THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, January 23, 1995 TAG: 9501210021
SECTION: DAILY BREAK PAGE: E1 EDITION: FINAL
SOURCE: BY PAM STARR, STAFF WRITER
LENGTH: Long : 187 lines
A BEAT-UP 1979 Chevy station wagon that cost $600 is a bittersweet reminder to two Ukrainian immigrants of how far they have come, and how far they want to go.
These days, the old bomb shares space with a Lincoln Town Car and a Chevy Country Coach outside a modest duplex on 85th Street in Virginia Beach. Inside is the headquarters of Joint Venture Consultants, Ltd., a tiny but growing import-export company founded by Alexei Savostyanov and Sasha Krilov in 1992.
But it's the old, brown station wagon that retains the place of honor - the first gravel spot on the right-hand side of the crowded Oceanfront street.
Savostyanov says he will never part with his first American car, a reliable eyesore that carried him to odd jobs in construction and landscaping when he started out.
``I lived in that car for a couple of weeks. It was working for me,'' says blond-haired Savostyanov with a chuckle. ``It's like my baby. I am going to keep it.''
They are unlikely entrepreneurs. For starters, neither had any business education or experience. Krilov, 6-foot-6, was a medical doctor in Russia and then a professional basketball player in Israel before emigrating in 1992. The 6-4 Savostyanov taught English in Kiev, Ukraine's capital, until
But what they lacked in business acumen they made up for in perseverance and hard work. Eighteen months ago, they hit the jackpot. Joint Venture Consultants Ltd. became the exclusive distributor of New Balance Athletic Shoes Inc. to the Ukraine and Moldova. Currently, they represent seven American companies, marketing everything from martial arts and boxing equipment to leather goods, nutritional supplements and electronic supplies.
Savostyanov and Krilov opened a New Balance-only store in downtown Kiev and have sold thousands upon thousands of athletic shoes in the former communist country. Last month they signed a three-year contract with New Balance and expect to sell more than $1 million worth of shoes next year.
But that's just the beginning.
These guys have a serious game plan. They want to build a huge sports-equipment store in Kiev, much like a Sports Authority. They're negotiating for a Ukrainian franchise with Gold's Gym, and want to supply much-needed pharmaceuticals to several Russian countries. Last month, the company received a license from the bureau of Alcohol, Tobacco and Firearms, giving it permission to import Ukrainian wine and beer. The Ukrainian government is also using them to obtain diphtheria vaccines.
The timing, Savostyanov says, is perfect, both for the company and the people of the Ukraine. Had communism not collapsed in 1991, there would have been no need for an export company specializing in the Ukraine, a former republic of the Soviet Union that borders the Black Sea and Russia, and is the second largest country in Europe.
``We have so many connections there - we know everybody,'' says Savostyanov, president of the company. Krilov is vice president. ``People have a taste of freedom, a taste of capitalism, and they want American-made products.''
The new democracies have welcomed Western businesses and products, but the majority of Americans who want to export their goods run into cultural problems, Savostyanov adds. Basically, Americans don't know diddly about how to deal with the Russians.
Bo might know shoes, but he doesn't know Russians.
``Three years ago I was asking myself, `Why was it so difficult for Americans to do business with Russians?' '' says the regal-looking Savostyanov, who refers to himself and Krilov as Russian, although they both hail from the Ukraine. ``The Russian mentality is different. I thought it was a good idea for us to consult people going into business ventures there - we could interpret, escort them to Russia, help them get in.''
New Balance could have never made it past the first checkpoint without the help of savvy, Russian-talking businessmen who know their way around the country, agrees Rick DiMarzo.
He's the export sales manager of Boston-based, privately held New Balance and says that Savostyanov and Krilov have done a fantastic job selling shoes in the Ukraine.
DiMarzo tried the men out with two shipments, to see if they could do what they promised. He was not disappointed.
``They are very honest, very dedicated and two of the nicest guys you could ever meet,'' says DiMarzo. ``They've created a consumer want over there. . . them.''
Adidas, Reebok and Nike outsell New Balance in the former communist countries, DiMarzo admits, but he says that the Ukrainian people ``identify us as an American brand.''
``In the Ukraine we're doing very well,'' he adds. ``I have big plans for the Ukraine - thanks to Sasha and Alex.''
To be fair, the men had an upper hand in the export business all along. Most of their start-up financing came from several Ukrainian friends who own a conglomerate of successful businesses called Mariam and are eager to sell American-made goods. Crestar Bank loaned the rest. The American label, says Krilov, sells much easier than others.
``People in Russia believe that everything made in the U.S. is good quality,'' Krilov says in his deep, heavily accented voice. ``I believe it, too. It makes us feel good to know that we never sold them a thing that's not made in the U.S.''
Oleg Korban agrees with Krilov. He is an owner in Mariam and visits his friends every three months or so with co-owners Sergei Ruban and Vitaly Khomenko. Their company, created in 1991 with five employees, now employs 1,500 people and grossed $31 million last year.
Their Virginia Beach connection definitely helps, says Korban, and they're now looking for more American financial backers to invest in their company, to help them expand even further.
``We did try to deal with American companies two years ago,'' Korban says through translator Savostyanov. ``But they promised a lot and didn't deliver. They just disappeared. Sasha and Alex are very reliable. We enjoy working with them very much.''
Work came slowly in the beginning, with only a couple of companies willing to take a chance exporting with the novices. But, like fresh jam on a hot biscuit, word spread, and soon, Savostyanov and Krilov were representing seven companies. New Balance is by far the men's most profitable venture.
Hold on a minute. Isn't the average monthly salary for a Ukrainian somewhere around $30? How are they paying for expensive goods - especially running shoes that cost $100 a pair?
Krilov's expressive face breaks into one of his many frequent smiles. He is sitting under a poster that reads ``Can't is a four letter word.'' A red line runs through the ``can't.''
``There are over 50 million people in the Ukraine. Ten percent of the population is making money and doing very well,'' says Krilov. ``We are catering to the 5 million who can afford them.
``Of course, we are waiting for the time when everyone can afford them.''
It is Tuesday afternoon, and the gentle giants are enjoying one of many steaming mugs of instant cappuccino they consume daily in their sparsely furnished office.
The only equipment they use are a laptop computer, copy machine, fax machine and answering machine. Growing up in the former communist Soviet Union - even though they and 95 percent of the population did not belong to the party - could be reasons for their frugalness, they concede.
``This is all we really need,'' says Savostyanov with a sweeping gesture.
The men think that capitalism has been good and bad for Russia. The communist government provided everything to the people, including free apartments and health care. That's what Russians are used to, says Savostyanov, and that mindset will take some time to change.
``They're used to the government taking care of them - that's why the country is in such turmoil now,'' Savostyanov says. ``When everything is provided to you, there's not enough initiative to do something for yourself.''
Despite the business, Krilov and Savostyanov have remained best friends since their basketball days in Kiev. Every morning their long legs and size 13 feet carry them along the beach for a 3 mile jog, and every other evening, they lift weights at a local rec center or play basketball.
Krilov lived in the duplex until Jan. 14, when he married Gwen Siegler. Savostyanov lives near Oceana with his wife, Natalie, and 10-year-old daughter Toni.
But the men are more like an old married couple. They tease and joke and finish each other's sentences. Their personalities are complementary - boyish Krilov is outgoing and playful, smoothing the sharper edges of the more serious Savostyanov. Krilov's given name is Alexander, but he has gone by ``Sasha'' all of his life. And it's confusing when people call asking for ``Alex.''
``I ask them which Alex do you want?'' says Savostyanov with a sly grin. ``When they say `Sasha' I say, `Oh, you want the cute one.' ''
They like to tell the story about how Savostyanov bought that broken-down station wagon. It was September 1991 and Savostyanov had decided to stay in America after working with a camp counselor exchange program in West Virginia. He made it to Virginia Beach with another counselor but had no money. So he called Krilov in Israel. Collect.
Krilov was playing for the Israeli professional basketball team.
``I told him I need $600 for a used car,'' Savostyanov recalls. ``If he had any money, please wire it to me.''
Without thinking twice, Krilov wired all the money he had in his bank account - which turned out to be $600. That's his best friend, he says. Savostyanov helped him out the same way when he emigrated the following summer.
``The most important question anyone can ask is `Are you happy or not?' I am happy!'' he says. ``I am living in the U.S., I work with my best friend, I am married to a wonderful girl. Business is just a part of my life, it is not the only part.
``If I'm happy now, in five years I will still be happy.'' ILLUSTRATION: D. KEVIN ELLIOTT/Staff photos
Sasha Krilov, left, and Alexei Savostyanov say they will never part
with their first American car, a 1979 Chevy station wagon. "It's
like my baby," Alexei says.
ABOVE: The partners have sold thousands of athletic shoes in their
downtown Kiev store.
RIGHT: Sasha and Alexei make do in their sparsely furnished Beach
office.
KEYWORDS: PROFILE by CNB