Premium Wire
Premium Wire, located in Mayfield, KY, produces lampshade rings and frames. Nothing more, nothing less.
History
Premium Wire was founded in 1982 by Ralph Hobbs and two brothers - James and Robert. Their business grew throughout the 80's and 90's but by the turn of the century, they began to face the onslaught of Chinese imports. By 2008, they'd had enough of the battle - and to some degree, of each other. Making matters worse, the weakness in housing sales in mid-2008 had put a hurt on sales. They wanted out.
My partner and I saw an opportunity. Among the things that appealed to us were the opportunities they were missing, including:
- No online presence
- Had never made a sales call
- Had never attended a trade show
- Had never sent an email
- Had no computer
- Refused large frame orders
In addition, with sales down, the price was right. We also had an agreement with one customer to begin selling frames that was going to give us an immediate 60% bump in sales. So we agreed to a purchase on September 11, 2008, a Thursday. That Sunday, Lehman Brothers went belly-up, beginning the financial meltdown of 2008-2009. And what business absolutely disappeared? Residential and hospitality new construction and remodeling. And what is the end market for lampshades (and, thus, lampshade rings and frames)? You guessed it. Our business fell 70% within thirty days of our acquisition. As my partner said, if we'd waited a month, they'd have given it to us. To which I replied, if we'd waited a month, we wouldn't have taken it. But we already had.
So I got on the road, driving across Pennsylvania, to Brooklyn, NY (where there are lots of lampshade manufacturers) and to Wisconsin, Chicago and elsewhere. We also put up a website, sent out emails and started getting inquiries large and small. Which was good, because of our five largest customers when we started, one shut down, one was put on credit hold, one went from paying in seven days to somewhere between 60 and 90 days. Cash was tight. But by the end of year one we had eked out a 3% sales gain over the year prior to our purchase. Margins were poor and cash flow was still rough, but we'd weathered the worst of it.
The next year we instituted minimum order quantities, adding a surcharge to orders under a certain threshold, which helped improve margins. By 2013, sales were increasing at strong double-digit rates and we took advantage of the opportunity to sell, which we did in 2014. Ralph and Robert were good people - as good as you will find anywhere (ask me to tell you about them sometime). But I don't miss the business.
They're still in business, however, and can be visited at their website. Check them out.
