1326 Willow Road
JWA will be an entrepreneurial company engaged in outdoor recreation markets. As such, we will be end-user focused and decisive in action. JWA will bring innovation to the marketplace in increasingly rapid fashion; will concentrate on remaining lean in structure, yet be flexible enough to move quickly to respond to competitive actions; and will continue to deal ethically in all aspects of our business.
Johnson Worldwide Associates, Inc. manufactures, markets, and distributes a wide range of its own brand-name recreational products, including Minn Kota and Neptune battery powered boat motors, Mitchell fishing rods, Johnson reels and spoons, Beetle Spin lures, Eureka! and Camp Trails camping tents and backpacks, Silva field compasses, Jack Wolfskin outdoor gear, Old Town canoes and high-performance kayaks, and Scubapro and SnorkelPro underwater diving gear. Although the company headquarters is located in Mount Pleasant, Wisconsin, a rather sleepy and quaint small town in the heart of the American Midwest, recently the firm has made a commitment to expand its operations, and presently counts a growing number of manufacturing facilities and distribution centers not only in the United States, but in such countries as England, France, Spain, Belgium, Canada, Hong Kong, Italy, Switzerland, Germany, Sweden, Austria, Australia, Mexico, and Japan.
During the late 1960s and early 1970s, Johnson Wax (S.C. Johnson & Son, Inc.) initiated a diversification strategy similar though not identical to the diversification programs being carried out by many Fortune 500 companies. The plan was to acquire a group of small to medium-sized firms that were manufacturing recreational products with recognizable brand names, and form them into a recreational products division. Based largely on the fact that Samuel C. Johnson, the owner of the $2 billion Johnson Wax empire, was known as a sports enthusiast, the company initially purchased a small electric motor boat and fishing reel manufacturer located in Minnesota. Yet, even though the new recreational products division grew due to the help provided by the marketing network and management ability of Johnson Wax, as the division prospered it came into competition with consumer and institutional products groups for a larger share of the parent company's resources.
Confident that the recreational products division could stand on its own, company management and the Johnson family decided in the mid-1980s that it was time for the division to function as an independent company. The newly named Johnson Worldwide Associates was spun off from parent company Johnson Wax by means of a leveraged buyout to Samuel C. Johnson and the Johnson family. The buyout amounted to just over $66 million, with the Johnson family maintaining a 42 percent investment interest, but a 72 percent majority voting interest. Within two years, the company had firmly established itself in the fishing equipment and camping equipment markets, and the Johnson family thought an IPO was the next step in the firm's growth. Thus in 1987, just a short time after its spinoff from Johnson Wax, the small but growing Johnson Worldwide Associates went public in order to have access to the capital market and to establish a market value for the company's stock.
Having received an enthusiastic welcome from the traders and investors on Wall Street, Johnson Worldwide stock was initially offered to the public at $15.50 per share. Almost overnight, the company raised $25 million, which was used quite wisely to pare down its debt. Unfortunately, the stock market crash of October 19, 1987 occurred one week after the company's initial public offering and sent its share price spiraling downward out of control. The company lost 50 percent of its share value within a few days. Yet management decided to make another offering of common stock available a short ten months later and, with its solid product line in fishing gear and camping equipment, Johnson Worldwide Associates soon recovered.
Growth and Expansion
By the end of the 1980s, the company was making its brand-name Johnson fishing reels, Minn Kota electric fishing motors, Old Town canoes, Eureka! Tents, and Camp Trail backpacking gear. The company was so successful that its Minn Kota electric fishing motors had captured a 70 percent share of the entire market within the industry, with sales of approximately $80 million for 1989. In addition, the firm's diving equipment, sold under the brand name Scubapro, had achieved record sales and, as a result, management at Johnson Worldwide Associates decided to invest heavily in the manufacture, distribution, and sale of diving gear and marine equipment throughout Europe. From the company's spinoff in 1985 to 1990, operating profits increased at an annual rate of 35 percent. With $232 million in sales for 1989, Johnson Worldwide Associates was named one of the best small companies in the United States by Forbes magazine.
During this time, the company made one of its first overseas acquisitions, a fishing reel manufacturer in Cluses, France, named Mitchell Sports, S.A. Mitchell Sports was one of the most revered manufacturers in the sporting goods industry, mostly due to the regard with which serious fishermen held the company's Mitchell 300 fishing reel. First introduced in the early 1950s, the reel had never fully taken advantage of its popularity among fishermen in the United States, but Johnson Worldwide immediately developed new brochures, television commercials, and displays to market an updated version of the Mitchell 300 fishing reel. Not surprisingly, the product became one of the bestselling items in the company's history.
By 1992, the company's net sales had increased to $334 million, with 43 percent of the total resulting from sales outside the United States. The purchase of Jack Wolfskin one year earlier, a German firm that manufactured backpacks, camping tents, and outdoor clothing, was a large part of the company's rising fortunes in Europe. New models of its camping tents, fishing reels, and canoes were soon warehoused at a new Wolfskin facility in Germany, and sales began to increase at a dramatic rate. Old Town Canoes, one of the firm's most successful product lines throughout North America, was just as popular in Europe. The diving and marine businesses of Johnson Worldwide Associates produced over 70 percent of their sales outside the United States, and new models for diving masks and rubber goods sold particularly well throughout Europe's Scandinavian countries.
Augmenting the company's recreational products line was its development of a marking products business, which included such items as hand stamps, ink rolls, ink jets, and other office equipment. In 1989, management had made a significant investment in developing technology for bar coding systems, equipment for check processing, highspeed addressing, and postal coding. By the early 1990s, this strategic investment began to pay dividends, with sales increasing at a rate of ten percent annually, and marking products totaling approximately 20 percent of the company's overall sales. Once again, European operations played a major role. The largest hand stamp facility of the company was located in Sweden, with the majority of sales in that and neighboring countries.
Unfortunately, the company's strategy for growth was flawed, and resulted in major financial repercussions during the mid-1990s. Seeking to expand its operations and revenues quickly through a series of acquisitions, management had overextended itself. Earnings dropped precipitously, and management was forced to make drastic decisions. Many of the companies purchased during this time were sold off. In addition, the company made a strategic decision to streamline its operations, thus requiring the sale of its entire marking products business.
Since Samuel C. Johnson, the owner of Johnson Wax, was involved in establishing the company and running it, he had incorrectly assumed that it could be developed in much the same fashion as his first entrepreneurial effort. What this meant was that a core business would provide a steady flow of cash and additional investment and expansion capital, while other businesses could be added or sold depending on their profitability. But the corporate sector had changed enormously since Samuel Johnson had established Johnson Wax, and the same strategies for growth and expansion were no longer applicable. After going through a number of different CEOs and presidents, the old warrior was still smart enough to recognize his mistakes and change course.
What this meant was that Johnson Worldwide Associates required a comprehensive restructuring from a holding company with numerous but unrelated businesses working mostly independently of one another to an efficiently run operating company whose core business was the manufacture and marketing of a complete line of recreational sports products and clothing. By 1995 earnings had rebounded, and company management was focusing on the development of new products, such as electronic diving equipment and camping gear. A new president and chief executive officer, Ronald Whitaker, was hired to guide the company's product development, and to implement a long-term, but more cautious, acquisitions program that would enhance its position in many of the recreational products markets.
By the end of 1997, the company's focus had been narrowed to five core product markets, including fishing rods, reels, and lures; electric boat motors, speedometers, marine and automotive compasses, and weather instruments; diving equipment and accessories such as regulators, masks, fins, wet and dry suits, gloves, dive belts, dive computers, snorkels, and buoyancy compensators; outdoor equipment such as camping tents, backpacks, commercial tents, bicycling gear, sleeping bags, field compasses, and outdoor clothing; and watercraft, including canoes, kayaks, paddles, and oars. Although sales were holding steady, amounting to just over $300 million at the end of fiscal 1997, management was optimistic that a few well-chosen, strategic acquisitions would increase that figure. To this end, in July 1997 management purchased Plastiques L.P.A. Limitee, a privately owned firm located in Canada that was widely regarded as one of the premier makers of high-quality kayaks in the country; Uwatec AG, a German-based manufacturer of diving computers and other electronic equipment; and Ocean Kayak, Inc., another Canadian-based producer of kayaks which had been identified as one of the fastest-growing recreational products firms throughout North America.
Johnson Worldwide Associates regarded itself as a well-integrated, global outdoor recreational products company; nonetheless, management was still searching for just the right product mix to ensure its continued growth. Johnson did, however, think it had found the right leadership in the person of Helen Johnson-Leipold, who came on board as chair and CEO in March 1999. Johnson-Leipold had most recently served as vice-president for worldwide consumer marketing under S.C. Johnson & Son.
Principal Subsidiaries: Airguide Instrument Co.; Johnson Camping, Inc.; Johnson Fishing, Inc.; Old Town Canoe Co.; Seaco/Elliot, Inc.; Under Sea Industries, Inc.