But we have so much in common here from the lawsuits, molestations, raging billionaires, sexual harassment, Prince Andrew and temper tantrums. Good to know our friends to the north have equally disturbing fuckwits with more money than sense. Well they have some sense they haven't run for Prime Minister......yet.
Peter Nygard Answers to No One
Forbes Nov 18, 2010,
Tacoma, Wash. resident Paulette Robertson loves her $16 Alia Feathertouch Pull-On polyester pants so much she bought ten pairs. Gloria Reed of Hot Springs Village, Ark. has six pairs in different colors. In Tucson "Ann" bought herself three pairs on Amazon.com because they're "very comfortable and wash well."
These polyester phenoms come from a $1 billion (purported sales), privately owned company called Nygård International, the largest producer of women's apparel in Canada. Never heard of it? Neither has Deborah Weinswig, a retail analyst for Citigroup , or Gabriele Goldaper, an apparel-and-textile consultant in Marina del Rey, Calif.--the same town where Nygård has corporate offices. Though headquartered in Winnipeg, the company has been selling modestly priced women's wear in America for 30-plus years and is now in 30 states, including in many Dillard's stores. Nygård International has global reach, with 12,000 employees and offices in Canada, the U.S., Hong Kong and China.
Who is the man behind the pants? Peter J. Nygård, a lion-maned immigrant from Finland, now in his late 60s, who started the company with a few thousand bucks in 1967 by buying a small women's clothesmaker. Today, according to Canadian Business, he's worth $877 million. "He's been a great partner," says Alex Dillard, president of the women's chain, on an 111/2 -minute video tribute to the founder on nygard.com. "He's changed the way I think about the retail business." How exactly? Dillard's declined a request for an interview. So did Nygård's big Canadian partner, Sears--and Nygård himself.
You get one view of this fashion mogul by going to his website and reading its highly selective press clips and fulsome testimonials from industry leaders and aging stars. It's a classic britches-to-riches saga of the self-made entrepreneur (and workaholic) "who has created a standard of excellence for the Canadian Women's Fashion Industry," according to nygard.com's hagiographic account. The site emphasizes his $2-million-a-year donations to breast cancer research.
You get quite another view by following the decades-long trail of legal controversies. Among other things, Nygård has been accused of abusive labor practices, tax evasion, sexual harassment and rape. (He has also been called the Hugh Hefner of Canada.) Punching back hard, he has sued his accusers and intimidated his critics with a small army of lawyers. "No one has ever disobeyed my orders and gotten away with it!" he once raged, according to the testimony of a former business partner. Controlling 100% of his company, Nygård calls all the shots. He is accountable to no one.
Nygård's board consists of himself and two division presidents. "He's not practicing good governance--but he doesn't have to" as a private company, says Don Delves, a Chicago consultant to CEOs. (Citing the company's private status, a Nygård spokeswoman declined to respond to most inquiries and would not comment on any litigation.)
Born in Helsinki, Nygård moved with his family at age 10 to Winnipeg, where they lived in a 15-foot-by-13-foot converted coal bin. After getting a business degree from the University of North Dakota, he went into the apparel business, eventually taking over Nathan Jacobs, a struggling clothingmaker. These days Nygård produces apparel under ten brand names, selling to retail chains like Sears and the Bay in Canada and Dillard's in the U.S., and operating 200 of its own stores north of the 49th parallel and 1,500 "soft shops" in department stores worldwide. Sixty cents of every revenue dollar comes from sales outside Canada. More recently Nygård has expanded beyond apparel to sell licensed products like footwear, accessories and jewelry.
The company has adroitly exploited information technology. It developed software that links manufacturing with a network of Nygård's retail accounts to keep them fully stocked at all times; reorders are shipped the same day. Another system inputs information and spits out the most efficient use of pattern and material, reducing fabric-cutting time from weeks to minutes. Some of that high-tech dazzle is on display in Nygård's flagship fashion concept store in New York City's Times Square, which opened in November 2009. An outside sign spells out his name in seven-story-high blue lights. Inside there are Saturn rings and rotating chrome mannequins, and an iLounge, where customers can watch fashion shows on huge digital screens and gaze at the "me-with" wall featuring Nygård with VIPs like Pamela Anderson and 1970s supermodel Beverly Johnson. Guests at the opening party included Finland's UN ambassador and Ramona Singer of The Real Housewives of New York City.
The store is steps away from Nygård's world headquarters, which houses its research and design studios. Across the street is the site of his turbulent entrée into the U.S. in 1978 through the contentious takeover of a leading sportswear designer's business. Struck between Nygård and Nancy Ebker, the deal resulted in a legal battle that lasted 12 years in New York federal court. Ebker testified that she and Nygård had orally agreed to a 50-50 partnership in which he would kick in $700,000 to finance the design and production of two sportswear lines out of her existing showroom. (Ebker says Nygård discouraged her pursuit of a written agreement, telling her that involving lawyers would be a "big mess.") Within months of the closing Nygård fired Ebker, took over the offices and threw her out.
Ebker is still fuming. "He literally ruined my life," she says. Ebker claimed in court testimony that in their heated final conversation Nygård told her, "I have all your patterns, I have everything. I own everything. . . . I never intended to put anything in writing. . . . You have nothing, and I am a millionaire." "Let's try to reason," she said she interjected. To which Nygård responded, "If you don't have $1 million by Friday, I am going to see to it that your name and reputation are totally destroyed in this market."
Nygård told the court a different story, saying the two had a calm conversation in which he suggested they amicably part ways. The judge found Ebker to be "highly credible" and deemed Nygård "evasive," "insincere" and "utterly lacking in credibility." "We deplore the unseemly conduct of Nygård," Judge Irving Cooper wrote but ultimately ruled that Ebker failed to prove she was damaged by his actions. Nygård's counterclaim was also dismissed. Ebker, who calls him "a true villain of the world," is writing a book about the case.
Allegations of sexual harassment have dogged Nygård for years. An investigative news program, aired by the Canadian Broadcasting Company in April, dredged up recent claims by former employees, many of whom focused on his alleged fiery temper. A former stewardess on his private plane told of one incident in which Nygård was accompanied by a bevy of topless women. At one point midflight, she recalls, Nygård, wild-haired and with his bathrobe open, began berating her co-worker, yelling, "You are nothing! You are garbage!" When the stewardess tried to calm him down, he screamed, "I am God! Do you not understand!?" Even after the security director intervened, she claims, Nygård continued to rage, shouting: "This is my plane. I can do whatever the hell I want!" Nygård told the CBC the incident never happened.
Even before the program aired, Nygård sued the CBC in New York for copyright infringement for taping video of a company fashion show. That case was dismissed in March. He also sued the broadcaster and ex-Nygård employees interviewed for the program in Canada. That suit, in which Nygård claims the CBC induced current and former employees to breach their employment contracts, is ongoing.
In the late 1990s Nygård paid to settle three sexual harassment complaints filed by former employees with the Manitoba Human Rights Commission. Since the cases were not adjudicated, the commission wouldn't release the records. But the local paper, the Winnipeg Free Press, published two articles detailing the complaints. According to the paper, one of the women, a 27-year-old travel coordinator, said she "repeatedly brushed off Nygård's touches and sexual advances." Another, a 39-year-old communications manager, claimed that Nygård added skinny-dipping to the agenda of a business meeting. While in the Bahamas, where Nygård maintains a home and office on a huge estate, Nygård "frequently was grabbing himself (wearing a very small bathing suit)," her complaint alleges, according to the Free Press. When called to his office, "I would find him in a state of undress (pants open, no shirt) or with his hand down the front of his pants fondling himself."
Nygård's lawyer claimed the women filed complaints as leverage to get better severance and that the company settled to avoid the cost of litigation. Nygård himself told the Free Press he knew nothing about the complaints and later threatened a defamation action against the paper, the reporter and his former communications manager for publishing the accounts. (The Free Press reporter doesn't recall a defamation suit.) He also faced a sexual harassment suit in 1996 from a Los Angeles employee, who claimed that, against her wishes, "she spent the night in Peter Nygård's bed and engaged in sexual intercourse with him." She later rejected his advances, she claims, and eventually was terminated. The case was dismissed.
Back in 1980 the Free Press reported that Nygård had been charged by Winnipeg authorities with raping an 18-year-old girl. (Canadian officials declined to comment on the charges.) Those charges were dropped months later when the complainant refused to testify at a preliminary hearing. According to the paper, Nygård said the police had "used 'poor judgment' in investigating the case and added that the whole matter could have been avoided had they adopted a more responsible attitude." He told the Free Press that he planned to establish a foundation to finance work to improve the quality of the Canadian judicial system. Says a Nygård spokeswoman, "We have not heard of this charge."
Nygård has also gotten into embarrassing workplace disputes with employees. In late April the National Labor Committee (NLC), a private group in Pittsburgh, issued a report claiming that Nygård pants from its Alia line were being sewn in a Jordanian sweatshop. The factory in Al Zarqa, the report says, employed 1,200 guest workers from Sri Lanka, Bangladesh and India who had "been trafficked to Jordan, stripped of their passports and held under conditions of indentured servitude." According to the investigation, women were forced to work 15-hour shifts, seven days a week, and were paid half the wages they were owed. A Nygård spokeswoman says a government inquiry found no truth to the allegations. But since the report, the NLC says, factory conditions have improved significantly; passports have been returned and workers now get Fridays off.
In 2003 an American couple sued Nygård in Florida for allegedly tricking them into accepting jobs as managers of his estate in the Bahamas. The couple claimed Nygård routinely flouted Bahamian immigration laws by failing to obtain work permits for employees. They also alleged he mistreated workers by fining them for petty infractions. Nygård had previously sued the couple in the Bahamas for defaming him by using confidential documents they took from the estate. He disputed the allegations in the Florida case but settled in 2007.
In a deposition taken in that case, Nygård conceded that employees at his estate are fined for lateness and poor-quality work. Following company policy, those penalties are supposed to be deducted from quarterly bonuses. But in the Bahamas they were deducted from some employees' weekly pay: $25 fines were common for such offenses as leaving a dirty glass on a beach cabana, not having Nygård's room cool enough when he arrived and for the presence of houseflies in the grand hall.
Executives at Nygård corporate offices live under a similar threat of penalties. For example, the employment contract of Normand Neal, a former vice president, advised that after receiving "full indoctrination," including so-called Basic Policy Framework Training, he would be subject to a fine equal to 5% of his bonus for violations of company policies. Neal was fired; he later sued for breach of his employment agreement; Nygård countersued and the case was settled.
But Nygård fought back hard against a seminal employment case filed by Sharon Michalowski, a store supervisor in Winnipeg. Claiming that she was compelled to work 16-hour days, Michalowski sued for 280 hours of overtime. The company argued she was a salaried manager who was not entitled to overtime. In a landmark ruling in 2007 the Supreme Court of Canada rejected that claim, upholding the Manitoba Employment Board's decision that managers with limited supervisory responsibilities must be paid overtime.
While the company has gotten entangled by many claims of harassment and wage violations, the most spectacular legal battles involve Nygård's personal life. Married briefly in the 1970s to a model, Nygård went on to have seven children with four different women. Kaarina Pakka, a former stewardess, fought him for years in Ontario courts for child support for their then teenage son. Nygård argued the amount she sought was excessive and would destroy the child's work ethic and give him a case of "affluenza." In an interim order he was forced to pay $9,500 a month, then a record-breaking amount. The case was finally settled in 2004.
Nygård has had a string of female companions. Some, like the late Playboy Playmate Anna Nicole Smith, also did fashion work for the company. Nygård dated Smith from 1998 to 2001. In 2007, after her fatal overdose, he appeared on the Montel Williams Show and told the audience of his desperate efforts to get her off drugs.
He met Smith at the Los Angeles Oscar party he has cohosted annually. Known as the "Night of a Hundred Stars," the glitzy event is staged simultaneously with the Oscar broadcast in the ballroom of the Beverly Hills Hotel. It's intended as a gathering for former award winners, but its tendency to draw B-list celebs prompted TV Guide Online to christen it the "Night of 100 Has-Beens."
The party is a touchy subject for Nygård. In 1999 he filed a defamation suit against Linda Lampenius for saying that he "deliberately hired celebrity lookalikes" for his "world-famous" Oscar party and "thereby defrauded the entertainment industry and international press." Lampenius is a Finnish violinist and model whom Nygård put up for a week and introduced to entertainment industry executives in the spring of 1997. (As Linda Brava, she appeared on the cover of Playboy in the May 1998 issue.) Nygård claimed that after helping launch her career, Lampenius turned on him and defamed him in the Finnish press. In a May 1998 letter from Nygård's attorney Lampenius was ordered to stop saying that "no women should go with Nygård" and that she needed her manager as "protection" during her stay at his house. When Lampenius refused, Nygård sued her in Los Angeles Superior Court. The case was settled three years later with Lampenius agreeing to print a full-page apology in the Finnish press.
In 2008 another woman--a former girlfriend--complained about an incident at Nygård's Marina del Rey residence. She sued him in Los Angeles Superior Court for slamming a bedroom door shut on her hand. Nygård settled the case shortly after it was brought.
Perhaps his loudest legal ruckus of late has roared out of the Bahamas. In 1987 Nygård bought a 4.5-acre estate on a peninsula near the Waspy enclave of Lyford Cay. A decade later he built the place into what he calls his "dream home": a 150,000-square-foot Mayan-style resort featuring 12 themed cabanas, volcanic smoking temples, a helipad, a disco, a casino and a human aquarium (with sharks on one side of the glass). The spread has been featured on Lifestyles of the Rich and Famous (Robin Leach is a friend) and has hosted the likes of Robert De Niro, Oprah, Michael Jackson, Prince Andrew and George H.W. Bush. Nygård now spends six months a year at his resort.
That has led to multiple run-ins with Canadian tax authorities. Since his move to the Bahamas, Nygård, a Canadian citizen, has claimed to be a nonresident and therefore not subject to tax on income generated outside Canada. The tax ministry challenged that status in its most recent audit in 2006, claiming Nygård owed an additional $15 million in taxes. Nygård contested the assessments, arguing he severed residential ties with Canada in 1975, and ultimately prevailed--but he was subject to taxes on an additional $2 million in income.
A confrontation with a fellow tycoon and Lyford Cay neighbor continues to gather hurricane strength. The chief complaint: that Nygård is operating a commercial resort in a residential community; ads offer to rent the place for $40,000 a night. His closest neighbor, billionaire Louis Bacon, who runs hedge fund Moore Capital, has borne the brunt of it. (Bacon bought the Forbes' family ranch, Trinchera, in 2007.) For years Bacon complained about the noise coming from wild parties Nygård routinely hosted at his resort. As Nygård himself explained in a 2007 deposition, the bashes (which he calls "pamper parties") are a Sunday afternoon tradition both at his Marina del Rey location and at Nygård Cay. "We have been running these parties for about 15 years," he said. "We start sports activities in the afternoon and play beach volleyball and have dinner and a bit of karaoke and dancing and massaging." The attendees are local women; dancers are treated to smoke-emitting floors with recessed flashing lights and cameras that shoot them from below.
Fed up with the loud music, Bacon installed industrial speakers on the boundary of his property in October 2009 to deflect the noise back to Nygård Cay. Then in November, at the same time Nygård was opening his flagship New York store, a huge blaze tore through his estate, reportedly the result of an electrical malfunction. Nygård vowed to invest $50 million into rebuilding the compound. But a letter from the Bahamian prime minister's office in July rejected his construction application, citing the improper expansion of his property through intentional accretion of land over the seabed. A week later Bahamian police officers raided Bacon's home, handcuffed and searched his staff, and confiscated the speakers based on a tip suggesting they were "ultrasonic weaponry." (The speakers were returned after police confirmed they were not military-grade.) Bahamian papers blamed the raid on Bacon's dispute with Nygård, which spilled into the courts in August when both sides sued each other, claiming easement violations, among other things.
Bacon is no patsy. In September the U.K.'s Daily Mail dubbed him "a hedge fund Godfather," referring to his "omnipotent status" in finance and his penchant for armed guards; the paper was forced to retract the story and print an apology. For once Nygård seems to have taken on an adversary every bit as powerful as he.