The Sherwin-Williams Company

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The Sherwin-Williams Company

101 Prospect Avenue, Northwest
Cleveland, Ohio 44115
U.S.A.
(216) 566-2000
Fax: (216) 566-3310

Public Company
Incorporated: 1884
Employees: 16,726
Sales: $2.12 billion
Stock Exchange: New York

The Sherwin-Williams Company is a producer and distributor of paints, coatings, paint sundries, various home decorative items, adhesives, labels, and color cards. It also produces motor vehicle finishes and refinish products, as well as industrial finishes for original equipment manufacturers of metal, plastic, and wood products. Its products are sold through 1,865 company-operated stores.

The story of The Sherwin-Williams Company began in 1866, when Henry Sherwin used his life savings of $2,000 to buy a partnership in the Truman Dunham Company of Ohio. The firm was a distributor of pigments, painting supplies, oils, and glass. In four years, this original partnership was dissolved, and Sherwin organized a paint business with new partners, Edward P. Williams and A. T. Osborn. The new business was called Sherwin-Williams & Company.

In 1873 the company purchased its first factory, on the Cuyahoga River, in Cleveland, Ohio. The factory manufactured paste paints, oil colors, and putty. The company’s first manufactured product, Guaranteed Strictly Pure Raw Umber in Oil, came off the line in that year.

The paint industry in the 1870s was radically different from what it is today. Painters had to buy the ingredients and mix their own paint each day. At this time prepared paints— paints that were ready-mixed—were concocted and sold by individual dealers who mixed a few popular colors. These premixed paints were available only during the busy spring painting season.

In those days, oil and pigment had to be ground together into a paste. The paste was then thinned with more oil, thinners, and driers. Customers brought their own containers to stores and filled them as needed. Paints had to be stirred continuously to prevent the pigment from sinking to the bottom of the container. In addition, the paint had to be used quickly or it dried out. For these reasons, paints were seldom shipped far from where they were made. The first patent for ready-mixed paint was taken out in 1867 by D.R. Averill of Newburg, Ohio; it made improvements to the existing mixing processes.

In 1877, the company developed the first patented reclosable paint can. This revolutionized the way paint could be used, and more importantly, used over a period of time.

During the 1880s the company continued to develop new products for the paint industry. At the beginning of the decade it improved its liquid paint formula. After two years of test marketing under the Osborn label, it introduced SWP— Sherwin-Williams Paint—the first mixed paint to receive considerable public acceptance.

In 1884 the partnership was dissolved and Sherwin and Williams incorporated as The Sherwin-Williams Company. In the same year, Inside Floor Paint was introduced. This new product encouraged the notion that specific paints should be used for specific purposes. During 1884, Percy Neyman was hired by Sherwin-Williams as the first paint chemist in the industry. Neyman contributed greatly to Sherwin-Williams research and development of new products for the paint industry.

Sherwin-Williams had always been committed to finding and developing new markets for paint products. In 1888, the company saw the possibility of marketing paints and coatings to the railroad industry. It opened a manufacturing facility in Chicago to serve the Pullman Company, and to better serve the farm-implement and carriage industries. In those days, Pullman required as many as 20 coats of high-quality finishes for the elaborate interiors of the Pullman cars. Sherwin hired George A. Martin, an ambitious young man to run the new facility. Martin later served as the third president of the company.

Marketing and advertising quickly became critical to the growing company. Seeing the need to make people aware of its products, in 1890 the company formed a department devoted exclusively to advertising and to publicizing Sherwin-Williams and its products. George Ford was hired to head the department. A year later, a sales agency was opened in Worcester, Massachusetts, which was the model for the company’s successful concept of the “company store.” In 1905, the “Cover the Earth” trademark was first introduced.

Walter H. Cottingham became the second president of the company in 1909. Sherwin then became chairman of the board of directors. Cottingham strove throughout his career to inspire his workers to attain their maximum potential. Cottingham was adept at launching successful sales campaigns. He was also known as a writer and orator and wrote a collection of “inspirational” editorials and papers on a variety of subjects.

In the early part of the 20th century Sherwin-Williams began acquiring other companies to meet the increasing demand for a variety of different paints and related products. In 1917, under Cottingham’s guidance, the company bought the Martin-Senour Company, of Chicago. Three years later, in 1920, the company went public, selling $15 million in preferred stock. Proceeds from the sale were used to purchase the Acme Quality Paint Company, of Detroit; a new plant in Oakland, California; and to expand various existing facilities.

When Cottingham retired in 1922, Martin—who had become vice president and general manager in 1920—took over the leadership of the company. During Martin’s tenure as president, Sherwin-Williams developed nitrocellulose lacquer and synthetic enamel. These products made possible the brilliant finishes that covered cars during the 1920s. Such products also reduced from 21 days to a few hours the drying time of newly painted cars.

George A. Martin, like Cottingham, believed in strong advertising for his company and its products. He sponsored the “Metropolitan Opera Auditions of the Air,” a successful radio program that ran for years.

Also during Martin’s presidency, Sherwin-Williams bought several other high-quality, nationally known companies. Among them were The Lowe Brothers Company, of Dayton, Ohio, and The John Lucas Company, of Philadelphia, Pennsylvania. Both were innovative companies.

Martin’s vision focused on finding ways to expand the company and increase its profits. He believed that Latin Americans would respond favorably to high-quality paint products. In 1929 Sherwin-Williams bought the Bredell Paint Company of Havana and enlarged it. Martin expanded the company’s manufacturing facilities and established plants in Buenos Aires and Sao Paulo.

For Sherwin-Williams, the early 1940s brought an opportunity to participate heavily in America’s World War II effort. Sherwin-Williams, along with other paint companies, supplied camouflage paints for the armed forces. It was said that the invasion of North Africa was delayed while waiting for the delivery of camouflage paints with which to provide proper field cover. The company also received a commission to load shells, anti-tank mines, and aerial bombs. To meet this demand, the company constructed and managed a plant in Carbondale, Illinois.

In 1940, Arthur W. Steudel, a Cleveland native, succeeded George A. Martin as president. Steudel worked his way up in the company through the dye, chemical, and color division. He had many visionary ideas about paint retailing and merchandising. The company’s profits increased under Steudel. He served as president until 1961, at which time he became chairman and chief executive officer.

During the 1940s, Sherwin-Williams introduced several new products to the consumer. Kem-Tone, the first emulsion-based, fast-drying paint for the do-it-yourself market was introduced in 1941 and met with remarkable success. Kem-Tone helped deal with the raw material shortage that the nation faced after the war. That same year, the company introduced the Roller-Koater, the first applicator that was not a brush. It was later developed and refined into the paint roller commonly used today.

Soon thereafter, the company introduced Kem-Glo, a porcelain-like enamel and Super Kem-Tone, a high-quality interior paint that had a synthetic rubber content. The prefix “Kern” indicated that the paints were “chemically involved materials.” The development of these products was crucial to the expansion and success of the company.

During the 1950s and 1960s the company continued to grow and prosper. E. Colin Baldwin served as president from 1961 to 1969. In 1964 the Sherwin-Williams Company was listed on the New York Stock Exchange. In 1966, Sprayon Products was acquired.

In the 1970s, the company suffered substantial losses. In 1977, on revenues of $1 billion, it had a loss of $8.2 million, and dividends were suspended. Sherwin-Williams’s borrowings increased dramatically. Without any debt in 1967, by 1977 Sherwin-Williams had long-term debt of $196.6 million. The following year the debt increased to $242 million. In addition, by 1978 Gulf + Western Industries held 13.47% of Sherwin-Williams’s outstanding stock. Walter O. Spencer, CEO since 1971, resigned in 1978. Spencer was replaced, on an interim basis, by William C. Fine. Sherwin-Williams found a new permanent leader in January 1979, when John G. Breen became president and CEO. Breen was a former executive vice president for Gould Inc., a Minneapolis, Minnesota battery manufacturer. In a short time, Breen managed to bring the company back to financial stability and avert the threatened Gulf + Western takeover. Breen first persuaded Gulf + Western Chairman Charles Bludhorn to sell Gulf + Western’s Sherwin-Williams shares. Breen convinced Bludhorn that Gulf + Western’s Sherwin-Williams holdings were a liability to Gulf + Western and that Sherwin-Williams would be unable to recover financially while the threat of takeover loomed. Bludhorn was, likely, swayed to a greater extent by the fact that his Sherwin-Williams shares were no longer a sound investment. Next, Breen reshuffled Sherwin-Williams management, replacing several vice presidents. He decentralized responsibility and discontinued about 1,000 slow-selling products. Breen also cut the company’s long-term debt. In the first half of 1980, Breen’s policies yielded a 57% improvement in earnings over the same period in 1979.

In 1979, sales were $1.19 billion and by 1985 were $2.17 billion. Net income rose from 6⊄ to $1.60 per share between 1978 and 1985. Breen served as president until 1986, when he became chairman, retaining the office of CEO. Thomas A. Commes became president.

In 1971 Sherwin-Williams introduced POLANE, a coating designed to efficiently cover metal surfaces but found to work exceedingly well on plastics as well. In 1980, Dutch Boy was acquired by the company, substantially increasing its sales. Sherwin-Williams bought the Gray Drug Stores chain in 1981, and then sold that group in 1987.

To reach markets outside the continental United States, the company formed in 1984, BAPCO, an equal partnership, with C-I-L, Inc. of Canada, a subsidiary of Imperial Chemical Industries PLC of England. That same year, Sher win-William acquired the assets of Dupil-Color, Inc. During 1985 Sherwin Williams chemical operations were sold to PMC Specialties Group. In 1987 the company acquired the Lyons Group. In 1986 Thomas A. Commes was elected president and John G. Breen became chairman. In 1988 the company sold its interest in the BAPCO partnership to C-I-L, Inc.

During the 1980s sales of house paints decreased, notably because of the use of alternative surface finishes such as pre-finished aluminum and plastic surfaces. Sherwin-Williams responded to this by substantially increasing its advertising budget from $4 million in 1989 to $15 million in 1990. Sherwin-Williams in 1990 had 20% of the home market. Time will tell if its quality products and quality service will allow it to maintain or even better that position.

Principal Subsidiaries

Sherwin-Williams Canada, Inc. (96.8%); Sherwin-Williams Automotive Finishes, Inc. (Canada); 147926 Canada Inc.; Lyon’s Technological Products Ltd. (U.K.); The Sherwin-Williams Co. Resources Limited (Jamaica); Sherwin-Williams (Caribbean) N.V. (Curaçao); Sherwin-Williams (West Indies) Ltd. (Jamaica); Sherwin-Williams Foreign Sales Corporation Limited (Virgin Islands); Sherwin-Williams Development Corp.; SWDC (Virginia), Inc.; Contract Transportation Systems Co.; Dupli-Color Products Company; Lyons Transportation Lines, Inc.; Certified Distribution Services, Inc.; Sherwin-Williams International Company.