B.J. Alan Co., Inc. - Company Profile, Information, Business Description, History, Background Information on B.J. Alan Co., Inc.

555 Martin Luther King, Jr. Boulevard
Youngstown, Ohio 44502-1102

Company Perspectives:

The Phantom Fireworks/B.J. Alan corporate philosophy is simple: integrity, quality products and hard work will pay off in satisfied customers. Because Phantom Fireworks/B.J. Alan is a family business, we believe in shared obligations--to customers, to vendors, and to employees--responsibilities that surpass expectations. Phantom Fireworks makes every effort to insure that each Phantom customer enjoys his or her Phantom Fireworks experience and that the products are used in a careful and safe manner in the celebration of our nation's heritage or whatever holiday is made that much more special with Phantom Fireworks.

History of B.J. Alan Co., Inc.

B.J. Alan Co., Inc. is the second largest importer and wholesaler of consumer fireworks in the country, operating 41 permanent retail outlets in 12 states and more than 1,000 temporary sales venues under the Phantom Fireworks banner. The company also owns Diamond Sparkler Manufacturing Co. Inc., which is the last sparkler manufacturing plant in the United States and produces up to 800,000 sparklers a day. The two companies, which are located on a 17-acre complex in the Mahoning Valley of Ohio, sell their goods under the tradenames Phantom, Wolfpack, Grucci Collection, and Silver Salute. In addition to its own private label products, B.J. Alan also sells Black Cat, Longhorn, Brothers, Zenith, and other fireworks.

1977-90: Developing a Business in Pyrotechnics

Beginning in the late 1980s, the pyrotechnics industry began to grow steadily. In 1985, B.J. Alan acquired the assets of Chicago-based Acme, the last sparkler manufacturing company in the United States, which had been started in 1922 by the Callen family. B.J. Alan moved Acme to Youngstown, Ohio, and renamed it Diamond Sparkler Manufacturing Co., Inc. In its heyday, Acme had employed 150 workers and produced as many as 1.5 million sparklers a day. However, by the time B.J. Alan purchased the company, it struggled each year to make a profit. This was due at least in part to the import of sparklers from China and the illegal dumping of foreign-made sparklers in the United States. Zoldan's rationale for buying the sparkler manufacturer, according to company literature, was that he couldn't "envision something as American as sparklers, with its association with the [Fourth] of July, not being made in this country."

The 1990s: Growth Parallels Increased Popularity of Fireworks

In 1990, a surge in fireworks' popularity coincided with an increased interest in special pyrotechnic effects and "close proximity" fireworks. Phantom Fireworks entered the California market in 1991 under the banner of Big Bear Fireworks, Inc. By 1996, B.J. Alan sold its products to distributors in 15 states, at 30 stores, and from more than 500 roadside stands. According to Zoldan, "The fireworks industry has witnessed a great increase in sales over the years. This increase is expressed through the many family celebrations that take place over the [Fourth of July] holiday and the additional fireworks displays that take place throughout the country. There is enthusiasm for celebrating all sorts of occasions with fireworks. ..."

The fireworks consumption rate in the United States climbed steadily throughout the 1990s, increasing from about 68 million pounds of fireworks purchased in 1990 to 153 million pounds in 2000. Consumption continued to grow into the early years of the next century, with 161 million pounds of fireworks purchased in 2001, and more than 190 million pounds in 2002.

Diamond Sparkler did not fare as well as its sister company throughout the 1990s. It lost money--$1.4 million between the years 1995 and 2001--largely as a result of keeping its prices low enough to match illegal Chinese imports. But after the United States International Trade Commission found that the pyrotechnics industry was being harmed by "dumping," Congress passed a law in 2001 requiring that the government turn over the tariffs it imposed on Chinese sparklers. This resulted in a $1.6 million award for Diamond. By 2002-03, sales and production at Diamond's Youngstown facilities were up more than 30 percent, fueled by the renewed spirit of patriotism in evidence across the United States.

As the purchase of fireworks increased, so, too, did concern over the legality of their sale and the safety of their use. In 1991, the attorney general of Pennsylvania ordered B.J. Alan to issue a warning notifying potential purchasers of the illegality of fireworks in that state when it advertised its wares for sale. "Fireworks aren't toys," Attorney General Preate announced in a statement. "They are explosive devices that injure an estimated 10,000 Americans each year. ..." In Nevada, Assemblywoman Chowning pushed for legislation that would ban the sale of all but "Safe and Sane" fireworks statewide. Three years later, the New York state attorney general sued B.J. Alan for marketing fireworks illegally in that state by selling them to people who did not have a permit. In New York State, only localities, fair associations, and organizations authorized to put on a display were allowed to purchase fireworks.

In 1997, ten states still outlawed fireworks of any kind and 39 severely restricted their use. Only Hawaii had no state law regarding fireworks, although it did have local fireworks restrictions. Purchasers in B.J. Alan's home state of Ohio had to fill out a Fireworks Purchaser's Form from the State Fire Marshal, which granted them permission to buy fireworks, but required that they remove them from the state within 48 hours.

New Millennium: Increased Emphasis on Safety Accompanying Rise in Pyrotechnics Use

Debate continued to surround the sale and use of fireworks into the new millennium. Proponents of consumers' right to purchase pyrotechnics cited favorable safety statistics. According to the Consumer Products Safety Commission in Maryland in 2003, in 1993 there were a reported 12,500 fireworks-related injuries, while by 2003, that number had decreased to 9,300. During the same period of time, fireworks sales had increased from 87 million pounds of imported pyrotechnics in 1993 to 220 million pounds in 2003.

Legislators in Connecticut, reasoning that it was better to set safety standards than to outlaw the explosives that consumers would buy even if illegal, legalized the sale of non-aerial, non-exploding sparklers containing up to 3.5 ounces of pyrotechnic mixture to people 16 and older in 2000. In 2002, The National Council on Fireworks Safety, an industry-sponsored organization, set standards for the amount of explosive material in fireworks and mandated that fuses burn for at least three and no more than nine seconds.

B.J. Alan responded by emphasizing the safe use of fireworks. In 2001, it launched a company web site, Fireworks.com, which included an extensive safety section with a series of general "dos and don'ts" along with a step-by-step guide to safe fireworks use. The award-winning site also featured the company's merchandise catalog and a full virtual fireworks show that could be set for viewing over major cities throughout the United States.

The pyrotechnics industry experienced a continued upward trend in sales in 2002, boosted by the increase in number of states that allowed the purchase of consumer grade fireworks. B.J. Alan had its best year ever in 2002, with double-digit sales growth in stores open a year or longer. The company added five new showrooms and 100 seasonal locations to reach a total of around 40 showrooms in 11 states and 1,200 seasonal sales centers in 17 states. It employed 300 workers year round. In 2002, it landed its first national contract with consumer goods supplier Fleming Companies and began selling in Kmart and Rite Aid stores.

In 2003, B.J. Alan opened a new 75,000-square-foot fireworks warehouse in Wheatland, Pennsylvania, which was double the size of its Youngstown warehouse. Sales for 2003 reached 221 million pounds of fireworks. During the peak six weeks leading up to the 4th of July, B.J. Alan did 93 to 95 percent of its approximately $100 million in annual revenue, selling 25 million pounds of fireworks at its 41 stores in 12 states and 1,200 temporary sales locations in 17 states.

Yet turmoil surrounding the sale of fireworks continued. B.J. Alan, like other fireworks distributors, had a history of entering into fundraising alliances with nonprofit organizations that would sell their wares for a share of the profits. In California, in 2003, two stands operated by nonprofits were closed for not having proper permits and for selling B.J. Alan's fireworks to minors. In Pinellas County, Florida, a new county ordinance effectively put fireworks dealers out of business. The new rules required sellers to get a county permit before opening shop and to demand paperwork from buyers assuring use of the explosives for legal purposes, which in Florida meant only agricultural or industrial use.

Seven states banned fireworks by 2004, and federal law banned the retail sale of large reloadable mortar shells, cherry bombs, aerial bombs, M-80 salutes, and firecrackers with more than two grains of powder. Yet the popularity of fireworks throughout the United States showed no signs of abating--43 states permitted some level of fireworks sales--and B.J. Alan remained optimistic about its future and the future of its industry. With an office and representatives in Hunan, China, B.J. Alan was well prepared to meet increased sales with ever increasing firepower.

Principal Competitors: American Promotional Events; Fireworks Over America; TNT Fireworks.


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