St Louis, MO — Remember Victor Kiam? Television viewers from the 1980s will likely recall that Kiam liked his Remington shaver so much that he bought the company. So it was for Dan Claypool, who, after eyeballing six other businesses, set his sights on Merric Millwork and Seating of St. Louis.
“I wanted to be able to put my arms around the business and touch something solid, so it was either a distribution or a manufacturing company. I’m not someone who would want to own a software company,” explains Claypool, who acquired Merric last year from its previous owners, who retired after having built up the firm for 24 years. Along the way, Merric crowded its customer portfolio with an enviable list of hospitality firm clients, including Marriott, Sheraton IHOP, and others.
“When you walk into the lobby of a Marriott Courtyard and stand in the check-in area, there are two pieces of furniture known as welcome pedestals — we make those,” explains Claypool, who boasts that the firm has added an additional 24 new clients since his arrival.
“We believe that we can do four times the capacity that was done through these same doors,” explains Claypool, who says that his optimism has been in part fed by recent studies that have projected 7 percent year-over-year growth through 2018 for the hospitality industry. “The pie is still getting bigger,” Claypool comments.
Meanwhile, to help drive additional growth, Claypool says, the company has added an outward-facing sales team.
“To borrow an analogy from the prior owners, Merric waited for the fish to jump in the boat. And while they had a great name out there, I decided that it was time to go wet a line and place some sales people out to drum up additional business,” notes Claypool, who says that in addition to adding sales talent, the $10 million firm has begun to peer into industry segments that it had previously ignored.
Nevertheless, he marvels at the pent-up demand inside the hospitality sector, where many properties are in need of a facelift after several years of cost-cutting and sporadic capital investment by the industry.
“There are fewer millwork companies out there than there were, and we are now hearing that some shops are already booked up until May 2015,” says Claypool, who is a seasoned supply chain executive with earlier tours of duty with Whirlpool Corporation and Furniture Brands International. He reports that he was looking to break free from the corporate grind of a large enterprise and focus his energies on growing a lower-middle-market business.
One of the bankers involved in Claypool’s purchase suggested that he align himself with a silent partner, who could own 5 percent of the company. “It’s just someone to bounce ideas off,” he says.
Meanwhile, Merric’s new CEO is already putting his years of supply chain experience to work inside Merric’s deepest recesses.
“A lot of small businesses don’t have the skill set, the time, or the resources to fully integrate their processes and then streamline them and automate them,” he explains. Among the processes that have already enjoyed a makeover is the firm’s order tracking, where Merric replaced manual processes with software. Today, he is able to transparently track orders from an initial bid to purchase order.
Says Claypool: “We’ll be looking to buy some additional machinery, but there are a lot of tools already here with which to work.”