For Retail Chain, a $32 Million Bummer

After 37 years of catering to the counterculture, the owners of the Georgetown-based fashion chain Up Against the Wall were poised for a $32 million payday.

Instead, the proposed sale of their company has wafted away, and the firm is embroiled in a legal dispute with its former controller. In court papers, the company said he was fired for doing a poor job. He said he was fired for refusing to manipulate the company's books, and in pressing his case, he attempted to subpoena the prospective buyer while the deal was pending.

The retailer's owners -- co-founders Charles Rendelman and Stuart "Izzy" Ezrailson, and Los Angeles Lakers general manager Mitchell Kupchak -- had planned to merge their 25-store chain into California designer jeansmaker Blue Holdings Inc., headed by Paul Guez, who popularized Sasson jeans more than a generation ago.

But Blue Holdings announced Oct. 10 that the cash-and-stock deal was off, saying both sides had decided it was no longer in their interests.

"It just didn't work," Ezrailson said, noting that the price of Blue Holdings stock had declined. The shares, which were trading above $5 when the merger plan was announced in June, closed at $4.14 on the day the companies agreed to cancel it.

Up Against the Wall operates several stores in the Washington area and others in such cities as Miami, San Francisco and Los Angeles. The merger would have included the Commander Salamander store on Wisconsin Avenue in Georgetown, also owned by Up Against the Wall parent company Long Rap Inc. The longtime punk emporium last week displayed such novelties as vinyl "naughty nurse" costumes, toilet paper bearing President Bush's picture, High Times magazine for marijuana aficionados ("Beginner's Guide to Harvesting") and a Marie Antoinette action figure ("Press button on back for Ejector Head Action!").

Up Against the Wall targets a different niche. Its wares include $320 Prps jeans with pre-shredded knees, $115 Ed Hardy rhinestone-studded baseball caps and $775 Parajumpers parkas with fur-lined hoods -- not to mention Blue Holdings brands Antik Denim and Taverniti So Jeans.

The stores have been Georgetown fixtures since soon after a young Ezrailson gave up a job guessing people's weights and ages at Glen Echo amusement park to go into retail. The company became a family affair as Ezrailson's wife, Wendy, joined in the hunt to stay ahead of the fashion curve, riding trends from hippie to hip-hop.

In recent days, Ezrailson said he was out observing styles at Howard University's homecoming and at New York's Penn Station. He spoke by phone while meeting with a top executive of Rocawear, the clothing company co-founded by rapper Jay-Z.

"He really has his pulse on what's cool, what's happening, what's edgy," said Rocawear's Ronnie DeMichael said of Ezrailson. "He lives and breathes it."

The merger could have enabled the owners of Up Against the Wall to cash in their stakes, while providing capital for expansion of the chain.

Being a closely held business can be a disadvantage, Ezrailson said. "Narrow-held means narrow mind," he said.