60 Main Street
Remington Products Company, L.L.C. designs, manufactures, markets and distributes men's and ladies' shavers, grooming and personal care products, and travel appliances on a worldwide basis.
Incorporated in 1979, Remington Products Company, L.L.C. boasts a heritage that links it to legendary gunsmith Eliphalet Remington and Remington Arms Company. Remington Products is best known for its electric shavers, which dramatically increased in visibility and market share after then owner Victor Kiam turned television pitchman. Although the Kiam family retains a majority interest in privately held Remington Products, the board of directors is controlled by Vestar Capital Partners, a New York buyout firm, the result of a refinancing of the company forced upon Kiam in 1996. In addition to shavers for both men and women, Remington Products offers a variety of personal care and grooming products and travel appliances. With its global headquarters located in Bridgeport, Connecticut, the company maintains operations in ten other countries and sells its products throughout the world. It also runs more than 100 retail stores located in the United States, the United Kingdom, and Australia.
Making Guns: Early 1800s
Eliphalet Remington, Jr., was the son of a New York farmer who had his own forge and blacksmith shop that was used to build and repair farm equipment. Remington became so skilled with the forge that when he could not afford a hunting rifle he was able to make a gun barrel out of scrap iron. To have the barrel rifled (scored on the inside with spiral grooves) and stocked, he turned to a gunsmith, who was so impressed by Remington's handiwork that he encouraged the young man to produce more gun barrels. This side work done on the family farm grew to the point that by 1828, when his father died, Remington was producing complete rifles. He built a gunshop near the newly opened Erie Canal, and along with his three sons developed a thriving business, its success fueled in large part by the introduction of the Remington pistol in 1847. Remington was also interested in producing other products, and in 1856 began manufacturing farm equipment. In that same year, the company became known as E. Remington and Sons. With the advent of the Civil War, the company was so inundated with Union Army contracts for firearms that Remington's health was compromised and he died at the age of 68, leaving the business to his sons.
Even after the Civil War ended, the Remington business continued to grow as a major international gunmaker, but it also manufactured a number of other products and earned a reputation as an inventor-friendly company. It ventured into such areas as sewing machines, lathes, burglar alarms, gasoline-powered engines, and pill- and tablet-making machines. One of the inventors who turned to Remington was Christopher Latham Sholes, who developed the first practical typewriter. The machine, which soon became known as the Remington, went on the market in 1874. The Remington company suffered some major financial setbacks in the 1880s and went bankrupt in 1886. It sold its typewriter business, along with the right to use the Remington name, to the Standard Typewriter Manufacturing Company.
In 1902 Standard Typewriter would reorganize and be renamed the Remington Typewriter Company. It would then merge with the Rand Kardex Company in 1927 to become Remington Rand Co. In addition to typewriters, Remington Rand manufactured adding machines, filing cabinets, punch card tabulating machines, as well as other office equipment. In 1936, at the height of the Depression, the company turned in a different direction, establishing the Remington Electric Shaver Division. The electric "dry" shaver had been invented by Colonel Jacob Schick, who was so obsessed with it that he sold off a company that produced the Magazine Repeating Razor, his invention that anticipated the injector razor, in order to fund his new business. His first electric shaver went on the market in 1929, but it was not until 1931 that he introduced the first successful model. Remington Rand began selling its first electric shaver, the model E Close Shaver, in 1937. The Remington Dual, the company's first two-headed shaver, was brought out in 1940, followed the next year by the Foursome, the first multiheaded shaver with a trimming head.
Remington Rand became involved in the computer business in 1950 when it acquired Eckert-Mauchly Computer Company, founded by the developers of the legendary UNIVAC computer, which Remington Rand would deliver to the U.S. Census Bureau two years later. It was also during this period that retired General Douglas MacArthur, after giving up on his political ambitions in 1952, served as chairman of the company. MacArthur essentially held a ceremonial post, mostly announcing dividends and making banquet speeches to business organizations. In 1955 Remington Rand merged with Sperry Corporation, becoming Sperry Rand Corporation. Originally founded in 1933 to develop aircraft instruments, such as the automatic pilot, Sperry was interested in Remington Rand because of its computer business, not its shavers. Nevertheless, the Remington Shaver Division of Sperry Rand continued on. In 1960 it introduced the first cordless shaver, the Lektronic, which relied on rechargeable nickel cadmium energy cells.
One of the major strengths of Sperry Rand was its emphasis on engineering, which was a mixed blessing for the Remington Electric Shavers Division. Although it developed a product that was considered to be superior to its rivals, the company introduced new models so frequently that its marketing suffered. Retailers, wary that Remington shavers would become obsolete in a short period of time, were reluctant to keep a large inventory. Category leader Norelco, by offering a stable product line, outsold Remington four to one. Furthermore, Remington Shaver models were numbered and preceded by XLR or PM, which may have been considered sexy by the engineers but had proved less than seductive to consumers. By the late 1970s, after losing some $30 million in three years, the division was put on the auction block. A number of suitors stepped forward, but Sperry Rand opted to sell to the least likely of the candidates, a man who did not even have his financing in order. His name was Victor K. Kiam II.
Kiam grew up in New Orleans, where his first exposure to business came at the age of eight when he began selling Coca-Colas for a dime at a streetcar stop, a venture that failed when he gave away too much of the product. Following a stint in the Navy he earned a bachelor's degree from Yale and a certificate of languages at the Sorbonne (University of Paris), followed by an M.B.A. from Harvard. He joined Lever Brothers as a management trainee in 1951 and drifted into sales when he stepped in for an injured salesman, working his way up to various marketing management positions. He later went to work for Playtex, eventually becoming the president of its Sarong division. In 1968 he bought the Benrus Watch Corp. and became the company's chief executive officer. After leaving Benrus, he was looking for a new venture when he learned that Remington was for sale. After some study he realized that Remington sold a wide variety of products, but he decided to focus on the electric razor business. His wife chided him for even thinking about getting involved with a product that he had never used, prompting him to reply that he had never worn a brassiere but had done pretty well at Playtex. The next day she gave him a Remington shaver, which, as he would later say many times, gave him the best shave he ever had. He bought rival electric shavers and conducted his own comparison tests, eventually satisfying himself that Remington had the best product on the market.
Establishment of Remington Products: 1979
Although Kiam had limited funds, Sperry executives considered him the candidate best suited to run Remington and worked with him to fashion a $25 million leveraged buyout in 1979. Kiam then created Remington Products Incorporated to run the business. Once in charge, he quickly instituted a number of changes. He trimmed staff, mostly at the management level, then assured the workers on the factory floor that their jobs were secure. Furthermore, executive washrooms were closed and everyone now shared the same medical and profit-sharing plans. Kiam cut back on the product line and renamed and repackaged the shavers. He introduced a lower-price shaver and rescinded a price increase on higher-end shavers, planned by prior management, in order to gain a price advantage over rivals. Overseas plants were shut and operations centered in Bridgeport. Kiam also reinstated an old slogan, "Shaves as close as a blade or your money back."
Kiam achieved solid results almost immediately. He was able to pay off bank loans and notes with Sperry well ahead of schedule. After selling one million shavers in 1979, Remington Products would be selling three million by 1983. A large measure of that success could be attributed to the company's legendary television ad campaign that featured Kiam proclaiming that he liked the Remington shaver his wife gave him as a present so much that he decided to buy the company. According to Kiam, he turned company pitchman purely by accident. Shortly after taking over Remington Products he flew to England to discuss possible television commercials for the British market. After he and the advertising agency failed to agree on a concept, Kiam was asked how he came to buy Remington Products. Judging by the interest of his audience as he told how his wife bought his first Remington shaver, Kiam wondered aloud if the British public might be interested as well. While the agency wanted to hire a famous soccer star to tell the story, Kiam announced that because it was his story he was the only man for the job. After a favorable test market, Kiam's first commercial premiered in England on November 1, 1980, resulting in a dramatic surge in sales. A version of the commercial was then released in Australia, France, Norway, Canada, and Hong Kong. It was not until 1981 that the Kiam commercial appeared on television in the United States, and not until the end of the year that the pitch began to take hold. In time, Kiam would tape a multitude of follow-up commercials, shot in his office bathroom to save money. He claimed to be able to knock off 15 commercials in a day, and that he knew 29 seconds worth of 15 different languages. Other chief executives, such as Chrysler's Lee Iacocca, would soon try to emulate Kiam's success.
Not only did the Remington commercials increase shaver sales, as the company doubled its market share within several years, they made Kiam into a national celebrity. With that came a book deal. In 1986 Kiam penned a best-selling business book, Going For It! How to Succeed As an Entrepreneur, published by William Morrow. It was followed up by Live to Win: Achieving Success in Life and Business. Kiam gained even more prominence in 1988 when, bolstered by money from businessman Fran Murray, he was able to buy the New England Patriots of the National Football League for $85 million. A few years later it was Kiam's celebrity and his football team that led to problems for both Remington Products and its flamboyant owner.
Flourishing in the 1980s, Trouble in the 1990s
Remington Products became a fast-growing consumer products company in the 1980s. While its share of the men's electric razors market continued to grow, Remington Products ventured into electric shavers for women and quickly built a category leader. It also introduced a home hair cutting kit, as well as products that went outside of personal grooming, such as a pool alarm and a Vic Vac carpet cleaner. In 1987 Remington Products acquired the Fransus Co. to expand into the travel appliance and travel accessory business. By the end of the 1980s the company was generating approximately $250 million in annual revenues, although the products outside of electric razors contributed little to the business. Moreover, the market for men's electric razors was becoming stagnant; it appeared that the only men buying new shavers were those replacing old ones.
Kiam had hoped that his Patriots would create synergy with Remington Products, but little came from the use of football pitchmen, such as the team's star quarterback, Tony Eason, or Doug Flutie who had gained national attention at Boston College by winning the Heisman Trophy as the nation's best college quarterback. The Patriots also proved to be a drain on Kiam's own finances, which were especially hampered by a stadium lease that granted him nothing more than ticket sales. Then Kiam's image suffered greatly after he got caught up in a well-publicized incident after several Patriots players taunted a woman sportswriter named Lisa Olson in the team locker room in September 1990. Kiam was quoted as calling Olson a "classic bitch," a remark he denied making, although he did issue a general apology. A few months later, however, Kiam was caught telling an off-color joke involving Olson at a sports banquet. The National Organization for Women had already called for a boycott on Remington Products, so this new remark only made matters worse for both Kiam and Remington. At the same time, the nation of Canada charged the company with airing misleading commercials, making performance claims that could not be substantiated, namely that the Remington shaved closer than other electrics. Because he appeared as a spokesman in the commercials, Kiam was cited along with the company and potentially faced five years in prison under Canada's Competition Act. Eventually the matter was settled when Remington paid a fine of C$75,000.
Sales were falling for Remington, dropping 20 percent between 1989 and 1990, from $250 million to $200 million, prompting Kiam to hire a turnaround expert who began instituting administrative cuts. Kiam faced further difficulties in 1991 when Murray exercised an option in the Patriots deal that allowed him to leave after three years with a guaranteed profit of $13 million on his $25 million stake, forcing Kiam to come up with $38 million in a matter of weeks. Essentially he had to choose between Remington Products and his football team. In the end, Kiam chose Remington Products and sold his interest in the Patriots. Nevertheless, the losses he incurred running the Patriots had an adverse effect on his ability to maintain ownership of Remington Products.
Kiam refinanced Remington in 1992, turning in particular to New York investor Isaac Perlmutter. He also received a $15 million loan from the state of Connecticut, which was anxious to retain jobs. In 1993 Remington Products again looked to diversify its product offerings by acquiring the hair-care appliance business of Bristol-Myers Squibb Co. A former division executive, F. Peter Cuneo, who had gone on to become president at Black & Decker, was hired as the president and chief operating officer of Remington Products. With the Bristol-Myers products, he began to move the company to a younger, more contemporary style. As part of this makeover, Kiam's image was removed from all packaging and advertising. Soon, in fact, he would no longer run the company.
In 1995 attempts by Sunbeam-Oster Co. to purchase Remington Products failed. A year later, however, Vestar Capital Partners acquired a nearly 40 percent stake in the company, equal to Kiam's, but as part of the deal also gained control of the board of directors. Kiam remained as nominal chairman of the board but he no longer ran the company, which was reorganized as Remington Products Company, L.L.C. Vestar was started by seven founding partners in 1988, run by CEO Dan O'Connell. In January 1997 Vestar brought a new management team to Remington Products, headed by a former executive at Clorox, Neil DeFeo, who also had 25 years of experience with Procter & Gamble.
New Leadership for a New Century
Under DeFeo, Remington Products underwent a three-year plan to revitalize the company's fortunes, cutting costs and jobs while unveiling a large number of new products. In January 2000 the company reorganized into two operating divisions: Remington Shaving and Grooming, and Personal Care and Wellness. While the company posted losses of $4.5 million and $15.3 million in 1997 and 1998, revenues grew. In 1999, sales reached $318.8 million and Remington Products returned to the black with a net profit of $6 million. In 2000, revenues grew to $365.1 million and net profits totaled $12.7 million. The company was clearly striding forward. A few months after announcing its 2000 results, however, its longtime chairman, Victor Kiam, died of a heart condition at the age of 74. "He was a wonderful man and he'll be missed by many people," DeFeo commented, according to a Times Union obituary. "And he made a difference in American business."
Principal Divisions: Remington Shaving and Grooming; Personal Care and Wellness.
Principal Competitors: Applica; The Gillette Company; Philips Electronics North America Corp.