Rubin should have known better than to doubt her son, who, after all, had been making deals since he was 9. He hasn't stopped yet. Now 23, Michael Rubin is running a multimillion-dollar sneaker company and taking aim at giants Nike and Reebok.
The son of Paulette, 54, a psychiatrist, and her husband, Ken, 57, a veterinarian, Rubin says that the first eight years of his life in Lafayette Hill, Pa., a Philadelphia suburb, were pretty normal and that he enjoyed skiing, Little League, football, basketball and wrestling. Then, apparently, entrepreneurial puberty set in. "I started selling vegetable seeds, going round door-to-door to neighbors," he says. "By 10, I had five kids working for me, shoveling snow."
When he was 13, a friend suggested that Rubin, just back from ski camp, open his own ski-tuning shop. The next day, he was open for business in the basement. He received an instant seminar in Economics 101 when the owner of a ski shop in a nearby mall had him banned from handing out flyers in the parking lot.
Despite that setback, Rubin cleared $500 in a month and at 14, he was ready to open a real ski shop—using $2,500 in bar mitzvah gift money. "It was a difficult decision," says his mother, "but we had an understanding—he had to do his best in school."
With his father cosigning the lease for the shop in a strip mall in nearby Conshohocken, Rubin convinced high school authorities to let him join a cooperative education program that allowed some students to split their day between school and work. He was in his element. "I always understood how to run a business," says Rubin. "But you mature in your ability just like an athlete gets better as he plays."
For his parents, the toughest part of having a teen entrepreneur in the family was making sure he had a normal adolescence. "From the time he opened his first ski shop," says Paulette, "he was in the adult world. Then he'd come home and have his mother tell him it was trash night and he had to take it out or be grounded."
Maybe Rubin should have concentrated on his chores. By age 16, he had a big surprise for his parents—he was $120,000 in debt. Although not responsible for his son's debts, Ken Rubin came through with a $37,000 loan, which allowed Michael to work out a repayment deal with creditors, who wound up getting 20 cents on the dollar. "I was overextended and I didn't like retail," he says. "I had the entrepreneurial experience, but I wasn't good with merchandising—I didn't have the expertise to walk into a store and properly lay it out." Yet by age 18, he owned a chain of five ski shops.
His father's loan came with a proviso—Rubin had to go to college. But after six months as a business major at Villanova University, he stumbled onto $200,000 in overstock ski equipment, bought it for $17,000 borrowed from a friend, sold it for $75,000, paid off his father and his friend—and quit college. A new career in wholesaling was beckoning, and he didn't want to wait.
From then on it was just a short step to founding KPR (the name comes from his parents' initials) and selling off his one remaining ski shop. Last year, KPR had sales of $27 million from buying and selling off-price brand-name merchandise, particularly athletic shoes. This year, Rubin projects sales of $50 million and profits of $5 million.
Last month, Rubin—who used to do most of his negotiating on the phone to disguise his youthfulness—made his boldest move: He put together an $8 million financing-and-equity package to acquire 40 percent of Ryka Inc., a Norwood, Mass., women's athletic shoe manufacturer, becoming its largest shareholder as well as chairman and CEO. "Ryka has a good market niche in the Northeast," says Bill DeVries, president and CEO of Wool-worth's Athletic Footwear and Apparel division, which includes the Foot Locker stores. "If Rubin can copy that, he can take the brand truly national. He has a wonderful opportunity."
Next fall, Ryka plans to launch a new, low-cost sneaker that Rubin hopes will be his first small step into the big time with the likes of Nike and Reebok. "If anyone can accomplish this," says his mother, "Michael will." She learned that lesson 13 years ago—on visiting day at Camp Comet.
BOB CALANDRA in Philadelphia
- Bob Calandra.
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