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Thursday, June 3, 2010

OfficeLand and Office Oasis

 In future messages I will separate my remarks by events connected to OfficeLand, Office Oasis, ICDL , Present, Family, or Personal.

Regarding OfficeLand – After taking a FORTRAN programing course in 1987, I investigated the opportunity of selling personal computers from our OfficeLand stores. At the time, there were about 10-12 stores located in the metro Boston area and it became obvious that computers were rapidly replacing typewriters and would be the equipment of the future. At our Newton store, we also were an IBM and Eagle computer dealer. Near my home in Shrewsbury, MA, I became close friends with a neighbor, Yao Tsung Yen. He was a PhD from Carnegie Mellon in Physics and worked on new technology for Digital Computer. In fact, we spent many hours together as he taught me all he could about analog, digital and new HDTV that he was working on. He loved my retail concept for OfficeLand and, with his help, we created a new company called Offcom, Inc. This would be an entirely new computer distribution model that would rival the then popular Leading Edge Computer. OfficeLand funded Offcom and we entered into an agreement to private label new 286 computers manufactured for OfficeLand by Mitac International of Taiwan. Dr. Yen and I visited with State Senator Bill Bulger who had us meet the Mass. Secretary of Commerce who was interested in us setting up larger distribution in Ireland. We did not go that far but we did bring in about 100 computers which we sold from the larger Newton OfficeLand store. The franchises were also encouraged to each purchase one computer at cost. They would either send customers to Newton for pickup or pick the computers up themselves for the customers. This “big ticket” item significantly added sales and profits to the franchise stores and was well received by them especially when we advertised both in the Boston Globe and the Wall Street Journal. We also remodeled the Newton store and were poised for terrific success.
Only within a few weeks the unthinkable happened. On the floor above our store, I was told that a sink was left on over the weekend by someone that caused an overflow of water to seep into both our first floor and basement location of the OfficeLand computer store. This ruined most of our inventory. Our business interruption insurance would not cover the losses and the store was out of commission for good. With the help of the OfficeLand attorney, Ray Ewer, we pursued a lawsuit against the landlord, Peter Turchon. Turchon owned and managed hundreds of apartments in the Brighton and Dorcester areas of Boston. He once bragged about throwing old ladies out on the street in order to collect higher rent. He also showed me a picture of his Dover estate and the 12 expensive sport cars parked in front. He was wealthy and very influential. I hired an expert witnesses and the suit went to trial a year later. After the trial began and I testified, the judge interrupted my testimony ordering both attorneys into his chamber. According to Ewer, the judge refused to accept our expert witness and I was told that the best that could be expected was an agreement that Ewer would be paid by the landlord. I lost a great deal including the most important initiative of selling computers at all our OfficeLand stores. Turchon was elated as I am sure was Tom Stemburg whose headquarters was only a quarter of a mile away. This event forced my departure from Newton and the relocation of OfficeLand to Londonderry, NH.

Back to ICDL and my description of our board. ..
Ray Broderick had me meet Walter Reichert in his Andover home. Reichert almost immediately loaned $50,000 to the start up of Picture Communications and I was grateful. Very shortly thereafter, he introduced me to his barber, Nicklas Scalese, and owner of nearby “Cocos” where almost everyone of influence had their hair cut. Much of my description of Reichert's past actually comes from Scalese. Reichert's father was one of the founders of CR Bard, a large medical device company well known in the Boston area. A graduate of Colgate, Reichert had also done well as a divisional president at Bard and according to Scalese was worth 54 million dollars. A major scandal occurred at CR Bard which, according to the FDA, witnessed CR Bard intentionally allowing faulty heart catheters to be sold on the market resulting in deaths. CR Bard took the position that it was more cost effective to pay off the insurance claims than to stop sales. This resulted in the FDA permanently closing CR Bard and some of Reichert's colleagues going to jail. Nick also described Walter as a person that “ uses cash to lubricate his getting his way” and that he followed his mother's teaching of attacking all his issues as being in a war. His mother was often referred to as the General. To meet him, however, he was polite, cordial, and engaging. It was obvious that Reichert was in control of what needed to be done and he quickly succeeded in placing a key member of the management team to work with me at Picture Communications. This was William Friedburg who became both COO and CFO. However, when I was told by Scalese that Friedburg was seeking the support of board members to replace me, I fired Friedberg. Reichert asked me not to but I did so in any case. It did not take long to find out that I was in a defensive position in a new company that I had founded. Around the same Reichert had what he described as a very important meeting with Jerry Berberian. Jerry Berberian also lived in Andover. If you recall from my earlier postings, Berberian was a key friend and contact of Tom Stemberg. Actually, he was well known in the office products industry as he remained the only Manufacturers Rep after Staples decimated 12,000 smaller office supply stores, 100 manufacturers and changed the entire industry. Berberian had a key role with Stemberg. Berberian's company handled all warranties of products being sold at the Staples stores. Berberian and I never got along while I was running Office Land as I dealt directly with the manufacturer and not the middlemen. A meeting between Berberian and Reichert set the stage for bigger problems for me down the road.
Watch for Nicklas Scalese.