Jacuzzi Inc.

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Jacuzzi Inc.

2121 N. California Boulevard
Suite 475
Walnut Creek, California 94596
(510) 9387070
Fax: (510) 256-1749

Wholly Owned Subsidiary of U.S. Industries, Inc.
Incorporated: 1915 as Jacuzzi Brothers, Inc.
Employees: 2,500
Sales: $332 million (1996)
SICs: 3088 Plastics Plumbing Fixtures; 3842 Surgical Appliances & Supplies; 3561 Pumps & Pumping Equipment

A wholly owned subsidiary of U.S. Industries, Jacuzzi Inc. is the originator and worlds largest manufacturer of whirlpool baths, with which its name has become synonymous. Jacuzzi was founded in 1915 and remained a family owned and operated company until 1979 when it was bought by Kidde Inc. The latter company was subsequently purchased by the huge British conglomerate Hanson PLC, which later spun off a number of its American subsidiaries as U.S. Industries. Jacuzzi products, which include shower systems, faucetry, and swimming pool and agricultural pumps, in addition to its world renowned whirlpool baths, are manufactured and distributed worldwide through company divisions located in Canada, Italy, France, Germany, England, Brazil, Chile, and Singapore.

Company Origins in the Early 20th Century

Jacuzzi was founded by seven brothers who emigrated from Italy to California in the early 1900s. Engineers by trade, the brothers produced a variety of aviation-related innovations including a pitched propeller developed for the American government and the first enclosed cabin monoplane which was used to carry mail and passengers for the U.S. postal service. According to certain accounts, the Jacuzzis mother was unhappy with the risks involved in aviation and asked her sons to work on something more down to earth. The Jacuzzi Brothers family firm began to design hydraulic pumps and eventually became one of the world leaders in the engineering and production of agricultural pumps used for irrigation.

The Invention of the Whirlpool Bath in the Late 1940s

The companys hallmark product, the Jacuzzi whirlpool bath, was invented in the late 1940s as a personal project of one of the second generation of Jacuzzi company managers, Candido Jacuzzi. Candidos son Kenneth, stricken with rheumatoid arthritis, had been receiving hospital hydrotherapy treatment and, as Kenneth would later relate in People Weekly, as good Italian parents do, my folks thought more is better. A team of Jacuzzi engineers were put to work to develop a home version of the hydrotherapy pump. The result was the J-300, a small portable pump that could be placed in a bathtub to create a soothing hydromassage. In 1956, Jacuzzi began marketing the therapeutic device to hospitals and schools, developing a small but solid niche in the surgical supplies market. Kenneth, who continued to battle the physical challenges of rheumatoid arthritis, went on to found his own successful software company and the Jacuzzi pump that was invented for him achieved its own fame as the plaything of celebrities.

By the mid-1950s the privately owned Jacuzzi Brothers was being run by the second generation of Jacuzzis. In addition to its market-leading agricultural pumps and the J-300, the company patented and produced a large variety of products that made use of their expertise in hydraulic technology, including water jet propulsion motors for a growing recreational motor boat industry as well as swimming pool equipment and a wind machine that helped protect crops from frost.

In 1968, Roy Jacuzzi, a member of the third generation of Jacuzzis to work for the company, graduated from college with a degree in industrial design and joined the family firm as head of the research division. Searching for new applications for the companys products, Roy struck upon the idea of marketing the J-300 hydrotherapy device to the growing leisure and fitness market. In order to create enough room to accommodate a more relaxing soak, Roy developed and patented the first bathtub with a built-in whirlpool system. Dubbed the Roman Bath, this unit made it unnecessary to place a portable pump into the tub, allowing the bather the full interior of the tub in which to enjoy the hydromassage. The self-contained unit was marketed as a replacement for the standard bathroom tub and could be used with or without the hydromassage feature. Although, by his own admission, the senior generation of Jacuzzis thought he was a little weird, Roy set out to create a market for the Roman Bath by displaying it at country fairs and housing trade shows.

By 1970 sales of the built-in whirlpool bath were promising enough to justify the introduction of a larger model, the Adonis, and within two years the company was manufacturing a two-person unit, dubbed the Gemini, available in a wide range of colors and styles. The Gemini line was followed by even larger models called spas which were produced complete with filters and water heaters to obviate the necessity of filling and emptying them with every use. The laid-back culture of California in the 1970s turned out to be the perfect launching ground for the leisure-oriented product and by the middle years of the decade owning a Jacuzzi had become a symbol of the mellow California lifestyle. With the endorsement of high-profile movie stars, sales of the units took off and soon the whirlpool bath division was Jacuzzis biggest profit maker. As the sole supplier of the patented system, the Jacuzzi brand name was synonymous with the whirlpool baths. Although Candido Jacuzzi, the conservative inventor of the original J-300 pump, was reportedly embarrassed about their sybaritic associations, the companys whirlpool baths and spas, and the Jacuzzi name, became identified with indulgent relaxation.

Bought by Kidde Inc. in 1979

In 1976 Jacuzzi moved its corporate headquarters from Berkeley to Walnut Creek, California. By the late 1970s, thanks both to sales of whirlpool baths and the growing export market for the companys irrigation pumps, Jacuzzi Brothers sales reached about $90 million. The company, which by then employed about 100 members of the Jacuzzi family, became the subject of family disagreement, however, and in 1979 the privately owned firm began to look for a buyer. After merger talks with Textron broke down, Kidde Inc., a conglomerate that manufactured products ranging from consumer appliances to hydraulic cranes, bought Jacuzzi Brothers for about $70 million.

Under Kidde, Jacuzzi lost most of its family-run quality as many family members left the firm. The notable exception was Roy Jacuzzi who remained in charge of the companys whirlpool bath division. Although only a tiny part of Kiddes huge operations, both of Jacuzzis main product lines, agricultural pumps and whirlpool baths, continued to thrive. The company was operated as two separate subsidiaries: Jacuzzi Brothers, with headquarters in Little Rock, Arkansas, manufactured pumps and pumping equipment for use in agriculture and swimming pools; and Jacuzzi Whirlpool Bath, run out of Walnut Creek, California, manufactured the companys renowned jetted baths as well as a variety of more conventional bathroom faucetry and equipment.

For both Jacuzzi subsidiaries foreign sales showed particularly strong growth. The companys water pumping equipment was in great demand in the developing countries of Central America which were looking to develop small, efficient irrigation systems. In 1984 the company signed an agreement to become Nicaraguas sole supplier of water pumping equipment, although the subsequent American-imposed trade embargo on Nicaragua meant that products had to be shipped via the companys Spanish and Canadian branches. The European market for whirlpool bath and bathroom fixtures began to take off in the 1980s and Jacuzzis presence in Italy and Spain assured the company a strong showing in this area. By 1987, Jacuzzis whirlpool products alone were garnering some $57 million in sales.

Through the 1980s the trend in both America and Europe was for bathrooms to get larger and bathroom fixtures to be designed for appearance as well as function. Jacuzzis product line expanded to dozens of models available in a huge assortment of colors and with a variety of optional features. Some options available on the more luxurious models included the Water-Rainbow waterfall-like fill spout, programmable massage jets, underwater lights, and built-in mirrored vanity cases. Roy Jacuzzi was personally responsible for designing many of the features of the new product lines; by 1987 Roy held 160 patents for innovations in whirlpool design and technology.

Acquired by Hanson PLC in 1987

In late 1987, the huge British conglomerate Hanson PLC bought out Kidde Inc. and its 100 subsidiaries, including Jacuzzi, for $1.7 billion. One of Hansons first moves in its reorganization of the acquired businesses was to appoint Roy Jacuzzi as president and CEO of Jacuzzi Inc., an umbrella company headquartered in Walnut Creek that was to control the management of both the pump and filter products of Little Rock-based Jacuzzi Brothers and the bathroom and whirlpool products of Jacuzzi Whirlpool Bath. The newly organized company employed a workforce of 1,843 and had annual revenues of about $160 million.

Company Perspectives:

As the worlds first and largest manufacturer of whirlpool products, Jacuzzi is committed to state-of-the-art design, safety and technology. While the company is best known for its innovative whirlpool baths, the Jacuzzi company also designs and manufactures a wide range of non-jetted baths, shower systems, shower bases, faucetry, portable spas, above-ground swimming pools, swimming pool equipment and pumps, as well as agricultural, sump and sewage pumps.

Under Hanson Jacuzzi continued its international expansion and its new product introductions. Chief among the companys innovations in the 1990s was the development of the J-Dream steam shower system. With the J-Dream, Jacuzzi hoped to transform the nature of showering as the whirlpool bath had transformed bathing. The shower system, available to accommodate either one or two users, featured molded seats, programmable hydrotherapy jets, multifunction shower heads and steam therapy as well as such luxurious options as built-in CD players, cascade waterfalls, and waterproof concealed closets to store bathrobes and towels.

Spun Off As U.S. Industries in 1995

Although Jacuzzi remained solidly profitable through the early 1990s, Hanson decided to sell off a number of its American businesses in order to raise cash for further British acquisitions. Although analysts speculated that Jacuzzi, with its widely recognized brand identity, would be spun off as an independent public company, it was decided that 34 of Hansons American holdings would be rolled together as a unit to be called U.S. Industries, a public company with a listing on the New York Stock Exchange. Other companies which were to join Jacuzzi as part of U.S. Industries included such well-known brands as Farberware Cookware, Tommy Armour Golf, Rexair Vacuum Cleaners, and Ertl Toys.

The year after the spinoff operating income for Jacuzzi Inc. rose to $55 million on revenues of $332 million. Almost 80 percent of this revenue was contributed by the companys bath products, including whirlpool baths, spas, shower systems, and non-jetted baths. The remainder came from sales of the water systems and swimming pool equipment that had been the foundation of the company since its early years. In April 1996 this segment was strengthened with the purchase of Haughs Products Limited, a leading Canadian manufacturer of above-ground swimming pools and equipment with estimated annual sales of about $11 million.

As Jacuzzi entered the final years of the 1990s international sales appeared to be the major arena of future growth for the company. By 1996 international markets, including Europe, South America, the Middle East, and the Pacific Rim, accounted for about 46 percent of Jacuzzis sales and analysts predicted that this sector would increase into the next century as the popularity of large, elaborate bathrooms spread worldwide. Plans for a new facility in Singapore that would manufacture products specifically designed for Asian consumers were underway in 1997 and promised to deliver a significant new share of this market.

Principal Divisions

Jacuzzi Whirlpool Bath; Jacuzzi Bros.; Jacuzzi Europe S.p.A.; Jacuzzi U.K. Ltd.; Jacuzzi Whirlpool GmbH (Germany); Jacuzzi France; Jacuzzi Canada; Jacuzzi Chile; Jacuzzi Asia (Singapore); Jacuzzi Brazil; Jacuzzi Pool Products (Canada).

Further Reading

Adelson, Andrea, Jacuzzi Whirlpool Creator to Oversee Hanson Unit, New York Times, January 14, 1988, p. D2.

Candido Jacuzzi, Pooling His Talent, Made the Hot Tub and His Name Part of the American Home, People Weekly, October 27, 1986, p. 92.

Hall, William, More Bubbles for Jacuzzi, Financial Times, December 5, 1994, p. 10.

Muller, E. J., Jacuzzi, Distribution, October 1985, pp. 4143.

Pare, Terence P., A Tale of a Tub, Fortune, June 6, 1988, p. 245.

Power, Gavin, Hanson Spins Off U.S. Units, San Francisco Chronicle, February 23, 1995, p. Dl.

Hilary Gopnik