Loose Threads : Cross Colours was once the clothing label of choice for the hip hop crowd. But the company’s unraveling was as dramatic as its overnight success.

So in love, so much in love . . . .” The sound system at Dejaiz is pumping All-4-One’s silken remake out into the halls of the Fox Hills Mall, reeling in young African Americans in the mood for Hugo Boss and Guess? and Perry Ellis and Calvin Klein. At the back of the store, assistant manager Devin Smith is rummaging through a round-rack of marked-down T-shirts. “Two years ago kids were running in here saying, ‘You got any Cross Colours?’ ”

Smith finds what he’s looking for: an X-large T-shirt emblazoned with the Cross Colours logo--yellow (“for the sun”), red (“for the blood of the people”), green (“for the earth”) and black (“for the color of our skin”). It looks like an African tribal banner when he holds it up. You remember Cross Colours? Hooded sweats, baggy knee-length shorts and sueded denims printed with phrases like “Stop D Violence” and “Educate to Elevate” and “Clothing Without Prejudice.” It was everywhere in 1992 and so were its owners, Carl Jones, who was responsible for the concept, and T.J. Walker, who was responsible for the design.

Autumn, 1990, was a dicey time to start a business in Los Angeles. Real estate was contracting. The Gulf War loomed. The whole world was watching CNN and holding its breath the day Jones and Walker started Cross Colours out of Jones’ house in the Hollywood Hills. Less than a year later, the company had shipped $15 million worth of orders and was employing 75 workers in a 30,000-square-foot office and warehouse in Vernon.

Until they came along, no one had ever mass-produced African American teen fashion. They saw a market no one else had--young black America and its many wanna-bes--and went for it. But Carl Jones and T.J. Walker were more than just fashion’s latest flashes.

“Crafted with pride in South-Central Los Angeles,” their promo materials boasted. Jones and Walker put their own pictures on their hangtags, so, Jones told a Los Angeles Times reporter that year, “that people would know what we look like. We weren’t afraid to say we’re black and design for black people.”

In 1992, Jones and Walker were becoming culture heroes. “It happened right when it was cool to be black and MTV was first playing rap,” says Eric Wical, a former merchandise manager for Merry-Go-Round, one of the nation’s leading clothing chains. “I’ve never seen such a lineup of stars.”

Arsenio Hall did his show in Cross Colours. Preteen rappers Kris Kross wore oversize Cross Colours backwards on MTV. Cross Colours dressed veterans like Stevie Wonder and newcomers like Heavy D and Mary J. Blige. At the Grammys, Parliament-Funkadelic looked dipped in Cross Colours. One day, Paula Abdul would pay Cross Colours a visit. The next day it would be Shaquille O’Neal. “It was like rock ‘n’ roll combined with the garment business,” one former executive remembers fondly.

Cross Colours was the model of a progressive company. Women were in prominent, well-paying, decision-making positions. The work force was probably the most integrated in the business. Jones and Walker hired inner-city teen-agers who promised to wean themselves from drugs and gangs. They put on a benefit with KPWR, L.A.’s leading urban music station, that raised $50,000 for job training. They gave $200,000 in clothes to the Common Ground Foundation, a dropout prevention program in Watts.

They opened “Red, Black and Green” warehouse stores in Pomona, Compton and Downtown. Their store next to Larry Parkers diner in Beverly Hills was Jones’ prototype for an “urban Gap” chain. In December, 1992, Cross Colours moved again, this time to 150,000 square feet in the City of Commerce. By now there were around 300 employees.

In an article in the California Apparel News, the bible of the West Coast garment business, Jones predicted that Cross Colours would book $100 million in women’s line orders alone from Merry-Go-Round in 1992. That same month, Cross Colours surpassed Williwear as the largest African-American-owned business in the industry.

In 1993, Black Enterprise magazine named Threads 4 Life, Cross Colours’ parent corporation, its “Company of the Year” and placed it 10th on the magazine’s list of 100 top black firms, ahead of Black Entertainment Television and the parent company of Essence magazine. In 1994, Fortune magazine wrote that Jones and Walker were among “America’s smartest young entrepreneurs.”

Today, Cross Colours has all but disappeared, its manufacturing and warehousing operation shuttered, its vast staff a thing of the past. Creditors, including the Bank of New York and L.A.’s Imperial Bank, are picking over the bones. According to Ben Siegel, an attorney involved in the process, secured creditors might see a return of 50 cents or less on the dollar.

“Failures are common in the apparel industry, but not as high profile as this,” says Wical, “not with these extremes of success and failure.” In three years, a company that had captured the imagination of the industry and embodied the best hopes of a community went from start-up to $80 million in sales to liquidation.

CARL JONES AND T.J. WALKER ARE HARD AT WORK IN a quiet design studio in the heart of that great swatch of garment businesses that spreads south from Downtown. Their nearly identical Range Rovers are parked next to each other in a gated lot. A set of heavy Victorian couches covered in deep, rich purple and red-gold velour are among the few mementos of Cross Colours’ glory years. An old James Brown tune, “It’s a New Day,” is playing softly somewhere as they greet their visitor in a small office. Samples of their new lines hang on the walls.

Jones, now 40, looks preppy in a button-down broadcloth shirt, polished black loafers and white socks. His hair is touched with gray. He’s a charmer, a soft-spoken, natural-born salesman. Walker is courtly in an old-fashioned Southern way, but guarded. He lets Jones do most of the talking.

Jones is philosophical about Cross Colours’ reversals. “What happened to us happens to a lot of fast-growing companies in this industry,” he insists, citing the recent spectacular crash-and-burn of avant-garde New York designer Stephen Sprouse. He says it’s unlikely he’ll ever go back into production. “Now we’re a design company. That’s what we do best.”

Jones grew up in Watts. “The riots in ’65 happened literally outside my back door.” He got his drive, he says, from his dad, an ambitious man who worked as a mechanic, ran an auto parts store and sold used cars. (He was murdered in a robbery in 1983.) The family wasn’t rich, but his mom made sure he and his brother and sister always had food on the table, clean clothes on their backs and a positive attitude. “I always thought I’d be successful if I applied myself and stayed with it. I always wanted to own nice things.” As soon as the family could afford to, they moved to Inglewood.

Jones says art led him to fashion. “I was always intrigued with the business of it, with designers who had their own companies like Calvin Klein, Ralph Lauren and Bob Mackie.” While attending El Camino Community College in 1980, he took a home economics class and started making dresses. “My dad thought I was crazy. He thought I had become gay.”

In 1982, after graduating from L.A. Trade Tech, Jones opened a small business, silk-screening socks, T-shirts and other garments. “I’d take my little briefcase and knock on doors and sell ‘em samples.” Surf wear, which is graphics-heavy, was happening at the time, so that’s what he did, designing for Guess? (where he met his wife, Audrey), i.d. and Ocean Pacific. In 1985, as his business started to grow, Jones advertised for a new graphic artist.

Walker was living in his car when he answered Jones’ ad. They’ve worked together ever since. Slight, almost frail-looking, Walker comes from a big Mississippi farm family. After studying graphic design and printmaking at Louisiana Tech, he came to California, he says, because it was warm.

In 1986, Jones and Walker hooked up with a Moroccan-born, French-Canadian garment manufacturer named Orly Dahan. Together they created Surf Fetish, producing hard-core designs for the landlocked masses. After beachwear played out, Surf Fetish added skateboarding. After that it was biker wear.

“Carl went through phases with us,” Dahan recalls. “When I first knew him, he would dress every day like a beach bum--white shirt and white pants. He brought a Bronco to carry his surfboard. Then he turned to skateboarding. He pierced his ear, wore Vision Street Wear--only black--and skulls. Then motorcycles started happening. He buys one Harley, two Harleys, three Harleys, four Harleys. He had really, really beautiful bikes. Then he buys a Range Rover to pull his motorcycles. He wanted to buy a Harley franchise! He rode with actors, producers, trendy people. He gets so involved in his character. But his character would change.”

In 1989, says Dahan, Jones and Walker became interested in what the trade calls ethnic clothing, which means product for inner-city stores. That year, Bobby Brown’s “Every Little Step” was in heavy rotation on MTV. According to Dahan, his wife took a look at Brown in harem pants on the video, the crotch down to his knees, and said: “We can do that.” They formed a new label called Fetish Blues to make the pants and, in Dahan’s words, “they blew out of the stores.”

Several million dollars in orders came from Merry-Go-Round, a 1,400-store chain that became a major force in young men’s clothing in the late ‘80s. It tripled in size by “spotting new trends early and jumping on them big-time,” says Wical, and by taking over chains like Dejaiz, which had inner-city leases, and Chess King.

Intrigued by the success of the harem pants, Jones and Walker began visiting stores in Los Angeles and New York, seeing what was selling. They looked at what filmmaker Spike Lee was doing with his Spike’s Joint stores, which sell clothing and movie souvenirs. Walker even designed the label for Lee’s line of clothes.

When Orly Dahan talks about Carl Jones, there’s a shiver of awe in his voice--a tone often reserved for those who have hit pay dirt. “Eventually, Jones understood one thing,” says Dahan, “that he was an African American.” Jones split from Dahan in October, 1990, to start his own company, taking Walker and others along. Dahan, now vice president of the Fetish Group, an L.A.-based clothing company, says there are no hard feelings now. “I thought it was a great idea. He saw the opportunity and did what he had to do: He lived his clothing. There was no blacker person in the world when he was doing Cross Colours than Carl Jones,” he says. “There was no whiter person than him when he was doing surf.”

Jones and Walker knew they had only a few months to design their first collection and manufacture samples for MAGIC, the men’s apparel show at the Las Vegas Convention Center. The spring show, when manufacturers preview their new lines and stores are looking for back-to-school fashions, is the year’s biggest buy.

“We didn’t have any idea what we were going to do,” Walker recalls. They got a $175,000 bank loan but that didn’t go far. “I had a Ferrari,” Jones says. “I sold it. I had a collection of motorcycles. I sold them.” Ultimately, Jones financed the new line with his American Express card.

Just a few days before the show, Walker and Jones finished their first collection: jeans covered in graffiti-print; T-shirts silk-screened with images of African masks; overalls with an inch-wide tape of Kente cloth down the side seam. “We had panic days,” Jones recalls. “We thought maybe we’d hyped ourselves.” They called a white woman they knew who bought for Bullock’s. “Was it too ethnic?” they worried. “Would you buy it?”

“Don’t worry,” she assured them. “It’s really cool stuff.”

Cross Colours came up with its slogan, “Clothing Without Prejudice”--which was plastered on T-shirts, posters and hang-tags--because, Jones explains, “we wanted everybody to buy it.”

Just about everybody did. Cross Colours, the only black-owned company in the Convention Center, took $5 million in orders--including $1.5 million from Merry-Go-Round--in four days, Jones says.

DEBORAH PALMER IS STRIKING--A 6’2” BLOND aerobics instructor with the sinewy shoulders of someone who rowed in a college crew. She’s also a men’s clothing designer and a self-described “rap maniac” whose walls are covered with African masks from the collection of her mother, who is half African American. She went to work for Cross Colours just before the ’91 MAGIC show.

“The hype was already building,” she recalls. “You felt like you were in the middle of a whirlwind.” Titles meant almost nothing at Cross Colours--no one had a job description and Jones frequently proffered and withdrew titles the same day--but over the next 2 1/2 years, Palmer served as vice president of production and operations, then vice president of sales and merchandising. “There was a really great street energy. Every idea was valued--no matter whether you were white, black, yellow--because nobody knew where it was going.”

Colette Bailey, an African American from the West Side partial to Doc Martens and heavy metal, was a production assistant for Pepe jeans, but “wanted the opportunity to work for a black-owned company.” She became manager of Cross Colours’ children’s division, which ended up among its most profitable. She was also at various times the division’s chief designer, merchandiser and production manager. “The working conditions were so bad,” she shakes her head ruefully. The roof leaked so badly “you had to wear rubber-soled shoes when it rained.”

In the beginning, there was no floor plan, no planning of any kind. Departments would spring up everywhere. “We’d set up a computer terminal,” says Palmer, “and suddenly a 15-person department would grow up around it.” Jones didn’t even have a desk. “He’d sit in the lobby and be on the phone,” says Bailey. “You’d come in and he’d be working at your desk.” Every office had its own radio.

Everyone was in their 20s and 30s. It went without saying, but everyone worked Saturdays because Jones and Walker always worked Saturdays. You partied with people from Cross Colours. You lived with people from Cross Colours. They were your family.

“It wasn’t a job,” Palmer laughs, “it was an adventure. When you first started working there, you thought, ‘My God, this is the most fun I’ve ever had in my life.’ You were just on an adrenaline high all day long.”

In 1991, Karl Kani was 23 years old and had been in Los Angeles for a year, selling his intricately decorated jeans out of his Hollywood apartment, shipping them to stores back in Brooklyn that specialized in black fashion. Within a month of meeting Jones, Kani was working out of Cross Colours’ headquarters in the City of Commerce.

Threads 4 Life was soon distributing the Karl Kani line: baggy jeans in orange and jade, color-coordinated T-shirts and baseball caps--everything stamped with “Karl Kani” on it blew out of the stores, too. At the 1992 MAGIC show, Jones says, Kani’s line did close to $6 million in sales.

Looking back, that show might have been Cross Colours at its most hyped. Public Enemy’s “Fear of a Black Planet” boiled from the turntables in the Cross Colours booth. “It was so loud the golf clothes manufacturer in the next booth couldn’t even hear to take orders,” remembers Scott Sigman, a former vice president of production who now holds the same job for Cherokee sportswear. “You couldn’t even get into our booth to buy anything unless you were on the guest list.”

“The aisles around our booth were so packed, the fire department threatened to come in and force everybody to disperse,” Bailey recalls, still amazed. “I would walk the show with T.J. and people would yell out, ‘I want to work for you! I want to work for you!’ I had never seen people act that way around clothes before.”

By the end of the first day, Cross Colours had $10 million in orders. By week’s end, $40 million. Everything Jones and Walker touched seemed to turn into cash.

In 1992, the 1,500-showroom CaliforniaMart, the largest wholesale apparel center in the world, voted Cross Colours its “Rising Star” award for West Coast menswear companies less than 2 years old.

But, according to Deborah Palmer, problems had begun to surface. At the end of 1991, she says, “Carl and T.J. just had (litigation) coming out of their ears from Spike Lee,” who accused Walker and Cross Colours of knocking off his company logo.

The case was settled out of court. According to a representative of Lee’s company, Jones agreed to change the name of Cross Colours’ parent company from “Solo Joint”--it was too similar to “Spike’s Joint”--and to refrain from using certain phrases identified with Lee--”Mo’ Fun” and “YA-DIG SHO-ENUFF?” on the labels.

In the long run, what probably hurt Cross Colours most was that the settlement allowed only a very limited time in which to use up the 150,000 labels in its inventory. It destroyed some of them, but it also “massively overproduced garments just to use up the labels,” says Palmer, who by that time was Cross Colours’ vice president of production. As a result, retailers for the first time began to return the company’s clothes.

The company won another “Rising Star” award in early ’93. This time, however, Jones and Walker didn’t show up for the ceremony. They later apologized, saying they had been unavoidably detained by negotiations with Earvin (Magic) Johnson. A week later, in an article in the California Apparel News, Jones announced that the former basketball star had purchased an interest in Cross Colours, would become a full-time member of the organization and promote all Cross Colours products, including proposed lines of Magic Johnson sportswear and shoes. Profits from the collaboration would fund AIDS education, prevention and research.

The only trouble with Jones’ announcement, says Lon Rosen, Johnson’s agent, was that a contract had never been signed. “Earvin liked Carl Jones and wanted to help a black-owned company, but it just wasn’t a direction he wanted to go in. The numbers were not what we expected.”

Those numbers would have been better had it not been for bootlegging, which had long been a problem for Cross Colours. Jones estimates that as many as half the clothes sold with a Cross Colours label were counterfeits. His worries came to a head at the 1993 MAGIC. Long after publication of the convention register, which told buyers where sales rooms were located, Jones decided to move Cross Colours’ booth off the main floor and into two side rooms, where, he was convinced, it would be easier to keep track of industrial spies. “Nobody knew where we were,” recalls Sigman, the former vice president of production. “We had to switch around everyone’s appointments.”

Making matters worse, the truck bringing the samples to Las Vegas broke down, so the new clothes arrived a day and a half late. When they finally did, Cross Colours salespeople, who had never been shown the new line, went into shock.

Cross Colours’ trademark reds, blacks, greens and yellows had been phased out. The new lines featured darker washes in predominantly earth tones. Everything was less baggy, less flamboyant, less . . . well, Cross Colours. “The line had to become more sophisticated,” Jones argues, “because the customer was becoming more sophisticated.”

The salespeople responded that they didn’t know how to sell the stuff. Even the music in the Cross Colours booth that year had lost its edge--acid jazz and A Tribe Called Quest with their soft-boy rap, “I Left My Wallet in El Segundo.” Some say buyers left their wallets in their pockets; Jones says that sales exceeded $50 million.

Jones concedes that Cross Colours frequently had difficulty delivering orders on time and in full, but by now things were getting worse. “Promises were made, but promises were never kept,” says a bitter Eric Wical. Now at Abercrombie & Fitch, Wical says Cross Colours delivered half of what it had promised Merry-Go-Round so frequently that he began to order twice as much as he needed. According to Wical, Cross Colours even blew its Merry-Go-Round back-to-school delivery, traditionally the biggest sales period of the year.

One of the main reasons for the slow deliveries, says a garment industry veteran who went to work at Cross Colours in the summer of ‘93, was that the company owed money to many of its suppliers. “We couldn’t get fabrics in without paying cash,” she says. “One sewing contractor said he was holding 20,000 T-shirts until we paid him, and nobody even knew who he was.”

Jones was still telling the media as late as spring ’93 that Cross Colours expected total sales that year of $160 million. At the same time, Cross Colours began selling its returns for cash to a jobber who in turn sold the clothes to discount outlets. Cross Colours retailers began to find themselves in competition with stores selling the same clothes at half the price.

In the summer of 1993, the Merry-Go-Round chain, which, according to the New York Times, accounted for about 60% of Cross Colours’ revenue, was itself sliding into Chapter 11. Cross Colours had to start laying people off. “Every other Friday was Black Friday because nobody knew who was being let go,” says Deborah Palmer.

“Carl called a group of us into the showroom and said everything was all right,” another ex-employee says. “Nobody had to worry about their job. That afternoon we were let go.” When she went in to say goodby to Jones and Walker, they were already gone.

Palmer says she and Sigman called it quits the same day.

Former employees complain that the more people Cross Colours laid off, the more new cars Jones seemed to acquire. Jones’ wife got a new Jaguar convertible. Jones himself alternated between new red and black Ferraris as he laid off four to 15 people a week. One former client says Jones told him that he’d traded Cross Colours fabric for a Rolls-Royce. “He’s got two Testarossas and a Corniche and I’m trying to hold off contractors,” Sigman remembers with disgust.

Jones responds: “Buying and selling cars has always been a hobby of mine. It had no effect financially on Threads 4 Life. Some employees confused business and personal.”

Jones had turned company security over to Nation of Islam guards, but as financial pressures mounted, he decided he could no longer afford them. One of the guards, who had done security for Cross Colours before the Muslim group took over, offered to do the job for considerably less.

Soon after that, several sources say the Nation of Islam guards showed up in force one day, closing the loading dock doors and sealing off the exits. “People were running for their cars,” remembers Colette Bailey. Another witness says the guards accused Jones of breaching their contract and demanded $70,000 in severance pay. Jones would not confirm the amount but says he did pay them in full. Cross Colours’ new financial vice president, who just a week prior had come in at the behest of an increasingly nervous Bank of New York, resigned soon after.

By the end of the year, Cross Colours was down to fewer than 20 employees.

BUILT LIKE A BOXER, A GOLD crown on a front tooth, Karl Kani seems to swagger even as he sits, sucking on a toothpick and answering questions in his loft on a busy L.A. street south of Downtown. Action swirls around him as employees prepare a shipment for a show in Miami. Kani stayed with Cross Colours until almost the bitter end. But now Kani has his trademark back, and his own company, Karl Kani Infinity, which claims sales of $68 million in 1993.

He has emerged as a competitor--some would even say successor--to Cross Colours. “You need to be out there seeing what’s happening-- tellin’ people what’s happening.” Kani pauses to inspect his toothpick. “People from the streets say Carl Jones ain’t down no more.”

And the black press seems to agree: In a feature on “ghetto chic” in the April issue of Quincy Jones’ hip-hop magazine, Vibe, Cross Colours is never mentioned.

Jones shrugs off the criticism. “I like to think that I am a sensitive person. But does it upset me? No. It’s business. I chose this business, chose my path, and there are circumstances that go along with it. Sometimes great, sometimes bad. It’s part of it; especially in the apparel business, there are problems every day.”

Like “garmentos” everywhere, he is anxious to promote his new line. Gone are the baggy pants, the screaming colors, the bold graphics. The colors are muted in earthen tones in materials like herring-bone tweed. Pullovers with a bellows pocket in the middle of the chest would seem to be Cross Colours’ new signature. “The line is still urban because that’s where it comes from,” Jones says. “It’s cleaner, the colors calmer, more natural. The line looks more rugged and it’s a little more expensive than yesterday’s.”

Jones says the clothes will be available soon at Macy’s New York, Foot Locker and at Merry-Go-Round (newly emergent from bankruptcy), as well as at stores on the Howard University campus in Washington and Dr. J’s in Harlem and Brooklyn.

He insists that he and Walker “are happier today. We’re able to get in the studio and really design. . . . It’s not like T.J. and I got lucky. We can still make hit records. T.J. and I are still showing, producing and manufacturing--indirectly--the Cross Colours label.”

Whether or not they still own the Cross Colours trademark--some say a creditor took possession of it--is a subject of much speculation upon which Jones refuses to comment.

It’s impossible to know what Carl Jones is really thinking. Is he just trying to put a happy face on a grim situation, or, as many suggest, is he so shellshocked that he doesn’t quite understand what’s going on? Maybe he’s simply following the cardinal rule of salesmanship: Sell yourself first. Scott Sigman says Jones called him recently to hype Cross Colours’ new line. “I haven’t been this excited,” Jones enthused, “in over a year.”

He remains proud of what Cross Colours accomplished. “If I thought they had the drive and would bust their ass for the company, we gave a lot of African Americans an opportunity.” People were able to advance faster and further at Cross Colours, he maintains, than they ever would at any other company.

In their new studio, Jones’ and Walker’s desks face each other, about 15 feet apart. Jones says he likes it that way. When they were in the City of Commerce, he says, it would take 10 minutes for him to walk to T.J.’s office. All of Cross Colours’ brilliant press from the early ‘90s is framed and leaning against the walls.

The only prominent decoration in the room is above Jones’ desk--a yellow autographed Andy Warhol T-shirt encased in plastic. Warhol signed it for him, Jones says, and he has kept it with him in every office “for good luck.” It’s impossible not to think of Warhol’s remark about being famous for 15 minutes.

“All I can say is we’re going forward and we’re going to do it a lot more carefully,” Jones says. But, he admits, “We’re not naive. We know today you’re hot, and tomorrow you’re dead.”