Editor’s Note-Fallen Castles

Editor’s Note-Fallen Castles

Faced with disagreeable circumstances of our own making, we determine that they are inevitable, desirable, or someone else’s fault.

In The Beautiful and Damned, F. Scott Fitzgerald’s second novel, young Anthony and Gloria Patch find their “opalescent dreams of future pleasure” dissolving as their fortune shrinks.

The situation is partly circumstantial, but predominantly self-inflicted. In a period of post–World War I inflation, the Patches are living above their means on income from Anthony’s bonds and other investments. Anthony wishes to be “gracefully idle” as he and Gloria wait for his wealthy grandfather to die. He is therefore unwilling to take employment.

He believes, you see, that “traits which we call fine—courage and honor and beauty and all of that sort of thing—can best be developed in a favorable environment.” He fancies that he might become a great writer, and at times he writes. More often, he stumbles from one drunken fiasco to another, “and every other month they sold a bond, yet when the bills were paid it left only enough to be gulped down hungrily by their current expenses.”

At one point, the Patches allow their inability to afford a gray squirrel coat for Gloria to stand as a totem of their financial anxieties. To cheer themselves up, they hold a “prolonged, hysterical party.” Gloria’s “heart was very bitter” after realizing that the price of the party was “twice what the gray squirrel coat would have cost.”

It’s a cliché that no one feels quite as poor as a multimillionaire down to his last million, but anyone whose personal worth has risen and then plummeted knows something of Gloria’s dismay. So do countless people who’ve felt the wind hit the sails—the exhilaration of possibility—just before the hull hit the rocks. Certainly Stu Utgaard, the subject of this month’s feature story by Jack Gordon, knows this feeling.

Utgaard is no Anthony Patch. No one could fault his work ethic or claim that he lacked ambition. He grew up in a farmhouse, earned two degrees, learned the mergers-and-acquisitions business, started his own M&A brokerage, and became one of the nation’s top dealmakers—at the same time that he grew his family’s poultry hatchery twentyfold and personally spent every Sunday washing hatchery equipment, boxing chicks, and sending out invoices.

Then, in 1996, he bought a 36-employee retail business that he renamed Sportsman’s Warehouse. In the next three years, he doubled the company’s sales. By 2004, the company had 30 stores and revenues of $293 million; by 2009, 67 stores and revenues of $718 million. There was also a company Learjet 60 and some $464 million in debt owed to a variety of creditors, in large part because of Utgaard’s talent for securing financing. Meanwhile, sales had dived in the recessionary second half of 2008.

In March 2009, Sportsman’s Warehouse declared itself bankrupt. Utgaard lost his stake in the company—for which he had been offered $264 million—and the $2 million that he personally had invested in it. He also lost a home in Utah and his family’s farmland in Wisconsin. Declaring personal bankruptcy was unavoidable. On March 10, 2009, he realized that all of his credit cards were “maxed out” and that he had less than a dollar in cash. And then? Utgaard says, “I surveyed the canned goods in my kitchen cupboards.”

Psychologists say that when we are faced with disagreeable circumstances of our own making, we find ways to demonstrate—to ourselves, if not to others—that they are either inevitable, desirable, or the fault of someone else. Gloria Patch believed that “the shrinkage of their income was a remarkable phenomenon, without explanation or precedent. That it could happen at all within the space of five years seemed almost an intended cruelty, conceived and executed by a sardonic God.”

Utgaard blames himself. Yes, he acknowledges, the recession and the financial crisis of the past two years contributed to the decline of his company. But in The Sportsman’s Warehouse Story, his recently released book about his experiences as a retailer, he says that the company’s demise was caused primarily by “my poor decisions.”

“As a result of my poor decisions,” he writes, “our family lost the wealth we worked so hard to create. Two thousand dedicated and hard- working people lost jobs. [Suppliers] lost approximately $66 million [and] 26 landlords lost annual rental streams of more than $16 million . . . . Subordinated-debt holders lost 85 percent of their investments.”

It’s a choice implicit with agony: to blame fate or blame oneself? The former is tempting. But only by blaming himself can Utgaard conclude, as he does in his book, that although he is “broke and jobless, things can only go up from here.” It’s by accepting responsibility that he regains the optimism required to move forward.

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