By Warren Shoulberg
They can trace their industry family tree back to the origins of the post-World War II home textiles business but their legacy touches on some of the very foundations of the modern era, including product coordination and dedicated retail real estate.
Three different—very different—generations of the family ran the business, a rare enough treat indeed and each left its own distinctive mark on it.
And now that the family has left the family business, their rightful place in the home textiles can only now just start to be assessed, evaluated and ultimately respected.
They were the first family of Fifth Avenue.
They are the Kahns.
Mike, Stanley, David and Doug Kahn and the company they oversaw for more than five decades, Croscill Home Fashions, are in some ways typical of American business in general and the home textiles industry specifically. A family starts modestly enough, begins to build a place in the industry and then dramatically explodes, catching the right wave at the right time.
And then due to circumstances both internal and external, it comes back down to earth and the family decides it is time to make a change.
For the Kahns, that change occurred only four months ago when it sold Croscill to private investors and the family walked away from it all.
“We tried to do the right thing, but it started to get unacceptable to us,” Doug Kahn told HFN as he and his father, Mike, sat down and talked about the family and its role at Croscill.
Croscill had struggled over the past few years as the market changed, key customers went out of business and there was a general downgrading of quality throughout the industry. Doug said they knew what had to be done to fix the company, “but it would have been difficult for us to do,” given the patriarchal nature of Croscill.
“Patriarch,” ironically enough the investment firm that bought Croscill this past November, “will do the things that were hard for us, but are the things going on all over the industry,” Doug said.
It’s a long way from the day in the early 1940s when Mike Kahn reported for his first day of work at a small kitchen curtain supplier owned by his father and uncle.
“I went to the University of Cincinnati, which was a co-op school where you went to classes for one year and then went to work. I needed a job.”
Mike Kahn’s first assignment at Croscill Curtain—and yes, the urban legend that the Croscill name derives from an original slogan that its curtains “crossed the sill” is true—was designing the showroom, a task that he continued to perform throughout his entire career.
When he was moved into sales, it was with some hesitancy on the part of the older generation. “They gave me Massachusetts, but not Boston. They gave me upstate New York, but not Buffalo.”
Mike Kahn eventually became the outside face of the company while his brother Stanley worked in the backroom costing out product. Together they built Croscill into a major window fashion supplier and also set the tone for the next generation of leadership: Mike’s sons, first David and then Doug.
“I don’t remember any negatives working with Stanley,” Mike recalls, remembering his brother as ruthless when it came to costing and jokingly admitting that his brother often provided inflated numbers so as to make the line more profitable.
“But it wasn’t difficult to turn the company over” to the next generation, Mike said. “Stanley and I were futzing around but we needed new talent. It was all new thinking.”
When David joined Croscill in the mid-1980s he immediately brought in that new thinking—and lots of it. Seeing the integration of bedding with other coordinates, he built Croscill’s bedding business up dramatically, then moved into bath and eventually licensed out the name for other coordinates like rugs, table linens and white goods.
David also saw that controlling retail real estate would be a key element of success and he rolled out hundreds of Croscill shops in department stores around the country.
The $60 to $70 million curtain-centric company he took over eventually became a $310 million powerhouse, the leading premium resource for better home textiles products.
His older brother Doug, with a successful career on Wall Street, said he would get jealous at family gatherings.
“I used to watch Dad and David at family events and see how passionate they were about the business. When the opportunity came to join my father—my mentor and my role model—I couldn’t pass it up.
“I think David saw the same thing, he just realized it earlier.”
The unexpected part for Doug when he joined Croscill in 1993 was working with his brother. “The added bonus for me was to see how brilliant David was. It was my little brother, I always knew he was good at Fuller Brush.”
David and Doug assumed clear-cut roles—David the outside sales and design face, Doug the inside man running operations in North Carolina.
“David and I laughed hard together,” Doug recalls, but it was assigning those specific roles that made the whole thing work. “It was a huge positive, Sometimes family relationships can get in the way, but we always respected each other’s roles.”
Doug credits his dad for that structure. “This was a brilliant businessman. We took dad’s advice for a family company: no wives allowed.”
The Croscill success story probably peaked in 2001 when the company hit its $310 million sales high. Competitors came along that undercut Croscill’s premium pricing at the very same time retailers were getting more promotional. Key accounts like May Co. went away while others started to slow their growth dramatically. Croscill was quickly trying to shift its production overseas and find a way to be competitive at more promotional price points, but it was a difficult process for a company which had made its mark by doing things a certain way for a very long time.
Both David and Doug struggled with the transition, but for David, who was believed to be bi-polar, it was very much personal.
“He had so many other pressures on him and he was really struggling with the new landscape of the business,” Doug remembers. “None of us knew he was bi-polar and it was becoming overwhelming to him.”
David took his own life in the fall of 2005 and Doug took over the leadership of Croscill. No one involved with the company inside or out will tell you that without David it wasn’t a different company.
Croscill could not adapt to the changing dynamics of the marketplace fast enough and its problems were compounded as key customers such as Linens ’n Things and Fortunoff got into financial trouble.
Last year the family quietly put the company up for sale, knowing it was time to move on. Asked if it would have been different if David had lived, Doug answers, “No, I don’t think so. Would things have been better? Sure, but it would have been the same outcome. I wished he had been here to suffer through all of this with me,” he joked.
Doug hasn’t decided his future plans, but he said, “I’ve already had two careers and I plan on having another two or three more.”
Stanley has officially retired and splits his time between homes in New York and Lenox, Mass.
And Mike and his wife Joan also maintain two residences, in New York and in Paris.
Ever the uplifting soul he’s been, even through tragedy, Mike Kahn puts a happy ending on it all. “I’m so proud of everything that’s happened. It’s just marvelous.
“I hope that the people who bought the company do well with it.”