This is what happens when you go into business with your spouse
Managing a company with your mate is not easy. If the business is struggling, that can damage your relationship. If the relationship is struggling, that can damage the business. And even if the company is thriving, the marriage can fall apart – in an ugly way.
That was underscored with the latest chapter in the sad saga of Tory and Chris Burch. In 2004, the then-married couple founded Tory Burch. And while it grew into a global fashion brand, its two founders divorced – and at one point, became competitors.
After the fact, it may be easy to spot the signs of trouble in the relationship or business (or both). But usually, couples who run companies together are figuring it out as they go along. The key to success: Setting clear boundaries between work and home, and communicating openly when there’s a problem. “Be really explicit [about] what’s allowed to spill over and what’s not,” says Nancy Rothbard, Professor of Management at The Wharton School of the University of Pennsylvania.
Here are seven famous examples of brands created by couples – and what happened after.
Chris and Tory Burch
In 2004, Chris Burch, a successful entrepreneur and investor, helped his wife Tory open the first Tory Burch retail store. By 2006, the couple had divorced. In 2011, the relationship took a strange turn when Chris debuted C. Wonder, a clothing line viewed as so similar to the Tory Burch brand that his business was dubbed a "revenge retail company." A legal battle between Chris and Tory ensued.
Telling quote: In 2012, Chris told Vanity Fair, "[Tory Burch] never could have existed without me, and it never could have existed without Tory." Some Tory Burch company representatives disputed that account, saying that Chris was not involved in day-to-day operations.
The upshot: Tory and Chris announced a settlement of their legal battles in December 2012. The privately-held Tory Burch company is hugely successful and has been estimated to be worth more than $3 billion. Earlier this month, BuzzFeed reported that Chris was shutting down C. Wonder, but he's still pursuing another venture with comedienne Ellen DeGeneres. Together, they're launching her new fashion line, E.D.
Kate and Andy Spade
Kate wasn’t even officially a Spade when she and then-fiancé Andy nationally launched their iconic handbag line, Kate Spade, in 1993. In 1996, Andy left his full-time job and the next year, the couple sold their first men’s bag in their new line, Jack Spade. In 1999, the couple sold a 56% stake to Neiman Marcus for $33.6 million.
Telling quote: "I think what we made the mistake of doing early on was taking every opportunity alone to talk about the business, at dinner, driving the car, you know at home brushing your teeth, as you're getting into bed, as you're waking up, and I think we made a conscious effort to not do that because I think it was just, you know, it would burn us out," Kate told CNN in 2002.
The upshot: In 2006, when the company was pulling in $84 million in sales, they sold to Liz Claiborne, now renamed Kate Spade & Company (KATE). They worked at the brand until 2007. After leaving, Andy went on to open Partners & Spade, a New York City-based branding firm, while Kate became an at-home mom.
Doug Tompkins and Susie Tompkins Buell
Though founded by Susie Tompkins Buell and a friend in San Francisco in 1968 under a different name, Esprit was soon also led by her husband Doug, after he sold his own clothing company, North Face. The once-successful line and the marriage both began having serious troubles in the mid-1980s, chronicled by SF Weekly. While the couple divorced in 1989, the business’ drama took years to unfold. One minute Doug was leading the company, the next Susie.
Telling quote: "Both Doug and Susie had very strong visions, but some of the synergy had fallen away, so it did make it more difficult," a former employee told SF Weekly. "It was more difficult because people knew there was internal conflict."
The upshot: Lawsuits and takeovers moved faster than the products. These days, the publicly traded Esprit Holdings is based in Hong Kong and Germany, and in 2011, the company said in a filing, "The brand has gradually lost its soul over the past few years."
Burt Shavitz and Roxanne Quimby
Originally a photographer, Burt Shavitz started beekeeping and selling his honey after leaving New York City for upstate in 1970. But it wasn’t until he picked up then-hitchhiker Roxanne Quimby in 1984 that the business really took off. By 1993, the company had $3 million in sales, but the couple's relationship – business and personal – dissolved when Roxanne caught him in an affair.
Telling quote: Burt told The Daily Beast in 2013 that when Quimby discovered his affair, she played hardball. “She consulted a lawyer and put the paper on a desk and said, ‘There! Take it or leave it!” I had no one to turn to for guidance, so I signed it. I went one way and she went another."
The upshot: He ended up selling his one-third share of the company for 50 acres of land and a home, worth only $130,000, according to The New York Times. In 2000, AEA Investors bought 80 percent of the company, paying Quimby $141.6 million, making Shavitz’s share, had he still owned it, worth about $59 million, according to the Times. Shavitz, the report said, was able to get $4 million more from Quimby and still gets paid an undisclosed sum each year for the use of his image. In 2007, Burt's Bees was bought by the Clorox Company (CLX).
Andrew and Peggy Cherng
If any restaurant chain embodies the American dream, it’s Chinese chain Panda Express. Co-CEOs Andrew and Peggy Cherng immigrated to the U.S. (he from China and she from Burma), met in college, got married, and became billionaires. Their empire started in 1973, when Andrew opened the Panda Inn with $60,000 of savings, a small business loan, and free labor from family members.
In 1975, the two wed, and when Andrew opened his second restaurant in 1982, Peggy left her engineering job and joined the business.
Telling quote: In 2013, Peggy told Fortune, "We had to learn how to resolve business disagreements. It’s not 'Your way is best' or 'My way is best,' but the alternative way — which incorporates everybody’s ideas — is best."
The upshot: The privately-held company had $2.2 billion in revenue last year, according to the Los Angeles Times.
Sandy Lerner and Leonard Bosack
Sandy Lerner co-founded technology giant Cisco Systems in 1984 with her then-husband Leonard Bosack. After the two designed their breakthrough invention — a router that connects computer networks — and spent six years building the company, Lerner was fired by its board of directors in 1990, the same year Cisco went public. Bosack resigned alongside her, but the emotional damage, apparently, had been done. The couple later divorced.
Telling quote: In a 2013 speech, Lerner advised the women in the audience, "You are not the company, and the company is not you.” Her experience with Cisco "broke up my marriage and broke up my health. I was an emotional basket case."
Upshot: When they left the company, Lerner and Bosack sold their two-thirds stake for $170 million. Lerner went on to create the nail polish brand Urban Decay, which she then sold to LVMH. It is now owned by L'Oreal. Leonard is reportedly retired.
Sharon and Kip Tindell
Sharon Tindell wasn't a cofounder of her husband's mega-business, The Container Store (TCS). But since starting behind a register in the 70s, she found her passion in the store's inventory. Now the Chief Merchandising Officer, Tindell has become an integral part of company operations. (Her husband, Kip, is the CEO). And the company, she says, has become a big part of their marriage.
Telling quote: "I can't say it's always been smooth," Sharon told Fortune in December, "but [Kip and I] are like-minded in our values. If we have a disagreement, we can intellectualize it, so we can get the emotions out of it and get to the right place."
Upshot: In 2013, The Container Store went public, and it continues to expand. It has been on Fortune's Best Companies to Work list 15 years in a row.
Watch more about businesses owned by husband and wife from Fortune's video team: