By David Gill
BOCA RATON, Fla.–Commenting on the state of the Consumer Solutions division in an interview with HFN, Jarden’s Andrew Hill, president of the division, hinted that the company may bolster its housewares business with another acquisition—the primary route Jarden has taken in building its stable of housewares brand portfolio.
“There’s no specific one now in the works, but we’re evaluating alternatives,” Hill said. “There are some pretty decent buys out there, distressed companies looking for an exit. There are enough struggling companies so that it gives us an opportunity right now.”
Hill’s statement was a clarion call to the housewares industry, coming from one of its largest companies and one that has built much of its business through acquisitions.
In terms of a company to acquire, the best fit for Consumer Solutions would be a vendor with brands that have gained some weight in international markets. “We’re growing rapidly in our international business, so we’re looking at companies who have a presence in the countries we’re focusing on,” Hill said. “We’re looking at Latin America, India and China.”
This doesn’t mean that Jarden would confine this search to companies only with international brands. “We could go either with a company brands strong in the U.S. but not abroad, or a company with good international brands,” Hill said. It could also be a company with either one strong brand or a portfolio of brands, he added.
Jarden Consumer Solutions is also looking to strengthen its presence with direct-to-consumers, and a company already powerful in this area could also be an acquisition candidate. “We’re making a strong push in direct-to-consumer, and we’ve developed an entire infrastructure to support it,” Hill said. “Our FoodSaver and Holmes brands have a direct element, which they developed before we bought them. We brought all of that inside, including fulfillment, order taking and credit cards.” Jarden, then called Altrista, bought the FoodSaver brand when it acquired Tilia International in 2002. It purchased J.B. Holmes in 2005.
The acquisition strategy as Hill described it follows the lead for Jarden as a whole, as explained by its chairman and chief executive officer, Martin Franklin, at the William Blair & Co. Stock Growth Conference on June 18. In a Webcast of the event, Franklin said, “We’re not driven by acquisitions. We only make them when we feel they are right. We look at niche companies that might be struggling for one reason or another.”
Franklin said Consumer Solutions’ annual revenue now measures just under $2 billion, making it the second-largest division in the Jarden corporate family, behind Outdoor Solutions—which itself grew dramatically in 2007 with the acquisitions of K2 and Pure Fishing. Consumer Solutions now accounts for one-third of the corporate parent’s total yearly revenues. “Consumer Solutions is the number-one player in all of its markets,” Franklin said. “It has more resources than any of our competition to develop and market new products.”
Like other manufacturers of home goods, Consumer Solutions has been hit by the increases in manufacturing costs, particularly in China. Hill said Jarden has established price increases of from 4 percent to 15 percent, depending on the product. It has also tried to soften the blow on its retail customers from these increases through staggering the effective dates on the increases, and by delaying the higher end of those increases until further into the future.
