LEVIN: SUNBEAM IS SHINING AGAIN.
Levin, interviewed at the New York offices of the Boca Raton, Fla.-based company, also said the company is rolling out a massive consumer print advertising campaign this year with a budget "five times what was spent in prior years." And by the way, American Household will be at the International Home and Housewares Show, Levin said.
The ad campaign initially focuses on the Mr. Coffee and Oster brands, and will then extend to the company's other brands, such as First Alert and Coleman. Levin said the aim is attracting younger demographics. Mr. Coffee, for example, is currently running ads with country singer Toby Keith.
Meanwhile, Oster-branded small appliances are getting a facelift with an ad campaign that includes placements in People, Cooking Light, Better Homes and Gardens, Parade and other magazines (see story on page 24).
Regarding acquisitions, Levin was frank. "It's a necessity," he said. "As retailers continue to consolidate, we're going to have to do the same."
Levin said he sees American Household emerging as a leader in a consolidating industry. "But we must first resolve with the [shareholders] the need to be an aggressive acquirer," he said.
That could be a challenge. American Household's owners include the three primary creditors of prebankruptcy Sunbeam: Wachovia Securities, Bank of America and Morgan Stanley. And as most know, traditional bankers prefer getting money from an asset or investment instead of doling it out.
In turn, Levin said he charged himself with building a strong case for making acquisitions. From a financial perspective, American Household may be in a better position to make acquisitions than its competitors. When the company emerged from Chapter 11 in December 2002, it came out with little debt and a strong balance sheet, Levin said.
Since emerging from Chapter 11, Levin said sales have been flat, which is not bad, considering a business climate tempered by price deflation, he said. Still, without mentioning specifics, Levin said sales are around $2 billion, with earnings before taxes around $100 million. He added that unit sales are up and licensing revenue contributed to double-digit growth in overall branded sales. Long term, Levin expects this momentum to continue.
So if American Household acquired a company, would it be one that made products that get plugged in? "That's a question we ask ourselves," he said, adding that an acquisition of an asset could take place this year, or more likely in 2005. "I think [the target company] would be what we like to call a `non-disposable, consumer durables-type company."'
Whatever the target company, it probably will be one with a well-positioned brand. "Brands are critical," Levin added. "We're marketers, and work comfortably with brands."
American Household's brand-building initiatives, either through acquisition or heavily marketing its current stable of brands, is a key point of differentiation with the company. Levin noted that rising concentration levels -- sales of goods to two or three top retailers -- is a trend that's not going away.
Another trend of concern is outsourcing goods. Although American Household sources more than 60 percent of its products overseas, Levin said the company has contingency plans in place to keep products flowing in the event of a disruption to the supply chain, like 2002's dock workers lockout.
"We don't want to be in a situation where we're completely dependent on products made on the outside," Levin said.
Looking ahead, Levin is optimistic about the retail landscape. It's an election year, after all. "And the tax rebate will provide a surge in consumer spending," he said.
WHAT'S IN A NAME?
Jerry Levin, chairman and chief executive officer of American Household Inc., reminded HFN that the company's prebankruptcy name was Sunbeam Corp., which is also a familiar brand to millions of consumers.
But when it was time to exit Chapter 11, the emerged company would need a new name.
"So we held a contest," Levin said, noting that employees were asked to submit a new corporate name. "More than a hundred names came in and that was narrowed down."
After a list was approved by the legal department, management picked American Household, surprisingly, a name no one else owned.
"The winner was given a $1,000 reward," Levin said, adding that he later heard another company spending more than $50,000 to find a new name. Indeed, some corporations spend millions to rename themselves.
"We saved a bundle of money," Levin said, smiling.
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|Title Annotation:||American Household Inc. chairman, CEO Jerry Levin|
|Author:||Zaczkiewicz, Arthur; White, Jennifer|
|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Date:||Jan 19, 2004|
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