Revere Ware Corporation - Company Profile, Information, Business Description, History, Background Information on Revere Ware Corporation

1000 S. Chermain Street
Clinton, Illinois 61727

History of Revere Ware Corporation

Revere Ware Corporation manufactures one of America's best-known brands of cookware. Its copper-bottomed pots, first brought out in the 1930s, are classic kitchen staples. The Revere Ware brand is estimated to have 25 percent of the U.S. market share for cookware. The brand sells at both department stores and at mass merchants. Revere Ware is owned by Corning Consumer Products, Inc., which also manufactures a variety of well-known cookware lines.

Early History

Revere Ware Corporation began as a division of Revere Copper & Brass, a metal company based in New York. Revere Copper & Brass was formed in 1928 from a merger of six small copper and brass companies. One of the six firms in the 1928 merger traced its roots back to the famed American revolutionary and silversmith Paul Revere. This company, Taunton-New Bedford Copper Company, had bought the assets of Paul Revere and Son in 1801. Another company in the 1928 merger, the Rome Manufacturing Company, also had a lengthy history. It had manufactured tea kettles and other housewares since 1892. But the principal products of Revere Copper & Brass were industrial, not housewares. The company manufactured copper pipes, bars, tubes, and sheets. Soon after its inception it was one of the largest copper manufacturers in the United States.

Revere Copper & Brass invented its famous cookware line in the 1930s, seeking to diversify away from strictly industrial products. At a time when most cooking was done in heavy cast-iron pots, researchers at the company attempted to make a lighter weight, easier to clean pot out of copper. The first Revere pots were copper with a chrome-plated inner lining. But this metal combination did not work well. Though copper was an excellent heat conductor and light weight, the chrome lining was easily scarred by acidic foods. Concentrated research at Revere Copper & Brass led to a new combination. The new pots were made of stainless steel, a light, durable, smooth, stain- and scratch-resistant metal. The company electro-plated copper to the bottom of the pot, to give great heat conductivity. The pot handle was made of plastic, an industry first. The design of the handle was based on a silversmith's hammer, and its curved knob was echoed in the rounded inner surface of the pot. Revere Ware, in development since 1932, debuted in 1939 at the Chicago Housewares Show. It was an instant hit, and this brand of cookware soon became the most profitable division of Revere Copper & Brass.

When the United States entered World War II, Revere turned its production over to war materials. The company had made copper and brass articles such as water pipes for plumbing, but in 1942 began making cartridge and rocket cases and smoke bombs. Production of housewares halted completely until the end of the war. Revere bought a new plant in Riverside, California, in 1948, and another in Clinton, Illinois, in 1950. These plants began to manufacture Revere Ware cooking pots, as metal quotas permitted. The company's other plants converted back to prewar production for a short time, but again made war materials when the United States entered the Korean War. Revere continued to make weapons during the Vietnam War. By the mid-1960s, Revere had dozens of plants, and was making sales of around $350 million annually.

Expansion in the 1960s and 1970s

In 1966 Revere Copper & Brass decided to diversify by investing in another metal, aluminum. The copper and brass fabricating industries had their ups and downs, with many cost factors the company could not control or predict. Aluminum seemed altogether a more profitable venture. Revere owned a 33 percent interest in Ormet Corp., a primary aluminum producer, so it already had some experience in the aluminum industry. Revere decided to make massive investments in aluminum through two projects. The company built an alumina refinery (alumina is the middle product between bauxite, a mined raw material, and aluminum) in Maggotty, Jamaica. And it also built an aluminum smelter and rolling mill in Scottsboro, Alabama. The aluminum industry was dominated by three large companies: Aluminum Co. of America, Reynolds Metal Co., and Kaiser Aluminum & Chemical Corp. In comparison to these large producers' plants, both Maggotty and Scottsboro were small, but Revere planned to increase capacity later. For example the energy contract the Scottsboro plant negotiated with the Tennessee Valley Authority allowed for the plant to triple in size. But both facilities were plagued with problems from the beginning. The Maggotty plant was poorly designed, small and inefficient, and the same was said of the Scottsboro plant. And the Scottsboro plant depended in part on delivery of alumina from Maggotty. Between 1966 and 1976 the company funneled about $240 million into its aluminum projects, and during this time, profits sank. Profits in 1966 were $22 million on sales of just over $350 million; 10 years later sales reached almost $500 million, but profits were a miniscule $2.2 million.

Not all the problems were due to the aluminum investments. Net income fell sharply in 1971, when copper prices tumbled and coal and copper strikes hurt the company. Revere posted a loss in 1972, in part because the company wrote off huge debts due to its Maggotty plant. The company was forced to cut back its production of copper in 1973 because it had difficulty securing low-priced copper scrap. Scrap prices were controlled in the United States, but American dealers were allowed to export copper scrap and sell it at much higher prices abroad. In 1973 copper scrap was selling for between 60 and 68 cents a pound in the United States, and for more than 95 cents a pound on the London Metal Exchange. Because of this sizable price differential, domestic dealers sold abroad, and companies like Revere Copper & Brass could barely secure enough scrap to keep going, even though demand for copper products was high.

To add to the company's difficulties, in 1974 the Jamaican government raised its levy on bauxite ore mined in its country, hiking the cost of Revere's Maggotty alumina plant considerably. Jamaica had been plagued by inflation, and badly needed cash. Six companies--Revere, Alcan, Reynolds Metals, Aluminum Co. of America, Kaiser Aluminum & Chemical, and Anaconda--had negotiated with the government for weeks in secret, trying to find a new tax formula that all could agree to, when Jamaica suddenly announced its own plan as final. The production levy increased from about 26 cents a ton to 50 cents a ton, plus a tax figured as a percentage of the U.S. price for aluminum ingot. This made Revere's Maggotty plant, already inefficient and costly to run, a complete money drain. Revere had worked out a deal with a consortium of six Japanese companies to invest in Maggotty, aiming to double the plant's production. The increase in size was supposed to finally make the plant cost-effective. But the Japanese consortium pulled out of the deal in the wake of the bauxite levy increase, and Revere was unable to finance the $160 million expansion alone. The company paid the bauxite levy "under protest," while continuing to hope for concessions from Jamaica. By August 1975, Maggotty had become too expensive to run, and the plant shut down. But as part of its contract with the Jamaican government, Revere needed to get permission for a shut-down, and it was still liable for taxes pegged at earlier production rates. The company offered to sell the Maggotty plant to the Jamaican government for $65 million, but the offer was declined. In 1976 Revere stopped paying its bauxite tax, and filed a court claim asking to be freed of further dues. The company also filed a claim with the Overseas Private Insurance Corp. (OPIC), an entity that insured American businesses from failure abroad due to government actions such as nationalization. Revere claimed the Jamaican levy amounted to expropriation of its plant. But Revere lost its cases both in the Jamaican court and with OPIC.

The other aluminum companies had larger facilities in Jamaica, and continued to function despite the higher tax. But Revere could not make Maggotty profitable. As it seemed unable to unload Maggotty, Revere put its Scottsboro aluminum smelting plant up for sale. Briefly, it seemed as if the whole company would be sold, and then a deal materialized with Alcan to buy the Scottsboro plant for $205 million. But the sale to Alcan, which was accepted in July 1977, was blocked in federal court for anti-trust reasons, and by December, the sale was off. Revere was left with facilities it could not afford to operate. Housewares was its only profitable division.

Reorganization in the 1980s

From here it was a quick slide to bankruptcy. Revere sold a portion of its aluminum building products unit in 1980, getting $10 million for it from Norandex, a Cleveland company. But it was still unable to sell Scottsboro, which it eventually shut down in 1982. The company sought Chapter 11 in November 1982, claiming "massive and continuing losses" from its aluminum operations. Revere had a loss of $21.3 million in the first half of 1981, on sales of close to $320 million. Under Chapter 11 of the federal bankruptcy laws, the company was allowed to continue operating while it tried to pay its debts. In 1983 Asarco, the huge metals conglomerate which had owned 33 percent of Revere, sold its share to Bear, Stearns & Co., a New York investment firm, for $17 million.

The only profitable portion of Revere continued to be its Revere Ware brand housewares. The division's sales were estimated at about $54 million in 1977, and were up to $80 million by 1984. In 1985 Revere Copper & Brass announced that it would sell its housewares division, and asked $100 million for it. Considering that a third of the entire company had gone to Bear, Stearns for only $17 million a few years earlier, the price seemed extraordinarily high. After a few months, Revere announced that, though there were several interested parties, it no longer wished to make the sale. The company decided to make some improvements in the housewares business and its organization, and to hold on to it. In 1986 Revere consolidated its housewares unit with two related units, Revere Foil & Containers, Inc. and Revere Ware Courtesy Stores, Inc., into one subsidiary company, called Revere Ware, Inc. The new subsidiary was based in Clinton, Illinois, the location of the main Revere Ware manufacturing plant. The other plant that had made Revere Ware, in Rome, New York, was shut down. At almost the same time the new subsidiary was formed, Revere Copper & Brass submitted to a takeover by a Florida venture capital firm, Oxford Financial Group. Oxford had already bought up over 40 percent of Revere's stock. Its takeover preempted a leveraged buyout by a New York-based investment group that included Revere's chief executive officer.

Under new ownership, Revere Ware embarked on an ambitious program of brand expansion. The Revere Ware brand was extended to cutlery and small appliances. Revere Ware marketed a gourmet line of pots and pans, retailing for around $200, in an effort to capture the high end of the market. There was even a Revere Ware microwave oven. The company invested in updated packaging, and tried to give the overall brand a more innovative, high-tech image. The aggressive product development and exploration of new markets brought Revere Ware record sales and profits. With this success, Revere Ware's parent again put the division up for sale. While $100 million had seemed too much two years earlier, in 1988 Revere Copper & Brass was able to divest its housewares unit for an even better price. The well-known glass cookware manufacturer Corning Glass was happy to pay an estimated $120 million for Revere Ware. The sale to Corning was finalized in April 1988.

New Life as a Subsidiary in the 1990s

Revere Ware came under the umbrella of Corning's Consumer Products division, which already made some of the best-known American cookware brands, including Pyrex, Corning Ware, and Visions. These were all glass products. Revere Ware complemented Corning's line nicely by being its only metal cookware brand. Corning had researched Revere Ware well before buying the unit. Consumer surveys had told the company that the Revere brand was extremely well-known, despite little advertising. Consumers considered the brand old-fashioned, though they also identified Revere Ware with quality and durability. Corning worked to expand the new image Revere Ware had been promulgating before it was bought. Under Corning's management, Revere Ware developed its Pro-Line, a high-priced stainless and copper line for the upscale market, as well as a lower-priced classic line for the mass market. Both the upscale and lower-priced lines were immediately successful. Corning also backed Revere's new products with print advertising, something that had not been done much previously. In its first year under new ownership, Revere Ware saw big jumps in sales of some items, such as a 52 percent increase in tea kettles, and an increase of almost 60 percent in sales of its aluminum-disc cookware.

By 1994, Revere Ware had about equal penetration in upscale department stores and in mass markets. The brand dominated the stainless steel cookware market, and was a presence as well in aluminum cookware. Revere offered over a hundred different items, mostly in cookware. In 1994 Revere licensed its name to a line of non-stick bakeware manufactured by G & S metal products, in an effort to gain exposure in that category as well. The company continued to spend money on print advertising, and to bring out new cookware sets aimed at specific consumer groups. For example in 1995 Revere brought out a set of stainless steel cookware that was relatively low-priced--under $100--but designed for sale in department stores. Updated safety features as well as plainer packaging were designed to capture the tastes of 25- to 39-year-olds. Print advertising for this new line alone was estimated at over $5 million in 1996, and the line was also supported with in-store demonstrations, literature, and training programs. The company also paid "selling specialists"--sales people subsidized by Revere to focus on Revere products during key sales periods. Under Corning, Revere seemed to be improving on the marketing inroads the company had started in the mid-1980s, as the old-fashioned brand continued to innovate and expand.

Additional Details

Further Reference

"Alcan Unit to Drop Bid for Revere Facility," Wall Street Journal, December 20, 1977, p. 31."Asarco Completes Sale of Revere Copper Stake," Wall Street Journal, January 13, 1983, p. 46.Casey, Lisa Ann, "Corning Hones Department Store Strategy," HFD, May 29, 1989, pp. 82-85."Chapter 11 for Revere," Business Week, November 8, 1982, p. 50.Cook, James, "Staying on Top," Forbes, July 1, 1977, pp. 54-56.Ellis, Beth R., "Corning Buy Boosts Lines, Distribution," HFD, May 9, 1988, pp. 1-2.Gupta, Udayan, "Revere Copper Accepts Lower Bid Due to Tax Law," Wall Street Journal, November 19, 1986, p. 12.Harris, Roy J., Jr., "Jamaica Proposed Bauxite Legislation to Produce $200 Million Over 13 Months," Wall Street Journal, May 17, 1974, p. 3.Jordan, Carol L., "Revere Copper Decides to Keep Ware Div.," American Metal Market, October 29, 1985, pp. 1-2.------, "Revere Copper Mulls Sale of Ware Div. in Ill., N.Y.," American Metal Market, August 29, 1985, pp. 1-2."National Steel Is Negotiating to Buy Revere," Wall Street Journal, January 31, 1977, p. 11.Perry, Brian, "Cameron Joins Revere Ware; Sets 'Aggressive' Product Development Course," HFD, September 21, 1987, pp. 57-58.------, "Revere Entering Kitchen Appliances: Cookware Firm Forms New Unit," HFD, November 2, 1987, pp. 1-4.Rappleyea, Warren, "Corning Glass' Acquisition of Revere Ware Tagged at $120M," American Metal Market, May 3, 1988, p. 2."Revere, American Smelting Report '71 Profit Skidded," Wall Street Journal, January 2, 1972, p. 13."Revere Copper & Brass to Write Off $8,350,000 in Alumina Plant Costs," Wall Street Journal, January 2, 1973, p. 4."Revere Copper Is Withholding Payment of Jamaican Tax on Bauxite Production," Wall Street Journal, April 21, 1976, p. 11."Revere Copper Reports a Loss for 4th Period," Wall Street Journal, February 13, 1976, p. 10."Revere Forced to Cut Copper Production Due to Scrap Difficulties," Wall Street Journal, August 16, 1973, p. 20."Revere's Sale Blocked," Business Week, December 26, 1977, p. 44."Revere Sells Portion of Unit to Norandex," Wall Street Journal, August 11, 1980, p. 22."Revere's Woes Blamed on Market, Government," Iron Age, November 10, 1982, p. 69.Schwartz, Judith D., "How Corning Inc. Prevented Revere Ware from Going to Pot," Adweek's Marketing Week, October 23, 1989, pp. 76-77.Stankevich, Debby Garbato, "Revere Name Due on G&S Bakeware," HFD, April 18, 1994, p. 149.------, "Revere's Solutions: $99 Cookware for Department Stores," HFD, November 20, 1995, pp. 27-28."Upscale Cookware, Cutlery Goods from Revere to Bow," HFD, September 21, 1987, pp. 73-74.

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