CPR for Harrison Paint

By Christine Esposito | August 9, 2005

One dedicated employee and a pair of brothers resuscitate dying Dutch Standard and a 90-year-old paint manufacturer.

Things had gotten pretty bleak at 1329 Harrison Avenue in Canton, OH. To call the Harrison Paint team a "skeleton crew" was being kind. After all, this once 160 employee-strong company was now making do with just three. By late summer 2000, production had dwindled-some weeks there would be an order or two, other weeks there were none. Once proud Harrison Paint and its Dutch Standard brand were fading fast.

One of the three employees still on the payroll was Tom Schmidt. Although he joined the company only recently, he refused to let Harrison Paint die. After the bank, the lawyers and the consultants lost hope of finding an investor, he spent his own time and money searching for someone who could breathe new life into the company.

"I just couldn't sit by and see a 90-year-old company die. I just couldn't," Mr. Schmidt said. "But I had to wait for them to give up before I could try."

He wasn't alone in his dedication to Harrison Paint. Paint dealers and even employees who had been handed pink slips wanted to see the company flourish again. According to Mr. Schmidt, customers would often come in and pick their own orders and employees that had been laid off would often come back to help. "When I needed help, they'd come in and I'd buy them pizza," Mr. Schmidt said.

Mr. Schmidt's crusade included meeting with the chamber of commerce and local and state officials, a letter writing campaign and the use of his own money to mail overnight packages and photocopy documents at the local Kinko's after the photocopier broke down.

Things got even worse when the cold Ohio winter rolled in. "The furnace went out and the bank wouldn't pay to repair it," Mr. Schmidt said. "We came to work in long-johns." (We won't even talk about what he refers to as "the mouse problem.")

By that time Mr. Schmidt's friends and family told him to look for another job. But he persisted. "I didn't want to look back and say 'If I had only made one more phone call,'" Mr. Schmidt said.

One of Mr. Schmidt's 400 calls went to Pat and Mark Lauber, a pair of local businessmen. While neither brother had experience in paint, they knew how to run a business and recognized the potential of Harrison Paint and the Dutch Standard brand. Harrison Paint was well known in northeastern Ohio where the Laubers ran their previous manufacturing businesses. In fact, one former Lauber operation used Harrison paint and another had the company as a customer.

For Pat Lauber, the connection to Harrison Paint was even more personal-he lived next to the company's former owner, Roger Walters, for six years and later bought his house. Little did Mr. Pat Lauber know that a year later he'd be moving into Mr. Walter's office as well.

A Long History
Founded in 1911 in Cleveland, OH, Harrison Paint and was acquired by Gordon G. Walters in 1929 and moved to Canton, OH in 1936. Through the years the company grew substantially, acquiring Midland Varnish Co. in 1959, and extending its range to include commercial and industrial coatings. In 1980, Harrison Paint acquired the trade sales and Kilrust division of Hanna Paint Company, Columbus, OH, and seven years later acquired Worth Paint Company in Lake Worth, FL.

In 1998, Roger Walters sold Harrison Paint to Cook and Dunn LLC, which in turn sold Harrison's retail shops and its Enviro-Coat industrial division to Perry & Derrick in 1999. From there, things went downhill fast. In 2000, Perry and Derrick closed all six of the Harrison retail stores, and Cook & Dunn, which merged with Harrison to form Harrison Brands, filed Chapter 11.

"Through the merger with Cook and Dunn we had a lot of pain that was essentially caused by the guys that put the merger together. It was way over-leveraged. They had a large customer on the east coast that fell through," said Mr. Pat Lauber. "Those two events had a huge impact on the company and forced the company into bankruptcy. It really had nothing to do with our general operations."

What he found most impressive is how Harrison Paint's reputation remained intact despite its many problems. "Customers spoke very highly of the quality of the products and the people. Of the top 30 dealers that we contacted, 28 said that they were committed and willing to help Harrison get back on its feet, which we thought was amazing."

What is also impressive is how quickly the new team has turned the company around. "Our first order of business was to do a lot of renovations to the physical plant, upgrade the equipment, clean out the lines and do a lot of maintenance work," said Mr. Pat Lauber, who saw the company's small customer base as a plus. "We could devote time to some upgrades that are difficult to do when you are in full production." The company then focused on replenishing its depleted inventory, resuming full production on Dec. 22, 2000.

"We are really just now starting to make the rounds and more aggressively go back after the dealers we have dealt with in the past that may have been forced to find another supplier," said Mr. Pat Lauber.

Winning back the trust of dealers might be a difficult task, but Harrison's quality products and formulations will win them over, according to Mr. Pat Lauber. "Harrison has been in business since 1911 and we have a broad line that includes a well-regarded industrial line, anti-corrosion products, niche paints for specialty markets as well as great wall paints and primers. I think that this is an advantage, particularly to the independent dealer who doesn't want to fracture himself between two, three or four vendors. He can buy everything he needs from one company when he deals with Harrison Paint."

A New Lease on Life
Today, Harrison Paint has 27 employees and all but two-Mark and Pat Lauber-worked for the company before. Mark Lauber is serving as CEO and Pat Lauber has taken the reigns as president. "The business is still a shadow of where we have been in the past," said Mr. Pat Lauber. "But we are starting the business conservatively, and we're going to grow it cautiously."

Mr. Schmidt's hard work has paid off. He is now executive vice president, overseeing manufacturing, inventory and purchasing at the firm. Neither Mr. Schmidt nor the Laubers are afraid of getting their hands dirty. "At any time, the three of us might be in the factory, picking orders and helping out. We're all hands on," Mr. Schmidt said.

Harrison Paint's rehabilitation plan calls for rebuilding its dealer relationships. "This first year, our goal is to return to a service level that our dealers have been accustomed to over the years. Beyond that, we certainly intend to expand our dealer base and offer some new products and exciting ideas to the paint business. We are definitely going to concentrate on our own backyard, and try to do the best we can."

The second part of the Laubers' plan is to re-open Harrison Paint retail locations which had been in the Canton area since the mid-1930s. "We feel there is real demand for Harrison Paint products and the Dutch Standard brand in Stark County in particular," said Mr. Pat Lauber.

The new shop in Canton was scheduled to open at the end of March. "The store doesn't compete with any of our other dealers, but it does give us the advantage of a better understanding of what our independent dealers-who are our core important customers-go through on a daily basis," said Mr. Pat Lauber.

The Laubers have the backing of someone who knows the business well. "I was absolutely thrilled when I heard that the Lauber brothers bought Harrison Paint Company," said Mr. Walters, retired former chairman and CEO of Harrison Paint. "I know the Laubers; they have strong management experience. They are capable and committed. This is great news for the community, employees and the long-time loyal dealers who have great respect for the Dutch Standard brand and Harrison's reputation for quality and customer service."

Before it faced hard times, Harrison Paint had been a popular brand in the eastern U.S. According to Mr. Pat Lauber, the company had "consistently been in the $17-20 million range" for many years. As a regional independent manufacturer, regaining that position in today's market will be an uphill battle. "Every market is a difficult market. I don't care what business you are in, someone always wants your business," he said. "We're going to have to go out there and earn the trust back from our dealers."

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