Cecil Saydah for sale
By Cecile B. Corral -- Home Textiles Today, 7/26/2004 8:01:00 AM
Somerset, KY. — Less than one year after uprooting its headquarters across the country from Los Angeles to a 305,000-square-foot facility here in an attempt to trim both production costs and escalating rent prices, almost 60-year-old Cecil Saydah International (CSI) is for sale.
Harold Schierholt, president, said that as of late June the company — a manufacturer and importer of kitchen textiles, bath products, beach towels, rugs and decorative pillows — has been on the market and is currently considering offers from four of its major competitors, including two of the United States' top five kitchen textiles suppliers. A deal is expected to be made within the next few weeks.
"Deflation of pricing of product is the main reason we have to sell the company," he explained. "We've been able to maintain our gross margin percentage, just not our gross margin dollars. Something has to give."
Schierholt said it was in early June that the company "understood that dramatic change was necessary."
CSI began by cutting overhead costs, which included the laying off of up to 30 people. They included: Mark Grimes, marketing manager; John Shawger, vice president of sales; and members of the support staff and personnel.
On July 2, in a related move, CSI followed the federal Worker Adjustment and Retraining Notification (WARN) Act and notified its approximately 150 employees at its plant here of the possible shutdown.
"We're evaluating what all this means for the employees of our organization and our service to our accounts," Schierholt said. "We have made a Herculean effort to ensure our customers will continue to get the service they expect."
The company is one of the United States' top three suppliers of kitchen textiles, much of which is made here and represents its core category at $47 million in sales in 2003. CSI's other domestically produced goods are decorative pillows, kitchen rugs and some table linens. Its other categories — beach towels, bath products, door mats and some table linens and scatter rugs — are sourced globally from throughout Asia, India, Central America, Brazil, Egypt and parts of Europe.
After kitchen textiles, table linens represents the company's second largest sales-generating category at $14 million. Third is floor coverings — which includes scatter rugs and door mats — at $10 million. And fourth is beach towels at $5 million. Bath products ring in at $4 million. And finally, decorative pillows, the newest of the categories at less than two years old, stands at $1.25 million.
Schierholt said there is "a little hope that we might evolve into a smaller, more responsive niche player that offers many but not all of the categories" it currently includes in its roster.
"We recognize that the best option for the employees … would be to sell the entire business," he said. "But being pragmatic, we understand that within our industry it appears nobody has the wherewithal to complete such a transaction. Therefore, the reality is we'll entertain the sale of parts of the business."
CSI is a privately held company owned by brothers Richard and John Saydah.
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