How Did I Get Here by Tony Hawk, Pat Hawk Page B

array of products, which meant increasing our line of credit. Per, who ran Blitz, resisted. He and Jade started to butt heads. The co-owners of Blitz’s other brands began to complain that too much energy was being placed on this one new business. Something had to give.
    Jade said he was interested in merging with a more established clothing company for better cash flow. We agreed that that was a good idea. In late 2005, he began shopping Howe to larger manufacturers, finally cutting a deal in May 2006 with Seattle Pacific, the same company that owns Union Bay. At the same time, our bank was calling in its loan. We talked the bank into a 90-day extension while the deal got finalized.
    The Howe–Seattle Pacific deal closed in September 2006. Jade was happy. Seattle Pacific was happy. Per and I, however, were not happy, because Blitz’s share of the sell price didn’t come close to covering our losses by the time expenses were paid out. Also, with our credit lines now stretched to the breaking point, Blitz’s once-solid financial reports were a mess.
    Ultimately, the entire debacle was the beginning of the end of my ownership of Blitz Distribution, and the closing of my business relationship with Per. Although it was a difficult time, some good came out of it. I learned a hard but indelible lesson about the importance of sticking to my core business. And I got to wear a lot of cool shit.
    Bye-Bye Blitz
    If Howe weakened Blitz’s immune system, the tanking economy gave it a serious infection.
    Like most companies, Blitz suffered serious cash-flow problems once the worldwide economy began to slide into deep recession in 2007. As banks started collapsing, loans became virtually nonexistent. On the other side of the ledger, retailers wanted longer and better terms, sometimes even seeking for the first time to return products they’d already bought. Some large sporting goods chains refused to take delivery of goods that had already been manufactured and were on their way to our warehouse. We were overstocked and underfinanced.
    Things got really scary when the banks decided they’d no longer let us use the corporation as collateral for business loans. They wanted Per and me to personally guarantee Blitz’s loans, meaning I’d have to put up things like my house as collateral—in a faltering economy. We hadn’t taken that kind of risk since the birth of Birdhouse, when we’d been willing to gamble because we’d had no other choice. It felt like we were going backward in our business.
    Before the apparel business took us for a ride, Per had been known to run a tight ship. He was quick to lower overhead and lay off employees if times were tight. It was often hard but necessary. But now he was talking about cutbacks I couldn’t live with: trimming the Birdhouse marketing budget and maybe even its team. I’d already agreed to defer my own royalties (hoping to get paid at a later date) to keep Birdhouse afloat. Now the whole team was at risk of losing salaries, ads, and travel budgets. That was the last thing I wanted to happen.
    By this time I’d already had some success building up my own, separate business, Tony Hawk Inc. (THI), based on a completely different business model from Blitz’s. THI has two simple rules:
    1. No debt.
    2. Whenever possible, let other people pay.
    I’ve had the same financial advisors for many years. My closest advisors are my sister Pat and Sandy Dusablon, who’s the company’s CFO and my personal CPA. Sandy has taught me well over the years, showing me how to interpret balance sheets and profit-and-loss statements. I know what my assets are, what A/P and A/R mean, and I have final say at every corporate meeting. It’s not as much fun as pulling backside smith grinds, but it’s important stuff, and pretty interesting once you understand it.
    Buying Back Birdhouse
    Anyway, as Birdhouse started to teeter because of the Blitz-Howe disaster, Pat, Sandy, and my tax accountant all agreed that