- 16 -
death, the public at large was generally unaware of who Paul
Mitchell was or that he had died.
Following Mr. Mitchell's death, the hair care industry widely
perceived that JPMS had lost its creative and artistic leader.
Rumors about JPMS becoming a mass marketer resurfaced, and there
was uncertainty whether JPMS would become just another company.
Distributors (both exclusively JPMS and multiline) feared that the
loss of Paul Mitchell's creative force would at least slow product
sales. However, they did not consider dropping the JPMS product
line, primarily because of its profitability.
G. JPMS' Operations and Management
As of April 21, 1989, JPMS had some 50 employees,
approximately 21 of whom worked in a 90,000-square-foot warehouse
space, with an additional 10,000 square feet of office space, in
Santa Clarita, California, owned by Mr. DeJoria and the Trust as
tenants in common and leased by JPMS. As of April 21, 1989, the
warehouse space was not in compliance with the local fire code and
had no environmental controls for drainage of waste or runoff water
in the event of fire or disposal of poor-quality product. (Some
materials used to make hair care products are categorized as
hazardous waste.)
JPMS had no useful inventory controls. By April 21, 1989, the
warehouse was in disarray, and there was a several-months' supply
of products stacked up in JPMS' parking lot. In fact, JPMS tracked
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011