American Dream Achieved
IBA, as an approximately fifty-year old business brokerage firm serving the entrepreneurial community of the Pacific Northwest, has been uniquely positioned since before the American Bicentennial celebration of 1976 to witness and hear the stories of thousands of people who have lived the American dream through entrepreneurship creating beloved businesses by employees, customers, and communities while finding personal fulfillment and financial prosperity through execution of their ideas, hard work, perseverance, and ability. In an effort to share these stories heard throughout the years by our team of business brokers, who are commonly regarded as the “best listeners” in the M&A industry, IBA has retained highly regarded writer, Nesha Ruther, to tell their stories. It is our goal to share one story a month. It is our hope that you will find the stories as inspirational and motivational as they are to us and the buyers who bought the businesses in IBA facilitated transactions in Washington, Oregon, and Alaska.
The Story of Michael La Moria (Mephisto Shoes)
By Nesha Ruther
Michael La Moria learned from an early age that he had to work for what he wanted. Growing up, his father was a police officer and his mother volunteered at their local church. For the La Morias, money was often tight. “As kids, if we wanted something, we had to go and do little odd jobs to make a buck,” Michael says.
Michael recalls one instance in which he and his siblings wanted nicer clothes for the school year, but his parents could only afford Sears. “We wanted Nikes and San Francisco Riding Gear Jeans, and my parents were like, ‘Great, go get a job,’” he says.
At 12, Michael and his brother had a 120-house paper route. They would get up at 5 am, three times a week to deliver papers. “I think that was the start of learning about work ethic,” Michael remembers.
At 14 Michael went to IHOP looking for a job but the staff told him he was too young. Not one to take no for an answer, Michael told the manager he would work a month for free to prove he could do the job as well as any 16-year-old. The manager agreed. Michael continued to work at IHOP every weekend for the next two years.
That job then led to work at a local hotel, Executel. When Michael got his driver’s license at 16, he became Executel’s van driver, picking up guests from the airport. At 17 he became their relief night auditor. “I was doing the books, doing the deposit, and back then it was like $18,000 for a deposit for the hotel. I was entrusted as a 17-year-old to do this,” Michael says.
Three days a week, Michael would also take shifts running the front desk. “Monday through Friday during the year I worked 3 pm to 11 pm. Getting up and going to school at 7:30, coming home, and working at the hotel. I’ve always worked my whole life.” How Michael found time to eat, sleep, and do homework is a mystery even to him.
After graduating, Michael moved from Seattle to Bellingham, where he started school at Western Washington University. On the side, he got a job selling women’s shoes at Nordstrom. This temporary job as a shoe salesman would prove valuable later in his career.
One day, Michael was at the University store looking for a school sweater. “I went into the bookstore and noticed that all the sweatshirts were these big boisterous logos of a Viking—that was our mascot—I just thought they were tacky. I wanted something a little more classic and Ralph Lauren was a popular brand at the time,” Michael recalls.
Michael went home with ideas for a new logo flying around his head. He designed a simple WWU logo and had it embroidered on a Champion sweatshirt. With the $500 he saved from his job, he ordered 48 t-shirts and 10 sweatshirts.
On Western Washington University’s campus, there was a street titled “Vendor’s Row”. Michael got a business license, and during finals week, set up his wares. “It was a wholesaler’s permit that allowed you to sell on campus, they only charged a few bucks a day. I set up on a little picnic table underneath a covered area outside the Student Union, and within two hours I sold out the 48 t-shirts and 10 sweatshirts,” Michael says. He made $1,000. “I doubled my income and made in two hours what took me two weeks to make at Nordstrom’s. That was the moment, I was like ‘Wow, why would you go back to working 80 hours when you could work two hours and make the same amount of money?’” Michael put the money he made back into his small business, printing more t-shirts and sweaters. He quit his job and by the end of the year had about $24,000 worth of inventory.
Michael valued innovative ways to make money and hated how much of his income went to rent each month. He decided to use his savings to buy a house. “I found that if I bought a house with four bedrooms, I could rent out each room for $400 a month and live rent-free,” he says.
He got a loan from the bank and purchased a property on campus for $62,000. He brought in some of his friends to live with him. Michael’s mortgage was $600. After paying that, he had $1,000 a month left over from his roommates’ rent payments. He turned the dining room into a studio apartment where he lived. “I was like, ‘Wow, why isn’t everybody doing this?’ Everybody has the notion that you have to pay rent, but I wanted to know how I could make money and live at the same time,” he says.
This creativity, resourcefulness, and bold attitude would define Michael’s career for years to come. “When you don’t have the means or the money, you’re forced to be creative,” he explains. “I was also at a point where I can risk everything and what do I have to lose? What if I fail? I’ve lost nothing. I’ve never really had a fear of taking risks. Anything I’ve ever done I’ve entered knowing the worst-case scenario. What’s the worst thing that could happen if I do this? You assess the risk, and you move forward.”
Michael continued selling clothes and renting out his house but kept an eye out for more ways to make money. He took stock of what he had. “I’ve always looked at things as, how can I monetize what I already have. I had a car, so I’m like ‘How can I make money by owning a car?’” Michael realized that he could purchase additional cars and resell them. “I started buying and selling these Volkswagen bugs. At any given time, I’d have two to five cars and I’d be making $1,000, $2,000 a vehicle,” he says.
At this point, Michael was learning more from his multiple side businesses than he was in the classroom. More inclined to hands-on experience than reading a textbook, he decided his time was better spent working. “I was paying for my education, going to school, and I finally realized during finals week, it was costing me too much money to be taking finals when I could be out selling for the Christmas holiday season. I made a pivotal decision that I was learning more by doing that than I was going to school and having a teacher tell me how to run a business,” he says.
Michael knew however that leaving college without a degree would disqualify him from working in the corporate world, at that moment it solidified for him: he was and would always be a small businessman. “It was my path forward to stay in small business,” he says. “And I have been ever since.”
It helped that Michael had never enjoyed spending money nearly as much as he liked making it. For him, the thrill of income was less in the money itself and more in the strategy of earning it. “It was the game of trying to grow [my income],” he says. “It was watching something become exponential, turning a thousand into two, into four, into eight, into 16 and watching it grow.” When Michael did splurge on fancy items, it was for the sole purpose of selling them down the line and making a profit.
After leaving college, Michael continued this practice with his real estate investments. He refinanced the home that he owned and purchased a second house, recruiting more of his college friends to move in.
However, one of his more lucrative streams of income, his university apparel business, had a serious problem. During the summer, the university campus would empty, and Michael wouldn’t be able to sell any sweatshirts and t-shirts. He began looking for another approach.
One of Michael’s fellow vendors on campus was a man from Bolivia, who would sell colorful scarves, hats, sweaters, and gloves. His merchandise was eye-catching, and he always had a steady stream of customers. His profit margin was large as well, buying the items for $12 a sweater, and selling them for $45.
“He wouldn’t let me buy his merchandise during the school year because we’d be competitors,” Michael says, “But I thought, ‘what if I bought a bunch of sweaters in the summertime when it’s really slow, and go up to Alaska and sell them around the state during summer vacation?’”
Michael used one of his cars as collateral and got a $10,000 loan from the bank. He used that money to buy out his fellow vendor’s merchandise and purchase a 17’ foot camper trailer. It took Michael five days to drive up to Haines, Alaska. He took a ferry to Skagway and set up shop. Within three weeks he had sold all the sweaters and made more than double in profits.
Michael was strategic in his approach. Skagway was a popular stop for cruise ships, and the locals were fiercely protective of the business brought in by tourists. Michael made sure he had a local business license and even paid rent to a grocery store owner to sell near the store’s parking lot. Additionally, he would sell wholesale to local ski shops. “They could make great money selling [the sweaters],” Michael says of the local businesses. “Not to mention in Alaska you don’t have a lot of people coming through to sell product [wholesale]. To have it right there was a really nice convenience for them.”
It was this experience of traveling across Alaska that led Michael to his next big business venture. When driving from town to town, he would stop at local taverns to grab a bite to eat and play some pool. “You would walk in, and it would be smoke-filled,” he recalls. “You would reek of smoke, and I’m not a smoker so I didn’t appreciate that. But when I got back to Bellingham, Billiards was an up-and-coming thing, it was really big at the time.”
It was the early 90s and Billiards was on the rise, however, there were few options for those who didn’t want to come out smelling like a forest fire. “I thought, ‘What if I opened a smoke-free billiards parlor?’”
Michael leveraged the two homes that he owned in order to get a loan. He went to 11 banks but was turned down at all of them. Like his first job at IHOP, the banks felt that he was too young. “They said, ‘We’re not going to lend this 25-year-old money. That’s one of the lessons I’ve learned. You cannot accept no. You can’t let somebody tell you that your idea is going to fail. You cannot fall into those beliefs,” Michael says.
“Your future is your own. You’re your own worst enemy and your biggest obstacle to anything you want to do in life. It’s just about believing in yourself and pursuing it. Don’t let others tell you otherwise.”
Michael persevered, and on his 12th bank visit, he got the banker to agree to view the space Michael was interested in for his Billiards Hall. “He saw the space, he saw the collateral, the two homes, and equity, and he says ‘Yeah, no problem, we’ll give you the money,’” Michael recalls. At 25 years old he received a loan for $65,000 to open his business.
The Fairhaven Billiard Parlor opened on the fourth floor of a historic building originally built in the 1890s. Michael’s billiard hall was its second occupant in 100 years. The first business to live there was a gentleman’s club that once welcomed Mark Twain. Michael’s club was in good company.
Unfortunately, the building’s long vacancy meant a lot of work needed to be done to make it operational. When Michael began renting it, the space was not even insulated. After working with the landlord and contractors, Michael was able to develop it into a truly special location “It was four flights up and overlooked Bellingham Bay. “It had an amazing view, 14-foot ceilings with brick walls, and deep, rich, dark wood floors. It was a really beautiful space.”
The only downside was moving 1,300-pound pool tables up four flights of stairs, Michael had to rent a forklift to bring them up because it was too dangerous for the delivery men to carry. Every keg Michael ordered for the bar had to be pulled up the flight of stairs on a dolly. “I was the most hated delivery in town,” he says with a laugh.
For the opening night of the Billiards Parlor, Michael went all out. “Perception is reality,” he says. “I had handmade invitation cards with a wax seal and a stamp and sent them to every influential person in the city, the mayor, the police chief, anyone who had any prominence or would be an interested patron. I wanted it to be an upscale, non-smoking establishment.”
By creating a high-quality invitation to his opening night, Michael was able to use it as an advertising tool to develop an interest in an otherwise unknown business. It was a raging success, and come opening night, the Fairhaven Billiard Parlor was packed.
The Parlor had a Tavern license, so Michael began selling wine and beer. He quickly realized people often wanted food with their drinks, so he started serving brick oven pizzas. Success came quickly, and Michael broke even in his second year of business, but the work was exhausting. “The business was open 3 pm to 11 pm Monday through Wednesday, and then 3 pm to 2 am Thursday, Friday, and Saturday. So, I would get to work at 2 in the afternoon and get home at midnight or 3 in the morning,” Michael says. “You’re working the opposite of society. I created this whole idea that it would be fun going to a tavern or bar with friends, but when you’re the last one there, it’s not so fun.”
The glamour and novelty of the business had begun to wear off, and Michael found that he was no longer able to do what he loved most—building creative ways to generate income. He showed the business to some brokers, but they weren’t optimistic about his options.
Michael, in the spirit of perseverance, decided that if he couldn’t sell the business, he would sell the property itself, so he began the process of getting his real estate license. While Michael had been running the Fairhaven Billiard Parlor, the building had been purchased by a new owner who invested a lot of money into fixing the place. The addition of an elevator was not only a big relief to the local delivery men but increased the value of Michael’s property. “I was on a ten-year lease and still had seven years left,” Michael says. “[The building owner] realized that he could get more money by buying me out and cutting up the space.” Michael had found a profitable way out.
Now 29, Michael had spent the last decade with a single-minded focus on his various business interests. He found that he was ready to meet someone and settle down. “I had a heart-to-heart with myself. I was single and had been single for several years. I realized I was not going to meet a woman in Bellingham. There was no job market in this small college town, so the women would leave after college.”
Michael went on vacation in Hawaii, and on his way home, stopped to visit a friend in Los Angles. While there, his friend set him up on a blind date with his wife’s assistant who worked at Nordstrom. “I went out with this gal and thought, ‘Wow, she’s really cute.’ I got back to Seattle and said, ‘You know what, I’m going to move to California to pursue her.’ I tell people all the time, there’s a very fine line between stalking and romance,” Michael says laughing.
Michael moved to California and got a job at—you guessed it—Nordstroms. “I got a job in the department beneath her. It’s kind of creepy, but it all worked out and she became my wife!”
That decision would chart the way for not only Michael’s personal life but his professional life as well. He returned to Nordstroms shoe department before quickly landing a job with Mephisto Shoes, opening their shops and concept stores. “I was responsible for getting their stores open and managing it all. I was also doing the marketing for the company,” Michael says.
Mephisto had made a name for itself making high-quality comfort shoes. At the time, stylish shoes that provided comfort and support were hard to come by. “[Mephisto] is top shelf, they’re high quality, but they had a nine-month backlog of orders. They couldn’t ship enough; their service was terrible. The customers hated it, but they were still standing in line to buy this product.”
Once again, Michael saw an opportunity. “I realized that if the company could turn itself around and figure it out, they would be a gold mine.” At the time, Mephisto’s President was based in Missouri, and tired of commuting across the country. He wanted to move the company to headquarters to Tennessee. “I didn’t want to move to Tennessee, so I ended up finding a location in Newport Beach and opening a concept store.”
After years of running his own business, Michael was able to use the same creative problem-solving he had always loved, in an already-established company. “I had been running several small businesses for ten years, from ages 20 to 30. It’s a lot of work and it’s taxing,” he says. “[Mephisto] was organized. There’s a template, there’s a model. When you own your own business there are just a million details that have to come from somewhere. But when you have somebody supplying you with all those things, it’s a lot easier. They had all the support I needed to run a store, creating fixtures, creating marketing campaigns, all the templates and everything to run a business was already there.”
One valuable lesson Michael learned from Fairhaven Billiard was that the revenue he made was only worth the amount of time and effort it took to accomplish it. “I could have one employee run a store and do several thousand more in sales then I would having a bunch of overhead, staff, a bigger store, and a warehouse for all the inventory.”
Michael opened his first Mephisto in Newport Beach with $15,000 and a $150,000
loan from the company. He paid it all back within a year and began building up his inventory. He continued to run that store for three years.
At that point, Michael and his wife had their first child. “We didn’t want to raise our daughter in California because we had no extended family there,” he says. “We thought, ‘let’s sell the business and replicate what we’ve done here in Seattle where we can be near family.’”
The business that Michael had started with $15,000 sold for $850,000. He and his wife moved back to Seattle, and Michael opened a Mephisto store there. The business took off, and in 2008, he opened his second store. From there, he began growing their online business, to great success.
With great success, however, came significant challenges. In the early days, Michael didn’t have enough money to hire staff. He worked seven days a week, the only way he was able to make enough to buy more inventory.
Another factor was that Mephisto’s shoes were all handmade, making inventory choices challenging. “When something is mass-produced, there can be a warehouse with 10,000 pairs that you can get at any time,” Michael explains. “With a handmade product, if it’s a hot item or if it sells out, you can have 100 customers that want it and can’t get any because it’s gone. I had to learn how to hoard a product. As soon as you get a read on something, you’d have to get behind it in a big way to protect future sales.”
This required a key eye for trends and the products customers liked, otherwise Michael would end up ordering more of a certain shoe and be unable to sell it. “There were a few times when I could get a product and sell five the first day. I’d be like ‘Oh my God, that’s crazy, I’ve got to buy all of them.’ So I’d buy 180 pairs at wholesale price and spend $30,000 on taking this bet. Then all of a sudden, they all come back, they didn’t fit right or people don’t actually like them, and you’re sitting on that,” he recalls.
Another challenge was one universal to any business owner, employees. For Michael, who had spent the majority of his career as a lone wolf, this posed a steep learning curve. “Employees are the single greatest challenge to any business. They can either make you or break you. My philosophy with staffing has always been you’re only as good as your worst employee because that is who represents you when you’re not there.”
Over time, Michael learned to celebrate the successes of his staff, while also keeping an eye out for bad actors. “One bad employee can destroy your business: it’s just constantly being aware of those challenges. But when you get it right, you can have someone running your staff and step away.”
In his later years running the Mephisto stores, Michael was able to achieve that sweet spot. “My last few years I was able to work four hours, five days a week, and take vacations when I wanted because I had great people and I trusted them to run the show. They allowed me the freedom and flexibility to do other things,” he says.
After 23 years working with Mephisto, and 17 as a store owner, he felt ready to sell the business. He began reaching out to local brokers, before eventually choosing Gregory Kovsky at IBA. “I interviewed three different brokers, and a lot of them were self-serving. The interest wasn’t in selling my business, but in what I could do for them. People wanted money up front, they wanted me to pay monthly fees until they found something,” he says.
“I got to Gregory and researched him. I saw that he was the preeminent player in the Northwest. His fees were more than reasonable relative to anybody else that I spoke to. I think Gregory’s calling in life is to do what he does. He gets it, he loves it, and he’s passionate about it. He was there the whole time and got a deal I didn’t think was going to get done.”
Gregory sold Michael’s two physical stores, and the online one to the same buyer who bought Pedag USA owned by David Shinder, a longtime friend of Michael’s and another business owner featured in the American Dream Achieved series.
In December 2019, Michael exited Mephisto. Since then, he has stayed active in pursuing his entrepreneurial interests. “I don’t know that I will ever be fully retired,” he says. “My thought process is always ‘How can I add value? How can I create something valuable out of what I have and what I do.’”
“Most people in life have a job and that is their single source of income. I’ve always looked at your income like a fishing line. If you’ve got one line in the water, your odds of catching a fish are one. If you have five lines in the water, you increase your odds of catching fish fivefold. If a line on the other side of the boat starts to catch some big fish, you’re going to move to the other line.”
Michael continues to have some lines in the water. A long-time hobby of his has been remodeling homes. Since selling his business, he has focused on his passion for architecture and real estate. “I’ve fixed up homes for 35 years. It’s how I relax. I love working with my hands, I love the design process of manifesting something from an idea to its physical form and seeing the finished product, and having somebody come in and buy it, appreciate what you did with it.”
Forever the calculating creative, Michael continues to buy houses, make them into something beautiful, and maximize their value. He also appreciates his family for being willing to live in run-down homes, and only moving out once he has made it into something spectacular. “My girls had these beautiful walk-in closets in the last house, and then we move into this crappy mid-50s home they have to suffer through for the next six years,” he says, laughing. He has eased the transition by getting them a new dog in exchange for their living in a less-developed house.
In the spirit of seeing business opportunities everywhere, Michael has begun designing the prototype for a dog-friendly toothbrush. “If you brush your dog’s teeth and care for its oral health, it is preventative for other health problems. During Covid, I started developing these prototypes and went through 25 iterations.”
For Michael, the American Dream has been the ability to pursue his wide-ranging interests, from shoes to architecture, to canine health. “Rather than just working a job and grinding to make a buck, I am able to pursue the avenues in life that I enjoy, that I’m passionate about, and that I find fulfilling.”
“If I can go to work every day and love what I do, it’s not work. I’ll always be doing something because it’s a creative outlet, it’s solving problems, it’s interesting, and it makes me money.”
“I think people downplay their abilities in terms of what they can achieve. When you look back, you realize you can achieve anything. What do you have to lose?”
Nesha Ruther
Nesha Ruther is a writer and editor from Takoma Park, Maryland. She received her BA in English Creative Writing from the University of Wisconsin Madison, where she received a full tuition scholarship through the First Wave program based on academic and creative merits. She was a 2016 Young Arts winner in spoken word, a 2016 winner of the DC Commission of the Arts Larry Neal Writing Award, a 2017 winner of the Mochila Review Writing Award, which was judged by Nikki Giovanni, a 2020 winner of the University of Wisconsin’s Eudora Welty Fiction Thesis Award, and a 2022 Tin House Winter Workshop Participant. She has been commissioned to write and perform for the National Education Association, and has had work published in NarrativeNortheast, Angles Literary Magazine, Beltway Quarterly and more. She currently lives in Cincinnati Ohio and is the Lead Manuscript Developer at Holon Publishing and Collective Press.