Alec Gores is one of the country’s most successful businessmen. As his eldest daughter embarks on her first entrepreneurial adventure, the two discuss how the life lessons he imparted along the way will shape the face of our nation’s future…or at least the stylishness of it.
Is business sense inheritable? Is it possible that boardroom know-how is somehow imbedded into DNA and passed down through the generations in the same way that blue eyes or detached earlobes are? When analyzing some of the most successful business families of recent times-the Trumps, the Tischs, the Rockefellers-the theory does seem to hold true. Seemingly unstoppable legacies from these entrepreneurial kinships have dominated the American marketplace throughout the last century, and the youngest incarnations of the dynasties are guaranteeing that the good fortune will continue for decades to come.
While the Los Angeles-based Gores may not have yet fully established their family name on the roster of great American business families, the operative word of that sentence is “yet.” The family’s patriarch, Alec Gores, heads up Gores Group, a private equity firm with interests in 15 companies and $1.7 billion under management. The company is focused on acquiring controlling interests in mature and growing businesses that need help. Alec explains that he was able to effectively teach himself how to buy and sell businesses when he was in his late 20s after he sold his first company. Today, his self-made fortune of $1.5 billion proves him to be one of the best in the field. Meanwhile, his younger brother Tom is also a leader in the industry. As founder, chairman, and CEO of Platinum Equity, a mergers, acquisitions, and operations company, Tom has amassed a self-made fortune of $2.5 billion. Alec stresses that there is nothing but friendly sibling rivalry between the two, who are both listed on Forbes’ list of the wealthiest in the nation and the world. “It’s like having two brothers play for two different football teams. At home you are proud of each other even though you compete. We’re all very supportive, and the business part is like a game.”
Her designer store, Arcade Boutique by Rochelle Gores, opened its doors in September to much fanfare.
Tom admits he learned the corporate buyout industry in his 20s by watching his brother climb his way up in the business world. When Alec was just 25 years old, he began selling computer parts out of his father’s basement in Michigan. His entrepreneurial mind promptly expanded the venture into Executive Business Systems, a company that he grew to include some 200 employees within a matter of years. When EBS was purchased by CONTEL in 1986, Alec took the immense profit and moved to California to be near his brother Sam, currently chairman of Paradigm talent agency (his mother, three sisters, and brother soon followed him west). He began acquiring and operating non-core businesses, which eventually evolved into Gores Technology Group. Today, Gores Group has companies with some 30,000 employees worldwide and $12 billion in annual revenue.
Now, Alec’s eldest daughter Rochelle is ready to follow in the family footsteps. At the young age of 26, she has already assumed the role as founder of her own business. Her designer store, Arcade Boutique by Rochelle Gores, opened its doors in September to much fanfare. While skeptics may harp on her young age and seemingly little professional business experience, they are forgetting all of the years that she was able to absorb the life lessons of her father and uncles, garnering incomparable business knowledge virtually through osmosis as she traveled the globe and attended business meetings throughout her childhood, always keeping an open ear to the business discussion around the family dinner table.
She has already begun to apply those invaluable lessons to her first venture, but she is aware that the learning process will never be complete. “I still travel with my father,” she explains. “I get lessons on a minute-by-minute basis. He is an amazing businessman and he gives advice on everything from how to manage people to finances, to being smart about what I buy, thinking ahead, and especially thinking outside the box.”
It is that trait that Alec is most known for. The prolific businessman has made a career out of taking risks, and for the most part, those risks have paid off immensely. He has always encouraged employees to “think like a start-up,” because he feels that creative thinking often leads to the innovative ideas that are beneficial to his companies.
Since this particular business plan has been so rewarding for Gores Group, he is encouraging his daughter to utilize the same tactic. “I told her that she must take risks,” Alec says from the comfort of his Beverly Hills home while taking a break from the Haute Living cover shoot. “Rochelle must allow employees to mess up because that’s how you evolve. My experience with business has taught me to forgive myself for the mistakes I’ve made. I’ve seen good companies that don’t grow because they don’t take risks. I’ve learned to take calculated risks over the years. I’ve impressed that on people who work for me and also on my kids.”
While Arcade Boutique is in its infancy and there aren’t any mistakes that have rocked the company to its core yet, Rochelle is positive she will know how to deal with it, should the situation arise. “When you make a decision,” she declares, “you don’t turn back and you make it work!”
Which really explains how Arcade Boutique came to fruition. Design was the career path Rochelle decided upon at a very young age. “I’ve always been intrigued by fashion and beauty, and when I was younger, I loved playing dress-up,” she recalls. “When I got older, I used to organize my mom’s closet and put outfits together and tell her how she should dress.” At Western Michigan University (the same school that her father attended), she first began pursuing a degree in business, but at the urging of her mother switched her focus to textile apparel merchandising with a minor in business. She apprenticed in the industry through stints at retail outlets like Rampage and Scoop NYC before returning to her native L.A. to try her hand at operating her own business.
“I wasn’t surprised when I heard she wanted to open a fashion store,” Alec laughs. “It has always been her dream, so I have been happy and supportive, and she’s done a great job. And she’s done it all on her own. Sure, I give her business advice like how to manage people and things of that nature, but I don’t know much about the fashion business. I just give her tips on business principles.”
One of the main ideas that he has tried to instill in his daughter is that no matter whom you are dealing with-employees, vendors, customers, or others-you want them to feel like they are treated fairly, thus creating win-win situations. This ideal is reflected in every one of the dealings of the massive Gores Group. Take, for example, the recent buy-out of Siemens troubled $5.5 billion telecom equipment unit, known as Siemens Enterprise Communications. The Gores Group acquisition of the division is an excellent example of the brand’s core philosophy of bringing value to any business they take over. In fact, Alec says, Siemens “wanted to be my partner because I have a history of adding value to companies. In this case, we are stabilizing the company [which lost more than $1.5 billion over the last two years and cut its staff by 6,800] and finding ways to grow it. We are making employees happy and excited and getting the customers confident.”
This focus on happy employees and happy customers is also evident at Arcade Boutique. Alec stresses, “If you give them value, they will come back.” And Arcade certainly does provide value. The name is representative of 18th century shopping malls, which were called arcades, as Rochelle discovered during her studies of fashion history. Thus, the whole idea of the store is to bring new designers and old classics together in one convenient and incredibly chic locale.
The Melrose Avenue storefront was designed by David Montalba, one of the city’s finest retail architects. When discussing the composition, Rochelle expressed a desire to have something different than the norm. “I wanted it to feel like a home, something totally outside of the box,” inadvertently reflecting her father’s mantra. The result is a space that is reflective of a Parisian arcade, a unique blend of the luxurious and the raw, exemplified by the walnut and hand-brushed brass panels that contrast with the concrete floors. The store’s signature personalized service provides an intimate shopping experience that is unique in the Los Angeles area. Arcade also offers hand-tailoring, home delivery, closet organization, and wardrobe overhauls.
The store is replete with select, hard-to-find designers such as Alexis Mabille, Yigal Azrouel, Kaufman Franco, Veronique Leroy, and Julia Clancey, amidst classics such as Emanuel Ungaro and Vivienne Westwood. Rochelle, who describes her personal style as “sexy and feminine with a sophisticated edge,” hand-selects the designs that are seen in Arcade Boutique. And, of course, since an outfit is only as good as its accessories, Rochelle’s long-time friend, jewelry designer Neil Lane, has created a line exclusively for Arcade Boutique. The celebrity-studded official opening on October 23, which drew in the likes of Joe Pesci, Mischa Barton, Alexis Mabille, and producer Randall Emmett, confirms that the success of the brand is imminent.
While there are no plans as of yet to expand beyond this initial locale, Rochelle will continue to follow her father’s advice, thinking outside the box to create a business that one day may take over the retail fashion world, just as her father’s Gores Group has established itself as a leader of the private equity industry.