Rags to riches to rags to riches

Remember Sasson jeans? Remember the "Oo-la-la Sasson'' jingle? Paul Guez went through a kind of rags to riches story as head of the high-fashion denim label, only to become addicted to cocaine and out of business. But in the August issue of Bloomberg Markets, Seth Lubove finds Guez clean and sober and back in the denim game. His new company, L.A.-based Blue Holdings Inc., controls or owns stakes in a network of premium jeans brands, retail stores and manufacturing plants. Guez's stake in Blue Holdings is worth around $90 million (though the stock has been taking a beating). Guez can thank Jerome Schottenstein, patriarch of the Columbus, Ohio retail clan, for turning his life around.

"I was broke, basically, and he says, 'Paul, I would like you to participate in a charity. You have to pay $100,000,''' Guez says. The charity was to pay for a new English translation of the Talmud, the sacred Jewish text. "I'm sure he knew I was broke,'' Guez says of Schottenstein. "Then he sent a rabbi to make me sign a contract for $100,000. My wife exploded laughing, 'Like from where?' I didn't know from where, but I did it.'' The "where'' turned out to be the Schottensteins themselves. Soon after Guez agreed to make the donation, Jerome Schottenstein gave him an order for 12,000 pairs of jeans for Schottenstein's Warrendale, Pennsylvania-based American Eagle Outfitters Inc. -- enough to cover Guez's donation. That was followed by an order for 650,000 pairs. To finance the product, Schottenstein lent Guez $500,000...After Schottenstein's death in 1992, his son Jay sold Guez 1 million shares of American Eagle for $12 a share when the stock was trading at $16, even arranging a line of credit to finance the $12 million purchase price. The stock soared to more than $70 by 1999, making a now sober Guez wealthy again.

By the way, this is Lubove's first piece for Bloomberg's magazine since moving over from Forbes last spring. He is L.A. bureau chief.