Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 26, 1995 TAG: 9503240077
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: LEIGH ANNE LARANCE SPECIAL TO ROANOKE TIMES & WORLD-NEWS
DATELINE: BATH COUNTY LENGTH: Long
The answer lies behind the doors of 1 Main St. in the town of Bacova, where a small home-textiles company's sales figures are running off the charts.
Burlington Industries, which purchased The Bacova Guild Ltd. in January, will help finance growth at the Virginia company, maker of doormats, home fashions and personalized fiberglass mailboxes.
In the next few weeks, Chief Executive Officer Pat Haynes expects to announce plans for a 100,000-square-foot expansion "in the Bath County region." He declined to give details in advance, but with the expansion plans and the financial support a company like Burlington can provide, Bacova is a company industry analysts are watching.
The story starts 30 years ago with Malcolm Hirsch.
Hirsch, now retired and living in Florida, was a wealthy businessman who spent his childhood vacations in rural Bath County.
He bought the defunct lumber-mill town of Bacova in 1957 and, both as an investment and because he loved the area, he turned his attention to refurbishing it.
If people were to live there, they needed jobs, but Hirsch had a hard time luring industry to the small town just north of The Homestead resort.
Frustruated that no one was willing to bring a business to the community, he decided to start one himself.
Bacova began with fiberglass screen printing, putting wildlife designs by artist Grace Gilmore on thermoses, trays, tables and the company's signature product, the Bacova mailbox.
Hirsch sold the company in 1981 to Pat Haynes and Ben Johns, tennis pros at The Homestead. At that time, Bacova had 20 employees and sales of $500,000 per year.
Both Haynes and Johns loved tennis, but they didn't want to make it their life's work. They had an entrepreneurial side they wanted to test off the court. Bacova represented the perfect opportunity.
"The primary reason [Hirsch] sold it was because he knew we wanted to stay in Bath County," said Haynes, now chief executive officer. Haynes, 44, has been in the area 20 years and lives there with his wife and five children.
"We still do a lot of ducks and birds - that preppy look - but we've gone beyond that," Haynes said.
The business itself has that preppy look. Haynes wears a Polo shirt and khakis in the executive offices, which look out over 15 acres of lush green fields and forest, interrupted only by a duck pond.
Haynes says the mailboxes, off-white with cardinals, geese and other country scenes, now account for only 1 percent of the company's business, "but they represent a lot of sentimental value."
What replaced them were items Bacova introduced in the early 1980s, specifically doormats that coordinated with the mailboxes, and other fiberglass products. Now doormats, rugs and accent maps with matching products make up about 80 percent of the company's sales.
"Growth in the textile area is exploding," Haynes said.
Industry watchers say companies such as Bacova have tapped a market of consumers who want to dress up their homes without draining their savings. With coordinates from Bacova and other companies, customers can change the look of a room at a low cost. And while customers can use only one or two doormats, they might buy three or four times as many area rugs and mats for indoors, as well as products with a seasonal theme.
"The boo mat is popular," Haynes said, pointing to an orange and black doormat with a jack-o-lantern, ghost and the word "boo" printed across the front.
Products run from $5 for a doormat to $75 for a Tube Kitty bath ensemble - mats, shower curtains, towels and bath ceramics printed with a black-and-white cat wearing sunglasses and sipping a soda on a yellow-spotted inner tube.
Recently, business has grown at a rate of 30 percent a year. The company saw $40 million in sales in 1994, and this year expects $52 million in sales, Haynes said.
But to continue that growth, the company needed expertise and it needed capital. Enter Burlington Industries Inc.
|n n| "A year ago we, had no idea we'd be selling the company," Haynes said. But Bacova needed financing and expertise to accommodate the growth.
"We were not necessarily looking. It was just a great opportunity," says Dick Windham, a spokesman for Burlington Industries Inc. in Greensboro, N.C.
He would not disclose the price Burlington paid for Bacova. "They needed some financial resources to continue to grow their business, ... and we're able to supply that capital, so it made a nice marriage."
Burlington is a giant in the industry, with more than $2.1 billion in sales, 47 plants in the United States and Mexico, and more than 24,000 employees. Virginia is not new to the manufacturer, which has operations in Carroll, Halifax and Mecklenburg counties, as well as a distribution center at Hurt in Pittsylvania County.
The headquarters for its carpet division is at Glasgow in Rockbridge County, not far from Bacova, but that didn't play a role in Burlington's buying the company, Haynes said. "There may be some synergies as we look down the road, but we have not identified them as yet."
Analysts agree the merger of Bacova into Burlington is a perfect match.
"Bacova is at a point where they can use a couple of things: capital, and access to distribution," said Jack Pickler, a textile and apparel analyst and first vice president with Prudential Securities in Richmond. "Burlington being the big guy on the block will help them expand."
The move also gives Burlington the opportunity to diversify: Burlington's rugs are stand-alone products; Bacova offers coordinates. Pickler said Burlington is No. 1 in the area-rug business, and that's where Bacova is seeing its growth, "so for that reason it makes a lot of sense."
Windham said Bacova complements the company's products. "The kind of thing that Bacova does is not carpets, it's welcome mats and floor mats as well as kitchen and bath accessories."
So far, the change has been smooth. In fact, except for the companies' announcements, most would say there's not been much change at all. Burlington wants Bacova to keep doing what it does best.
"The last thing they want us to do is take our eye off the ball," Haynes said.
And what the company does best is come up with new ideas and take risks to anticipate consumers' wants and needs, Johns and Haynes said.
Haynes use the example of the madras mailbox - and said "it was Ben's idea."
Going into their first year at Bacova, the company was producing, manufacturing and marketing a line of wooden picnic baskets.
"I thought some were small, like women's purses, so we bought some tartan plaids, madras and gingham fabrics," Johns said. They lined the boxes with the fabric and screen-printed the outside to match, and they sold well. So he decided to take the idea further.
"Ben said, 'What could be more preppy than a madras mailbox?'" Haynes said.
It wasn't a hit.
"I think we sold one - in Charlottesville," Haynes said.
"It's one of the keys to why we were successful," Johns said in his defense. "It's just an example of how we do things new and different and untried. Some work, some don't."
The company operates plants in Millboro and Bacova and in Dalton, Ga., which is to carpet what High Point, N.C., is to furniture. The company has product displays and sales representatives around the country and a sales office in Alexandria, which offers employees there easy access to a major airport.
"It's been a great place for recruiting," Johns said of the Alexandria office. The company soon will hire another international sales manager, he said.
Johns and his wife, a fashion designer, split their time among a Manhattan apartment, a home in Hot Springs and a base in Georgetown, where they raise their three young sons.
Recruitment is sometimes a problem. Living in an idyllic small town may be heaven, but Haynes and Johns said that despite the fact that the area regularly checks in with some of the highest unemployment rates in the state, they have had trouble finding hourly production workers and middle- and upper-management, marketing staff, computer specialists or designers, for instance.
In-line workers make a base wage of $5.50, but with incentive programs for high production, the lowest hourly wage usually is $6 to $7, Haynes said. Salaries for other workers run the gamut.
Haynes estimated that 40 percent of the 350 employees who work in the Millboro and Bacova facilities live outside Bath County, and some commute from as far away as Staunton.
"You really have to find the right fit," Johns said. "Particularly with a lot of husbands and wives working. If you attract one of them here, what's the other one going to do?"
This is a community where Virginia Power, The Homestead and Bacova are the principal employers.
Bacova is the kind of place an old yellow dog can sun himself in the center of the road, in the middle of town, and not have to worry. But the schools are small, multiplex isn't part of the local vocabulary, and amenities that city people are used to can be 45 minutes to an hour away.
"The Homestead has to deal with the same thing," Johns said. "In some cases, you might have to pay what would be perceived to be over-the-market rates to get people here. I guess ... you have to be willing to wait awhile to find someone who can match their personal life with their job."
But then, for the right people, the small-town qualities are positives. "Once you get people here, they concentrate on their work," Johns said. "The labor force is loyal and reliable - it's been one of the keys to our success."
"Because of our growth, we have really depleted the labor pool in Bath County," Haynes said. "That's why we're looking at the Bath County region" to expand.
Both said they expect to meet the challenge of recruiting as they expand, and that moving from products outside the home (mailboxes and doormats) to indoors (with kitchen and bath coordinates) is the key.
The company will continue to take cotton area rugs and natural fiber mats like jute and add value through screen-printing or fabric borders, another new twist on an old idea of dressing up the product. The company also is jumping behind the wheel with car mats.
Haynes said decorative home furnishings is a high-growth area, "particularly as baby boomers get settled in their houses. ... Down the road, we want to be a $100 million company."
by CNB