Paring down to grow

Baltimore innovator 180s sheds some lines and gains a new CEO and more capital as the company reinvents itself.

August 03, 2005|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

180s had all the ingredients of a company that had made it big - rapid growth with few signs of slowing, vendors that couldn't get enough of its products on the shelves and a ranking in various lists as one of the country's top small companies.

But behind the scenes, the Baltimore company that had built a following by refashioning traditional products such as earmuffs and sunglasses with design twists was finding a need to reinvent itself.

"It was just a typical fast-growing company," said Brent Hollowell, 180s' chief marketing officer. "We were getting the products in, but it was a struggle every year."

180s was running into a wall hit by many small companies that suddenly become popular. In April, it was ranked as the fourth fastest-growing private company in an inner city in a survey by the nonprofit Initiative for a Competitive Inner City and Inc. magazine. The company said it posted $50 million in revenue last year and had a 9,249 percent growth rate from 1998 to 2002.

But 180s lacked the capital to support its growth.

That realization more than a year ago set off a series of structural changes to make the company leaner, more competitive and in a better position for the long term. It shed businesses that were draining finances, including selling off Kelsyus, a division that produced products that were popular but cost a lot in research and development.

In April, Patriarch Partners became the majority owner in 180s. The New York investment company infused an undisclosed amount of cash into the company to put it on more sound footing. And in the final piece of the puzzle, 180s last month brought on a new president and chief executive officer, Susan Shafton, whose background includes working with high-growth retail companies such as Gap Inc., North Face, Nike and Federated Department Stores.

Shafton said this week that she isn't granting interviews until she's been on the job a few months. Patriarch Partners did not return phone calls. But other 180s executives said the changes are meant to put the company on a new level. The company is taking on a more corporate feel.

`We're moving'

"We're moving from an entrepreneurial company to an explosive-growth stage where a lot is going to happen at 180s," Hollowell said.

However, the company's new path will come without the input of its founders. Ron L. Wilson II and Brian Le Gette have stepped down from the company, originally named Big Bang Products, which they launched 10 years ago with money from classmates at the Wharton School at the University of Pennsylvania.

Wilson could not be reached for comment. Le Gette said he wanted to take a break from running a business and said he has not ruled out starting another venture at some point.

"I have not had more than 3 1/2 weeks of vacation in six years," Le Gette said. "I love that company and I love the people there and I had a blast and would have continued to have a blast. But I have a lot of other things I would like to do with my life."

It's not uncommon for companies to have to look for outside investment.

"If you're growing, you have big requirements for investment-type money," said J. Robert Baum, an assistant professor of entrepreneurship, management and organization at the Robert H. Smith School of Business at the University of Maryland, College Park. "New stores, new fixtures, advertising, it all costs money. In the early stages of growth, sales and revenue aren't enough. It's typical in a growing company."

Retail experts also said that investment companies often want to hire their own executives when securing a large stake in a company.

"Many of the times, it's typical," said Mark Millman, president of the Millman Search Group, a national retail consulting firm. "They can watch the investment and watch their money."

20 years of experience

With 20 years of retail experience, Shafton was once the global retail segment leader and partner for Deloitte Consulting and, most recently, a principal of Abacus Solutions, a New York-based high-end retail consulting firm.

"She really understands the place we're in," Hollowell said. "Her consulting work has been about optimizing growth."

180s creates products that solve problems, Hollowell said. Its first invention a decade ago was an "ear warmer" - a sleek take on the traditional earmuff that wraps around the back of the head so as not to mess up the hair. The company also makes gloves that are warmed by blowing air into them and sunglasses whose temples fold across the lens for easy storage and protection.

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