Two Sides of the Door : A Partnership Made in Heaven Falls Victim to a Conflict in Styles
Jack LoCicero, young entrepreneur, wanted money. Joseph De Mieri, veteran financial executive, wanted a company to run. When a business broker brought them together in the manufacturing bay of LoCicero’s door company in the summer of 1985, both figured they heard opportunity knocking.
De Mieri, 46, is a former executive at conglomerates on both coasts including a stint at Motown Records. He thought California Architectural Millworks’ oak-framed sliding glass doors were art on rollers--a natural for the booming home-remodeling market. And LoCicero--31, a former contractor who had built California Architectural Millworks from a business in his garage to $1.7 million in annual sales--needed someone else’s business skills to keep the company growing.
Nineteen months later the Pacoima company is doing great, but the business marriage has suffered a divorce.
De Mieri bought 80% of LoCicero’s company for about $250,000, LoCicero said, plus other compensation, and LoCicero stayed on as vice president. Since the deal, the company’s sales have more than doubled, and De Mieri said he expects the company to earn $360,000 pretax profit this year on a record $4.5-million revenue. And, knock on wood, he hopes to take California Architectural Millworks public in two years.
LoCicero, meanwhile, has quit the business, and his attorneys are suggesting that he sue to get his old company back.
Instead, LoCicero has started another company, Premier Installation in Agoura Hills, to install the doors he invented and those of the competition.
“I don’t want to go back into manufacturing,” he said. “It’s too capital-intensive. It’s for the birds.”
Started in Garage
He didn’t feel that way back in 1981, when he started making windows in his garage. A general contractor since age 17, he made custom windows better and faster than other local manufacturers, he said, and in a month moved into a 1,000-square-foot industrial bay in Chatsworth.
The company grew quickly, although cash flow was a constant problem. “Sometimes popcorn was all we had for breakfast and lunch, and then we had a decent meal at night,” LoCicero said.
Seven months later, an Oxnard contractor asked LoCicero to make him a wood-framed sliding-glass door--a slider that would have the look of French doors, with up to 20 panes of beveled glass and brass hardware. Homeowners were tired of the cheap-looking aluminum sliders that are standard issue in tract homes, the contractor said.
After some experimenting, in 1981 LoCicero developed a handsome wood-framed sliding door that a handy homeowner could slip into the space occupied by an aluminum door--and a market opened up.
“They were not popular at first, but after they exposed it a little, it really took off,” said Rosella Duran, manager of Valley Sash and Door, a home-remodeling retailer in Van Nuys. The doors cost upwards of $925 retail.
By 1985 LoCicero was selling 1,200 sliding doors a year under the brand name California Classics, but the company was only marginally profitable, De Mieri said.
“I thought, ‘If only I could find someone who had money or could get money and knew the ropes of accounting,” LoCicero said. “I would finally be able to concentrate on increasing sales and engineering.”’
Then one summer afternoon, De Mieri appeared in his shop with a business broker.
“De Mieri’s question was: ‘What would you do with an unlimited amount of money?’ ” LoCicero recalled. “I thought, ‘Wow, this is someone who could take me from little to big. And 20% of a piece of large pie was better than 100% of a smaller pie.”
De Mieri, a Brooklyn-born accountant, had been controller at the $8-billion City Investing Corp. in New York for 15 years and then put in two years as assistant to the chairman of Motown Industries in Los Angeles. But running a smaller company seemed more enticing.
After buying 80% of the business, De Mieri took the title of president, and LoCicero became vice president for marketing and sales.
Frequent Disagreements
By LoCicero’s account, they disagreed on almost everything. “We had a lot of fights, about one a week,” LoCicero said. “What can you do when you don’t have majority stock? You sit back and watch them run it.”
The one thing both wanted was more growth. So the company moved into a bigger manufacturing site in Pacoima, and last year closed down an unprofitable retail outlet as the company took a $116,000 pretax loss on $2.9 million in sales, De Mieri said.
LoCicero complained that De Mieri brought in too many front-office people. “These guys tried to run it as if it were a $30-million company,” LoCicero said.
De Mieri said the added staff was needed to cope with the chaos left over from LoCicero’s days in charge.
“When I got in there, financial statements had not been published in four months. There was no control,” De Mieri said. “The backlog was totally chaotic. We didn’t know what we had, what we had billed, and when we had to bill. What I put in was a financial officer. This wasn’t a company as small as the local candy store anymore.”
LoCicero didn’t like the changes, and last December he walked out. “I could’ve kept my mouth shut and made a lot of money this year,” he said. “But I’m the kind of person who enjoys peace of mind more.”
LoCicero declined to elaborate on negotiations his lawyers are having with De Mieri over the terms of his departure.
The business breakup did not surprise Jerry Kanaly, the company’s auditor. “Some entrepreneurs can only take an idea, a company so far,” said Kanaly, a partner at the accounting firm of Peat Marwick Main & Co. “Then LoCicero found a guy in De Mieri who can take it further.”
The doors have continued to sell well because baby boomers in the market to buy a first home often buy older homes that need repairs. Thus, the remodeling business has remained strong.
Broadening Line
Although 80% of the company’s sales come from sliding doors, De Mieri said, the company is broadening its product line by making bay windows and has begun distributing a line of $1,000 teak or mahogany interior doors from Italy.
If things continue going well, De Mieri plans to take the company public to raise enough cash to expand outside the California and Arizona markets.
But LoCicero won’t receive any of the stock benefits because he sold his remaining 20% of the company to one of his former salesmen early this year for an undisclosed amount.
He finds it hard to remain emotionally detached about the breakup, describing it as a divorce in which “you lose your kids and have them hurt and submitted to a step-parent.”
Anyway, LoCicero figures the odds of California Architectural Millworks going public are “the same as a summer snowfall in the Valley,” and fears that De Mieri is about to make the same mistake he made--growing too fast.
As for De Mieri, is he sorry to see LoCicero go?
“Let’s just say I see him as an extremely talented man who had a vision,” De Mieri said. “I would’ve liked to see my vision and his vision culminate as one. And it just wasn’t to be.”
