A die-hard work ethic mixed with good and bad timing makes Iraklis Karabassis United Colors of Benetton's go-to guy and one of the area's busiest behind-the-scenes retailers
Washington Business Journal - by Eleni Kretikos Staff Reporter
He may be the biggest name in Washington business you never heard.
His name is Iraklis Karabassis, and the pronunciation actually isn't as hard as you'd think -- it sounds just like it's spelled.
Karabassis runs a $110 million company, Georgetown-based IK Retail Group, which is the largest owner of United Colors of Benetton stores in the country.
Some say luck just happens. Some say if you work hard you create your own luck. Things happen because you make them happen. There is no doubt that Karabassis is a self-made man who has worked tirelessly to make his own luck, but he also has an exceptional knack for being in the right place at the right time.
But, he'll tell you, his luck didn't start out so well-timed.
The point at which life's path -- and fortunes -- changed was a tragic one for Karabassis: His father, Dimitri, died of a heart attack at the age of 49. Karabassis was in high school. He still reflects on the moment with a touch of wonder:
"It's unbelievable how life goes," he says. "The family fell apart. My father was a blacksmith, third generation. This was to be my life. But when he died, this opened up my possibilities. It comes down to that."
An older brother was in college and his mother, Fotini, a homemaker. Money was nonexistent. He knew he had to do something to contribute.
And so after finishing high school, Karabassis left his native Volos, Greece (between Athens and Thessaloniki), and headed for Florence, Italy, to pursue his longtime dream of becoming a soccer trainer. Karabassis already was playing on a semi-professional level, but he didn't speak Italian and the school to which he applied didn't accept him.
Not right away, anyway.
He continued playing soccer -- for which he was now getting paid -- took Italian-language classes and got into the University of Florence, where he graduated with a degree in geology.
He had plans to get a master's degree in geology from a French university (his thinking was to return to Greece and study a major earthquake that had struck the region). But his French wasn't strong enough, so he soon abandoned that plan in favor of work.
He landed in a restaurant, tending bar.
The restaurant owners, it turns out, had the first franchise development agreement to open Benetton in northern France. Though Karabassis rejected initial offers to work for Benetton, the company offered him two months' salary in advance and a chance to train in Bologna.
For a kid looking for a way up and a way out, the offer was too much to refuse.
At 22 years old, he began working for Benetton in Paris.
Work became his priority. Benetton was a rapidly expanding business at the time, opening stores at the rate of one a day.
Karabassis opened stores for the manufacturer.
He handled site selection.
He found franchisees.
In 1982, he was sent to Washington to look into opening franchised locations. Though the opportunity he was sent for didn't work out, another popped up.
He would become an agent for Benetton (www.benetton.com). He opened his first D.C.-area store at White Flint Mall in December 1982.
Branding Benetton
The European manufacturer's colorful knit sweaters, skirts and pants were unlike anything many American teens had seen before. Sales soared, bringing in anywhere from $800 to $2,000 a square foot.
Throughout most of the 1980s, his number of licensing agreements exploded.
But American retailers were coming on strong. The Gap, the Limited and J. Crew were producing less expensive and more innovative products quicker with more organized back offices.
By 1989, Benetton's American business was on the ropes.
"They tore us apart," Karabassis says. "We had to choose to give up or come up with an idea to react."
Undoubtedly, it would have been easier to return to Europe. But Karabassis chose to fight.
"He's quite a remarkable person," says D.C. developer Herb Miller. "I found him to be totally focused, and he seems to combine creativity with dogged management and a commitment to making things work."
He stuck with the Benetton name. He began choosing a different line of products to carry in the stores, a line more focused on women's fashionable business suits, dresses and career separates and some eveningwear. Coupled with an innovative store design that showed the clothes better, the number of stores multiplied.
And multiplied.
"When I did that, I saw results immediately," he says.
Since 1999, Karabassis has built his IK Retail Group into 77 Colors of Benetton stores that represent 75 percent of what Benetton has in the U.S. He's also branched out and owns 13 Sisley stores (a Benetton sister company) and six MaxMara stores in the United States. He also owns five Benetton stores in Canada. His Georgetown offices are just a short walk from a three-story Benetton store, the most profitable Benetton in his group.
This year, he will open four Canadian Benettons and seven in the states, including a 10,000-square-foot store in the Washington area, at the Gallery Place complex near the MCI Center.
His growing IK Retail team consists of 42 employees in the corporate office (and more than 1,400 in the stores). His wife, Yasmine Karabassis, runs the MaxMara side of the business. He has plans to double his current sales level of $110 million within three years.
"He came here with nothing and in a short time, he made a considerable business that was expanding," says Guglielmo Melegari, the president of MaxMara USA. "He's a very smart person, a self-taught person and a great people person."
Work, work and more work
As Karabassis quietly plods along opening stores, he doesn't seek out attention for himself or his company. Those who know him might find him hob-nobbing at Cafe Milano, a restaurant concept he created and is a partner in. He can just as often be found at home relaxing with his family.
But his connections with top European retailing families have led some to enlist his help.
Ed Asher, the president of Chevy Chase Land, found himself on Karabassis' doorstep asking him to consult on The Collection at Chevy Chase, a 100,000-square-foot luxury retail project.
"He came in with a list of people he knew and people we should go after," Asher says. "He called up the president of Armani.
"We had intended to work through a retail broker." Asher continues. "But the more we learned about him, the more excited we became at the prospects of him being able to explain the project to the owners of these luxury shops. You just don't get that opportunity."
Karabassis seems unstoppable when it comes to work.
On Saturdays, no matter where he is, he visits one of his stores. He tries to take it easy on Sundays, but he also keeps a close eye on competitors, bigger and stronger than ever.
Outside of family and work, there doesn't seem to be much time for anything else, though he has some set-aside sure things: He spends every July in his family home on the Greek island of Mykonos, and every New Year's in his apartment on South Beach.
It's been hard for him to fulfill commitments to a couple civic groups such as the Georgetown Business and Professional Association and AHEPA, an organization dedicated to the promotion of Greek-American heritage. He's out of town every other week.
"The work ethic exists because I've never been afraid of working very hard," he says. "I don't know where that comes from. I think it's inside."