Stearns, Inc. - Company Profile, Information, Business Description, History, Background Information on Stearns, Inc.



1100 Stearns Drive
Sauk Rapids, Minnesota 56379-2522
U.S.A.

Company Perspectives:

Stearns is committed to total customer satisfaction through the dedication of all employees to excellence. The pathway to excellence is comprised of our focus on the continuous improvement of products and services while realizing long-term profitability.

History of Stearns, Inc.

Stearns, Inc., a subsidiary of K2 Inc., is a leading manufacturer of moderately priced recreational and industrial water safety and water sports products. Through its six major product lines, Stearns offers a diverse range of items for the outdoors and water sports enthusiast. The company's divisions include: Stearns Water Sports, manufacturing personal flotation devices (PFDs), wetsuits, and swim and dive products; Stearns Outdoors, marketing inflatable kayaks, self-inflating sleeping pads, waterproof bags, and hydration water filters; Mad Dog, offering hunting backpacks, daypacks, and other accessories; Fly Tech, featuring rubberized fishing waders, boots, and related gear; Stearns Industrial Safety, manufacturing cold-water immersion and rescue suits as well as Drywear rainsuits and work vests; and Goldeneye Marine, producing watersport ropes and dock and anchor lines.

The Early Years

In 1927 a Minnesotan named William P. Hilger began a small company which he named the Minnesota Sales Corporation. He had invented an accessory for advertising on the back of a motorcar. Hilger's first product, the Kar-onof-ad, proved unsuccessful, but he persisted and within the year turned to the manufacture of another automotive accessory, the frost shield. In an age when car heaters were primitive at best, the frost shield—an electrically heated and vacuum-sealed barrier between a motor car's windshield and the natural elements—was essential to safety in cold climates. The development of the frost shield and innovations related to it turned the Minnesota Sales Corporation, now renamed Hilco, into one of the fastest growing companies in central Minnesota in the early 1930s.

Throughout the 1930s and into the early 1940s Hilco's frost shields were in demand all over the United States. General Motors contracted Hilco to produce special brands for their vehicles, and other customers from as far away as California and Maine kept the company adding employees to keep up with demand. By 1936 Hilco had produced more than a million frost shields, sometimes turning out as many as several thousand shields a day. Government contracts with Hilco during World War II and for construction vehicles creating the Alaskan Highway were to follow.

Amidst the war, in 1943, Hilco's automotive accessory division was sold to B. Howard "Pat" Flanagan and Maurice O'Link. O'Link had been in charge of frost shield operations at Hilco for five years before teaming up with Flanagan to purchase the company. O'Link, a chemical engineer with a degree from the University of Minnesota, served as the company's general manager for many years. Flanagan had entered officers candidate school and was stationed at Fort Snelling in St. Paul and, upon release from his commission following the war, got involved with company operations.

A Shift in Direction

The new company was named Stearns Manufacturing Company, after the central Minnesota county in which it resided, and with the new name and leadership the company took a new direction as well. The improved heating systems in cars and trucks in the 1940s and 1950s greatly affected the sale of frost shields nationwide. With decreasing demand for the company's core product, O'Link turned to the manufacture of plastic products, an area in which, because of his degree in chemical engineering, he had some expertise. The developing plastics industry was in its genesis and to O'Link and Flanagan, whose frost shield business was quickly becoming an anachronism, manufacturing plastic products was forward-thinking.

Like Hilger, the duo of O'Link and Flanagan allowed local influences to determine their company's product development. While Hilger was strongly motivated by the cold Minnesota climate in his development of the frost shield, O'Link and Flanagan were influenced by the hunting and fishing culture of their central Minnesota surroundings. The two moved the company production into outdoor and recreational gear.



The early products manufactured at Stearns were vinyl gun cases, sleeping bags, and plastic products for camping and hunting. Stearns Manufacturing also took the lead in producing plastic marine products, particularly life jackets, water ski belts, and plastic boat interiors for pontoon boats, another local industry. This shift toward sporting/leisure goods continued to define Stearns for the next half century.

A change in law in the 1960s made a huge impact on the St. Cloud area company. The Federal Boat Safety Act of 1971 allowed manufacturing companies to develop new designs for PFDs as long as they were consistent with U.S. Coast Guard guidelines. This resulted in the manufacture of more Type II PFDs—the bright orange, front-fastening, and cumbersome life jackets with which most people are familiar—but it also allowed for new innovations in the industry.

In 1973 Stearns designed what proved to be its most enduring success—the Type III PFD. The new design met federal regulations but more importantly it was comfortable, which meant that consumers would use it. This particular design was that of a zippered vest that kept the swimmer afloat equally as well as the Type II design but without having the swimmer's neck area so restricted. Stearns Manufacturing's Type III PFD was lauded as a reason for the decline of boating-related fatalities nationwide.

Part of a Conglomerate: 1988

Stearns Manufacturing Company was a leader in producing recreational gear, so it came as little surprise when in October 1988 Anthony Industries, a California company specializing in recreational products, bought it. Anthony Industries began as a swimming pool manufacturer and diversified to include two major business operations: recreational products and industrial products. In adding Stearns Manufacturing, Anthony Industries further diversified its recreational holdings, which already included K2 skis, Hilton active apparel, Shakespeare fishing gear, and its original pool division.

In the early 1990s Anthony Industries sold off its pool division and renamed itself K2 Sports (later, K2 Inc.). This was in large part due to K2 skis, the company's most internationally recognized brand name.

Despite operating under K2's corporate structure, Stearns, Inc., as it was now called, maintained its regional production and identity. All four of Stearns's manufacturing facilities were within a 100-mile radius of the company's headquarters in Sauk Rapids, Minnesota. The Sauk Rapids facility, in addition to the company offices, provided warehousing, manufacturing, and distribution. The close proximity of the manufacturing plants to Stearns's headquarters allowed regular monitoring of all aspects of operations and firm quality control over its product lines.

Throughout the 1990s sales for the company remained strong, in part through the development of new merchandise. Stearns Outdoors experienced great success with its towable rubberized rafts and its inflatable kayaks. The 1990s saw an increase in the use of rubber inner-tube-like rafts for recreational use with boats, snowmobiles, and personal watercraft. Stearns inflatable kayaks proved successful in the outdoor sporting goods market, with sales exceeding expectations. The profit Stearns turned with these products helped to boost the company, making up in part for losses in K2's inline skate and ski sales.

According to company sources, Stearns as it entered the 2000s was distributing the following products: personal flotation devices; wetsuits; inflatable towables; swim and dive products; marine products; self-inflating sleeping pads; waterproof, floatable dry bags; SunShower products; hydration/water filters; hunting packs and accessories; work vests; flotation jackets and coveralls; ice rescue suits; cold water immersion suits; and waders and boots.

Stearns appeared to be a steady company that had developed a significant keystone product with the type III PFD. Its many divisions seemed situated to address the interests of the outdoor sports enthusiast. Most significantly, throughout its history, new product development at Stearns appeared to be closely following and sometimes anticipating market trends while meeting with a good measure of success. The fact that in April 2001 the company closed two of its four manufacturing plants was not necessarily indicative of declines in revenues or earnings. The bulk of Stearns's workforce, housed at its main offices and production site in Sauk Rapids, remained intact, dedicated to further strengthening the Stearns brand name through quality sporting, recreational, and leisure products.

Principal Divisions:Stearns Water Sports; Stearns Outdoors; Mad Dog Gear; Fly Tech; Industrial Safety; Goldeneye Marine.

Principal Competitors:Eastman Outdoors; The North Face, Inc.; Sealine; Sierra Designs, Inc.; Johnson Worldwide; Recreational Equipment, Inc.

Chronology

Additional Details

Further Reference

"Anthony Industries Announces the Acquisition of Stearns Manufacturing, Inc.," Business Wire, October 13, 1988.Bamett, Chris, "Anthony Industries: Combining R & D with Luck," California Business, January 1992, p. 12."Branch Is Sold," St. Cloud Times, May 18, 1943."Firm Triples Size in Three Years, Material Shortage Hits Stearns Manufacturing Company," St. Cloud Times, January 26, 1946.Halena, Sue, "Stearns Inc. Closes Paynesville, Carlton Plants," St. Cloud Times, April 1, 2001, p. 1B."K2 Can Do," Forbes, January 22, 1990, p. 156.McEvoy, Christopher, "Acquiring Minds," Sport Goods Business, August 1995, p. 44.Mehlman, William, "Anthony Synthesizes Winner from Pools, Skis, Industrials," Insider's Chronicle, June 12,1989, p.1.Paris, Ellen, "A Conglomerate That Works," Forbes, November 28,1988, p.52."Stearns Associates with PCA," St. Cloud Times, September 29, 1961.Stelling, Linda, "Stearns Manufacturing Helps Make-a-Wish," www.paynesvillearea.com/NewsHeadlinesArticles/archives11/18/98StearnsManufact."Windstorm in St. Cloud Brings Damage Reports," St. Cloud Times, June, 23, 1950, p. 1.

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