14106 Mon, 03/24/2008 - 3:40pm
JACKSONVILLE, Fla.–The lighting business underwent another buyout this month, but this time it wasn’t a case of a large firm buying a smaller one.
The management and employees of Hunter Lighting Group/Kenroy purchased the assets and ongoing operation of the lighting business from the Hunter Fan Co., based in Memphis, Tenn.
Company insiders characterized the move as one that will demonstrate to the lighting industry that small players can be more flexible, nimble and responsive than larger companies.
While the same people are running the company, the former Kenroy/Hunter Lighting Group has a new name, logo, mission and attitude.
“We’ll be fast and responsive and customer-friendly without the assistance of a larger parent,” said Bob Pape, who continues as president and chief executive officer of Kenroy Home, the newly named company.
For Hunter Fan Co., the divestiture comes at a time of renewed emphasis on the core business, which doesn’t include decorative lighting.
“That business is really a high-touch business,” Chuck Smith, president of Hunter Fan Co., told HFN. “Bob and his staff have a better chance to make that business succeed. They can be more nimble; product development will be less encumbered than with Hunter Fan,” he said.
At Hunter Fan, “We are putting an increased focus on our core businesses—ceiling fans, home comfort, and circulating and ventilating products—and this will allow us to fine-tune that strategy,” Smith said. “Based on our forward-thinking strategic direction, it just didn’t fit.”
Financially, the buyout doesn’t reduce Hunter’s business by much. Hunter Fan Co., of which Casablanca Fan Co. is a part, was sold to MidOcean Partners in March 2007. Hunter’s total estimated annual sales in 2006 were $350 million. The lighting division has estimated annual sales between $25 million and $30 million, insiders confirmed.
Pape said the deal is backed by a bank loan from M&I, “a private bank in the Midwest that works with manufacturers and understands fundamentals, not like a Wall Street firm.”
Employees have stock and options in Kenroy Home, so that the more successful the company is, the more they benefit, Pape said.
Going forward, Kenroy Home’s customers will first see the new company identity, logo and tagline, but will also see a renewed emphasis on its customers. “We like the diversity of our business,” Pape said. “We’re not dominated by one account or one channel, which wasn’t the case two years ago,” he said. At that time, Hunter was juggling a major program with Lowe’s that has since been discontinued. Kenroy will continue to target lighting showrooms, furniture dealers, specialty, Internet and catalog merchants, whereas the mass will not be a focus, Pape said.
“It’s a back-to-basics approach,” he said.
Product-wise, customers will see “more products they’ll use every day, such as essential pendants, table and floor lamps,” Pape said. “We’ve always been a line that’s value-oriented.” Now, with better designs in salable styles, the aim is to offer top-performing goods to help retailers in poor economic times, he explained.
Kenroy Home reserves the right to enter related home categories where there’s a need, which wasn’t easy to do under the former owners, Pape and other company officials explained.
“The fountain business is really a good example of the type of thing we feel strongly about,” Pape told HFN. “It was a very difficult decision for Hunter to get into it and [it was] constantly questioned.”
For Kenroy Home, those decisions would be easy. “The whole idea is [to] look at how that category links together multiple parts of the indoor and outdoor environment, whether coordinating lighting, coordinating home furnishings or furniture.” Pape said that Kenroy’s specialty is the variety of decorative product categories, “as opposed to the Hunter [business] mentality of highly functional, performance-oriented products.”
“Our strength was more at the decorative end and understanding channel differentiation,” he added.
Under its three-year transition agreement with Hunter Fan Co., Kenroy Home will continue to sell Hunter-branded lighting to a select group of accounts, under license from Hunter Fan, officials at both companies confirmed. Hunter sales agents will continue to sell the Hunter-branded goods, under the license. And logistics and distribution will continue to be handled through Hunter Fan’s Byhalia, Miss., distribution center, described by Pape as “world-class.”
Kenroy Home will operate its own product development, sales, marketing, customer service, credit and administration infrastructure from Jacksonville.
Pape served as group president of the Hunter Lighting Group from 1993 to 2005, and most recently president of Hunter’s now-shuttered Business Innovation Group, returned to the lighting division in November 2007 .
Pape’s staff includes industry veterans David Lasch, who continues as director of sales for lighting showrooms; Joel Wasserbauer, who continues as director of sales for decorative channels; and Deb Green, who continues as director of product development. Evan Klippel, former director of inventory planning, has been named director of inventory and logistics, taking on more responsibilities in logistics. Gary Winters continues as controller, and Dot Raulerson, the longtime customer service manager, continues in that post.
Kenroy Home has 31 employees in Jacksonville and 10 in the company’s China office, which handles design, engineering and inspection.