Ekco Group, Inc.
Ekco Group, Inc.
98 Spit Brook Road
Nashua, New Hampshire 03062
Fax: (603) 888-1427
Incorporated: 1903 as Edward Katzinger Co.
Sales: $277.1 million (1995)
Stock Exchanges: New York
SICs: 2879 Agricultural Chemicals, Not Elsewhere Classified; 2392 House Furnishings, Except Curtains and Draperies; 3089 Plastic Products, Not Elsewhere Classified; 3469 Metal Stampings, Not Elsewhere Classified; 3496 Miscellaneous Fabricated Wire Products; 3991 Brooms and Brushes; 5023 House Furnishings
Ekco Group, Inc. manufactures and markets a broad line of household products, including kitchenware and bakeware, molded plastic products, and pest-control and animal-care products, under the Ekco and other brand names. In the mid-1990s, Ekco billed itself the leading supplier of metal bakeware in the United States and the largest supplier of kitchen tools and gadgets in the United States.
Family Enterprise Until 1945
Ekco was founded by Edward Katzinger, a journeyman tinsmith who emigrated from Austria to New York City in 1881 at the age of 18. He left his secure $25-a-week job as a master mechanic in a New York tinsmith shop to open a business in Chicago in 1888. Named the Edward Katzinger Co., this concern manufactured tin pans for commercial bakeries. By 1899 the company, which was always profitable, had a product line that included equipment for confectioners and ice cream manufacturers as well as bakeries. A five-story factory went up in 1906 and a seven-story addition in 1913.
Born over the shop in 1894, Edward Katzinger’s son Arthur was an unruly child expelled from high school. He was packed off to a military school and returned, reformed, to become a 12-letter athlete and captain of the football, basketball, and track teams at Armour Institute (later the Illinois Institute of Technology), from where he graduated with a degree in mechanical engineering in 1916. He then joined his father’s company as plant manager. He later said that, after the death of an older brother in 1919, his father “took me out of the factory and told me to run the company.”
In 1923 the Katzingers built a new, up-to-date two-story factory on Chicago’s Northwest Side. The first of 35 acquisitions in the next 35 years—that would make Ekco the world’s largest manufacturer of nonelectric housewares—took place in 1927, when the Katzingers purchased the August Maag Co., a small Baltimore bakeware manufacturing firm. Two years later the company entered the kitchenware business when it purchased the A & J Manufacturing Co. of Binghamton, New York, the largest producer of kitchen tools. During the next three years—the first three years of the Great Depression— Ekco expanded its Chicago manufacturing complex and moved the A & J facility there, replaced the Baltimore plant with a replica of the Chicago one, and tripled its earnings. When Edward Katzinger died in 1939, Arthur Katzinger assumed the presidency. By the time the company went public in 1945 under the name Ekco Products Co., using the initials of the founder, the founder’s son had changed his last name to Keating and had assumed position as chairman of the board.
Ekco continued to grow by acquisition during these years. It purchased Geneva Cutlery Co. of Geneva, New York, in 1934 and formed a 69 percent Ekco-owned English subsidiary called Platers and Stampers, Ltd. in 1937 to make a line of housewares there. Ekco purchased Sta-Bright Products Corp., a New Haven, Connecticut, producer of stainless-steel cutlery, in 1943; E.L. Tebbets Spool Co., a manufacturer of wooden handles, rolling pins, spools, and toy parts in Locke Mills, Maine, in 1945; and Massillon Aluminum Co., an Ohio manufacturer of cooking utensils, in 1945. Net sales rose from $5.4 million in 1938 to $19.5 million in 1944 and net income from $357,000 to $1.06 million over this period.
Ekco Products Co. 1945-1965
Armed with funds raised by the sale of stock to the public, Ekco Products made acquisitions at an even more rapid pace in the decade following the end of World War II. Among the companies purchased were Murdock Metal Products of Chicago; Byesville Products Co. of Byesville, Ohio; Bergen Forge Co. of Bergen, New Jersey; Diamond Silver Co. of Lambert-ville, New Jersey; Minute Mop Co. of Chicago; Republic Stamping and Enameling Co. of Canton, Ohio; Adams Plastic Co. of Holyoke, Massachusetts; Autoyre Co. of Oakville, Connecticut; and Shore Machine Corp. of New York City. A Canadian subsidiary was-established in 1947 and a Mexican one in 1948. In 1949 Ekco organized the National Glaco Chemical Co. to handle the treatment and coating of commercial baking pans under a new process. Prudential Housewares, Inc., a house-to-house selling organization later renamed Ekco Home Products, was created in 1947. By the late 1950s it was said that Ekco produced some 65 percent of all kitchen tools and 40 percent of all kitchen and table cutlery.
By 1960 Ekco Products, including its subsidiaries, was manufacturing and selling a wide variety of housewares and builders’ hardware items, commercial baking pans, and industrial food-handling equipment. Principal trade names were Ekco, Ekco Eterna, Ekcoloy, Ekco-Autoyre, Flint, Geneva Forge, Waverly Edge, Berkeley, Kennatrack, Worley, McClintock, and Pakkawood. The company’s divisions alone had 11 factories in the United States. Among subsidiaries, National Glaco alone had 15 manufacturing plants. The English subsidiary, renamed Prestige Group Ltd. in 1956, not only operated five factories in England but two in Germany. Other foreign subsidiaries had plants in Toronto, Mexico City, and Sydney, Australia. Net sales rose from $31.5 million in 1950 to $85.2 million in 1960; net income increased from $2.9 million to $4.8 million in that period.
Ekco also entered new fields during these years. With the Aluminum Co. of America (Alcoa) it formed Ekco-Alcoa Containers, Inc. in 1955 to supply rigid aluminum-foil containers, particularly to processors of frozen foods and for TV dinners. Ekco purchased its partner’s interest in 1962 and changed the company’s name to Ekco Containers, Inc. In 1963 Ekco formed a joint venture with Haustrups Fabriker Co. to establish an aluminum-foil container company in Denmark. The following year Prestige established a joint venture with McGraw-Edison to manufacture and sell small appliances in England and export them to the rest of the world outside North America. Also in 1964, Ekco Products Imports Co. was created to sell cordless electric toothbrushes, shoe polishers, and other goods manufactured in Europe and the Far East to distributors in the United States.
Ekco containers accounted for 13 percent of overall company sales in 1964. The builders and industrial division accounted for 14 percent, and the bakery and chemicals division for 11 percent. A 1964 Financial World study reported that while each major Ekco domestic and international division was doing well, the international operations were showing greater growth than the domestic divisions. Ekco had record sales and earnings of $117 million and $7.6 million, respectively, that year, with an excellent 17 percent return on shareholders’ equity. However, the company was running out of other firms to acquire without the likely prospect of antitrust suits. In 1965 it agreed to be purchased by American Home Products Corp. for an estimated $145 million worth of stock.
Under American Home Products 1965-1984
In becoming the Ekco Housewares division of American Home Products, the former Ekco Products entered into a very different corporate culture from its own. This giant conglomerate was, in theory, highly decentralized, with 11 autonomous subsidiaries in 1970 and a tiny corporate staff. But almost all non-budgeted expenditures of $250 or more had to be explained in a special report to headquarters, examined by a corporate finance committee, and personally approved by the company’s chairman and president. According to a later account of the housewares division under American Home Products, “a series of presidents and other executives came and went before they could even find the executive washroom.” In 1967 the house-wares division’s $124.8 million in sales was 12 percent of American Home’s total.
By 1972 the housewares division had been divided into three operations: Ekco Products Inc., Ekco Housewares Co., and The Prestige Group Limited. Ekco Products provided commercial baking pans and service, aluminum containers, food-handling systems, and industrial coatings and closing machinery. Ekco Housewares marketed cookware, cutlery, kitchen tools, tableware, and accessories under a number of brand names, such as Ekco, Flint, Granny, Criteria, Geneva Forge, and Berkeley. Prestige Group was the largest nonelectrical housewares manufacturer outside of the United States. Combined net sales for these units was estimated at $186 million in 1971, or 13 percent of the parent company’s total and 22 percent of its sales outside the United States.
Privately Held 1984-1987
American Home Products sold its housewares operations in 1984 to concentrate on its prescription-drug business. Its 73 percent stake in Prestige Group was sold for about $51 million to Gallaher Ltd., a British-based unit of American Brands Inc. Ekco Products was sold to the Packaging Corp. of America, a unit of Tenneco Inc. Ekco Housewares was sold for $120 million to a group led by Gibbons, Green, Van Amerongen Ltd., a New York investment-banking firm specializing in leveraged buyouts that retained a 15 percent interest in the firm. Ekco Products and Ekco Housewares had combined sales of $330 million and pretax profits of about $55 million in 1983.
Ekco Housewares Co., with about $200 million in annual sales at this time, had many strengths. The company held 40 percent of the U.S. market in bakeware and more than 20 percent in kitchen utensils, which almost certainly ranked it tops in this field. Its market segment was far lower in cookware, cutlery, and flatware, which it mostly marketed door to door in the United States or sold to overseas outlets. Based in Franklin Park, Illinois, a suburb of Chicago, it was placed under the direction of Finn Schjorring, a Dane with Canadian citizenship who vowed to “reestablish the company to its former glory.” Interviewed by HFD, Schjorring, a former American Home Products manager who had joined Ekco Housewares in 1983 as a consultant, said, “I feel that American housewares [manufacturers] have ignored the proper presentation of merchandise to the consumers to entice them to want to buy. We simply have not been entrepreneurial nor creative enough in our approach.… Food-preparation products should be aesthetically pleasing, and we want to bring contemporary concepts in the way of design. Europe is where the trends are born, and we will bring some of that innovation over here.”
A year later, in another HFD interview, Schjorring was even more outspoken. “It’s hard to believe,” he said, “but the products Ekco and other American manufacturers are turning out today aren’t much different from what we were making a century ago. In kitchen tools and other products, the U.S. market is hopelessly old-fashioned, uninteresting, and unimaginative. As a result, all of our businesses here are underdeveloped.” In less than a year’s time he installed a new management team with an equity stake in the firm, designed several new product lines, and moved aggressively to step up advertising and marketing. He cut back the sales force, signing distribution agreements with 68 food brokers to serve the U.S. grocery-store trade, which accounted for about half of company sales, in order to devote more attention to the other accounts. He also sold the company’s home-security division. The Chicago plant, among the largest of Ekco’s seven factories, was closed in 1986.
New products launched by Schjorring included bakeware with a coating 70 percent “slipperier” than the old one to release food better and clean easier, a nonstick broiler pan, and a Nova line of European-styled kitchen tools in bright primary colors. He indicated that Ekco would become more prominent in department stores and other better retail channels as new lines of cookware and cutlery were developed. “There is no reason kitchen utensils should be stuck away in a drawer,” he told HFD. “They can hang on a wall and enhance the decor of a home.”
Sold Again in 1987
Schjorring did not have a chance to realize his ambitions, however, for Ekco Housewares was sold in 1987 for about $124 million. The buyer was Centronics Corp., a shell corporation formerly known as Centronics Data Computer Corp., a manufacturer of computer printers that used the proceeds of about $85 million from the sale of this business to buy Ekco House-wares. In 1988 Centronics, based in Nashua, New Hampshire, changed its name to Ekco Group, Inc. Later that year Ekco Group sold its Canadian industrial container business to Packaging Corp. of America for about $12 million.
The new owners almost immediately faced a challenge from a group, including Sonar Partners, L.P., that held more than eight percent of the shares and wanted to sell the company, distributing the proceeds to the shareholders. Management tightened its defenses against a possible takeover and bought out the dissidents in March 1989, paying $5.4 million for their shares.
Ekco Group consisted, in 1988, of Ekco Housewares and Ekco Canada, with annual sales of $130 million, of which the latter accounted for 21 percent. Ekco Housewares, the leading nonstick bakeware supplier, was best known for its Baker’s Secret brand and did more than half its business in bakeware, although also selling kitchen tools and gadgets. Robert Stein, president and chief executive officer of Ekco Group, said that a new emphasis had been placed on improving on-time delivery rates. In early 1989 Ekco Group acquired Woodstream Corp., a manufacturer and distributor of plastic storage cases such as fishing-tackle boxes, tool boxes, and gun cases for about $25.7 million. Later in the year it bought the Victor mouse- and rat-trap line from McGill Metal Products Co.
The acquisition of Woodstream enabled Ekco Group’s revenues to rise from $135 million in 1988 to $166 million in 1989, and net income from $3.1 million to $4.1 million. In 1990 revenues fell to $162 million and net income to $1.8 million. However, the fall in income reflected a restructuring charge of $3.6 million, and the company managed to lower its debt from about $100 million to below $90 million. Revenues rose to $166.7 million in 1991, and net income to a record $10.1 million.
Under Stein’s direction, Ekco Group closed six plants and reduced the work force by 60 percent. He realigned the sales force from being organized by product division to organization by distribution channel. One group was assigned to supermarkets, a second to hardware and mass-market outlets like Kmart and Wal-Mart, and the third to export markets. A number of studies on consumer attitudes were conducted on a spectrum of issues from quality to value, with the object, Stein said, to “be the total service-leader-supplier, so that price is not the only difference.” Employees were, at every level, faced with a much greater amount of both responsibility and accountability, with top executives limited to decisions purely strategic in nature.
Ekco Group acquired the animal-care products division of Beacon Industries, Inc. in December 1991. A month later it completed the acquisition of Frem Corp., a manufacturer of molded-plastic storage components, for $18.6 million in cash and stock. In 1993 it purchased Kellogg Brush Manufacturing Co., maker of brooms, brushes, and mops, for $33.9 million in cash and stock. Ekco also assumed $13.1 million of Kellogg’s debts. The management of both Frem and Kellogg was retained.
Ekco Group’s net revenues reached $206.6 million in 1992. Net income that year was $8.6 million. In 1993 net revenues, enhanced by the Kellogg acquisition, rose to $246.4 million, but after a $3.2-million accounting charge for postretirement and employee benefits, the company incurred a deficit of $988,000. The restructuring included a cut of about ten percent in the company’s work force, most of it in the Ekco Housewares division. In 1994 net revenues rose to $267 million, and net income was a record $11.4 million. For 1995 the figures were $277.1 million and $8 million, respectively. The long-term debt was $132.7 million at end of September 1995.
In 1995 Ekco Group was manufacturing and marketing a broad line of metal bakeware for home use under the Baker’s Secret and Ekco trademarks. It was selling over 1,000 kitchen tools and gadgets under the Ekco and Ekco Pro trademarks and also was marketing stainless-steel and carbon-steel cutlery and stainless-steel flatware, mixing bowls, and colanders. Some of these kitchenware products also were being manufactured and assembled by Ekco. Ekco also was manufacturing and marketing a broad line of cleaning products and nontoxic pest-control and small animal-care and -control products. It was also manufacturing and marketing injection-molded plastic housewares, office, and juvenile products. Its customers included the 30 largest mass merchandisers in the United States, including Wal-Mart and Kmart—its biggest clients—and more than 90 percent of all U.S. supermarkets.
Bakeware accounted for 29 percent of Ekco’s sales in 1995. Kitchenware followed, with 26 percent; cleaning products came to 19.5 percent; pest- and animal-control products to 12 percent; molded plastics to ten percent; and VIA, an international housewares subsidiary formed in 1994, accounted for the remaining 3.5 percent.
In 1995 Ekco owned seven manufacturing and distribution plants in the United States and an office and distribution facility in Canada. It was leasing eight facilities, including executive offices in Nashua, New Hampshire, administrative offices for the housewares division in Franklin Park, Illinois, a manufacturing plant in Mexico, and offices in Great Britain.
Ecko Housewares, Inc.; Ekco Canada, Inc.; Frem Corporation; Kellogg Brush Manufacturing Co.; Woodstream Corp.; Cleaning Specialty Company; Wright-Bernet, Inc.; B. VIA International Housewares, Inc.; Ekco Consumer Products Ltd. (U.K.).
“American Home: A Reticent Giant,” Business Week, March 21, 1970, pp. 76, 82.
“American Home, Ekco Directors Agree on Merger,” Wall Street Journal, July 30, 1965, p. 5.
“Arthur Keating of Ekco Is Dead,” New York Times, December 14, 1967, p. 47.
Bedingfield, Robert E., “Personality: Executive from Old School,” New York Times, July 30, 1961, Sec. 3, p. 3.
Benson, Tracy, “EKCO Caters to Customers,” Industry Week, June 3, 1991, pp. 11-12.
Byrne, Harlan S., “Ekco Group,” Barron’s, May 6, 1991, pp. 42-43.
Casey, Lisa Ann, “Ekco Group to Continue Acquiring in Addition to Improving Internally,” HFD, January 30, 1989, p. 96.
Ekco Housewares Company, Franklin Park, 111.: Ekco Housewares Co., company document.
“Ekco’s Electrical Enterprise,” Forbes, March 15, 1965, p. 46.
Murphy, H. Lee, “Ekco’s New European Flair,” HFD, July 22, 1985, pp. 50, 52.
Troy, Terry, “Ekco Aims to Purchase Kellogg,” HFD, January 4,1993, p. 74.
——, “Ekco-ing SUCCESS,” HFD, February 24,1992, pp. 60, 64-65.
Waldholz, Michael, “American Home Expects to Complete Sale of Ekco Units,” Wall Street Journal, May 3, 1984, p. 14.
Zapfel, Dolph, “CEO’s Quest: Making Ekco Sound Again,” HFD, December 21, 1984, p. 37.