Citizens of Humanity Partners Break Up
After starting two denim companies together, Michael Glasser and Jerome Dahan have ended their partnership at Citizens of Humanity, a high-end blue jeans line founded last year.
Dahan and Glasser started Seven for All Mankind in 2000 but left in 2002 after a disagreement over profits with a third partner, Peter Koral.
After filing a lawsuit against Koral, the pair started Citizens of Humanity, which gained annual revenues of $60 million.
The two spent weeks sitting in a Los Angeles courtroom this summer as their lawyers sparred with Koral’s lawyers over profits that Koral allegedly did not pay his two former partners. That trial ended in August, with a judge later deciding that Dahan and Glasser should be paid nearly $56 million for profits they never received and for their half of the Seven business, which at one point was valued at $130 million.
But winning the lawsuit could not keep Dahan and Glasser together. On Sept. 17, Dahan agreed to buy Glasser’s 39 percent interest in Citizens of Humanity.
“We did a great thing together, and it was time to move on,” said Glasser, who now has millions of dollars to provide him with a cushy retirement or the start of a new apparel venture. He said he wants to spend more time with his 16-year-old son, Derek, and his 14- year-old daughter, Aryn.
“Jerome is younger than I am, and he is going to work harder than I am. He has his own ideas, and I have my own ideas,” Glasser explained.
In a statement, Dahan said: “We have been partners and friends for a long time and have been through a lot together. On many levels, only the two of us can share those experiences. I am looking forward to continuing to build Citizens of Humanity into a strong company with a great team of people.”
Glasser and Dahan first met at Lucky Brand Dungarees, where Dahan was a jeans designer and Glasser was involved in marketing.
They left Lucky to start their own high-end denim line, Seven for All Mankind. With retail price points starting at $125, the line was soon carried at high-end stores such as Barneys New York and Nordstrom.
Dahan was the designer, and Glasser was the salesman. But they needed a financial investor and signed on Peter Koral, who operated moderate knitwear business L’Koral Inc. in Los Angeles. Koral was to have a 50 percent interest in the denim line, and Glasser and Dahan were to have the other half. When the denim line became profitable and could stand on its own, it was to be spun into a separate company.
But Dahan and Glasser left in 2002, maintaining they never received their share of the profits for that year and Koral was dragging his feet in forming a new company because he needed the denim line’s revenues to gain financing for his moderate apparel business. Dahan and Glasser filed a lawsuit against Koral in late 2002 and won.
Koral has said he plans to appeal the judge’s decision. —Deborah Belgum