Mouse Leads Global Parade to Company's Niche in Shelving

By SCOTT DOGGETT and ANNETTE HADDAD

Feb. 21, 2000 12 AM PT

SPECIAL TO THE TIMES

When it rains, it pours. Just ask Robert Frackelton, vice president of marketing for Reeve Store Equipment Co., a family-owned company that has been making shelving for stores since the 1920s.

Until three years ago, the Pico Rivera company confined its sales to the U.S. and Canada. Since then, it has exported store fixtures to Argentina, Peru, Poland, Indonesia, Guam, China, Chile, Canada and France. Retailers in Kuwait and Saudi Arabia are knocking.

You might say Reeve’s sudden presence in the global market began with a ride on the back of a mouse, albeit the world’s shrewdest mouse.

Reeve supplies shelves for the Disney Stores. In 1997, Walt Disney Co. began opening stores in Eastern Europe and asked Reeve to supply the interior hardware for those locations. In countries where the selection of shelving had changed little since the rise of the Berlin Wall, retailers took to Reeve’s high-quality steel shelves and custom-made racks like Levi’s. Inquiries flowed.

“A lightbulb went off in my head,” Frackelton said. “ ‘There’s opportunity here that we’re not tapping. We’ve been blinded much too much by the market just in North America.’ ”

At a time when seemingly every business is going high-tech, Frackelton is growing his business just as his great-grandfather, Hurum E. Reeve, did more than 70 years ago: he’s giving brick-and-mortar businesses what they need most--sturdy display shelving.

The Reeve patriarch moved from Illinois to California during the early 20th century. He initially found work as a carpenter on a sprawling ranch owned by the Torrance family, after whom the city is now named.

In 1920, Reeve decided to open a hardware store in what would become the city of Torrance. He soon realized there were no locally made shelves he could purchase to display his hardware. Shelving was available from Chicago, but transporting it to California by train back then was a costly and complicated affair. So, Reeve made his own shelves.

By the 1930s, California was growing rapidly. As its population grew, so did the number of new businesses. Retailers who wandered into Reeve’s hardware store often inquired about his sturdy shelves. Before long, he was making store fixtures full-time--first at a building in downtown Los Angeles, then in an old packing plant he’d bought from Sunkist, the orange cooperative. The plant was in the Los Angeles neighborhood of Rivera, which has since become the city of Pico Rivera.

Just as his great-grandfather adapted to the demands of the burgeoning local market, Frackelton wanted to meet the demand for high-quality shelving coming from overseas. But unsure how to proceed, he called Darlene Peysar, who manages Pico Rivera’s Trade Assistance Center.

After listening to Frackelton recall his Disney Store experience, Peysar arranged for him to meet with Vance Baugham, director of trade development for the World Trade Center Assn. of Los Angeles-Long Beach. Pico Rivera contracts with the private center for $10,000 a year specifically to help local businesses go global, she said.

As he has done on many occasions with other new-to-export businesses, Baugham met with Frackelton and obtained from him a profile of foreign companies that might want to buy shelving from Reeve Store Equipment. Then, using a computerized database, staff at the World Trade Center put together a list of high-end retailers for Reeve.

“We have a massive electronic database,” Baugham said. “If I want to get a list of retail stores in different parts of the world and who their buyers are by product group, I can produce those.”

Among the prospective customers Baugham found for Reeve was Almacenes Paris, an upscale department-store chain with outlets in Peru and Argentina.

Taking directions from Baugham, Frackelton sent the South American retailer information about Reeve, a merchandise catalog and an invitation to visit the company’s plant, which now occupies 170,000 square feet in six modern buildings (the former Sunkist building is long gone).

Following an exchange of e-mails and faxes, the chain purchased $600,000 worth of store fixtures last year, or slightly more than 3% of Reeve’s $19 million in annual sales. Additionally, Reeve’s profit margin on the deal was “a good 25%,” significantly more than its domestic profit margin, said Frackelton. A typical Reeve shelf bracket costs $1.

Almacenes Paris is expanding into other South American countries, and Frackelton expects Reeve Store Equipment to enter those countries through the chain. He’s also sending company information to other potential customers in Latin America using the list compiled by the World Trade Center Assn.

While the appearance of Reeve shelves in South America, Europe and Asia has itself been a key to attracting new business, the manufacturer of the brick-and-mortar retailing essential has gotten a boost by going online and becoming a business-to-business Web site.

“My initial reason for going online was because everyone else was,” said Frackelton, who runs the company with his father, president and CEO John Frackelton. “I figured we had to have a ‘dot-com.’ My younger sister had just gotten her master’s degree and learned to do Web site programming, and offered to do it. I said, ‘Yeah, sure.’ ”

When Reeve’s Web pages went up, Frackelton was “overwhelmed” by the response--about 50 hits a day for the first few months. That number has since plateaued to about 15 hits a day.

The Internet is a great marketing tool. But for Reeve, it also has been a handy locater: When stores in the U.S. fail, their shelving often is resold in Mexico. All Reeve equipment bears the company’s name. Before Reeve had a Web site, many retailers didn’t know how to contact the firm when they wanted to buy fixtures. Today, they can find Reeve on the Internet.

In the three years since joining Disney overseas, Reeve Store Equipment sales have grown 58%, from $12 million to $19 million, and it is expected to grow another 17% by the end of this year, mostly from exports. Staff has grown too, from 140 employees in 1997 to 200 today.

“By the end of next year, we will have doubled our sales in five years, which is an achievement that makes us proud given that we’re not a young, hot start-up. We’re an old manufacturing company,” Frackelton said. “The Disney thing opened our eyes.”

The Times is interested in hearing about your experiences as a business traveler and as someone doing business in the international marketplace. Contact us at global.savvy@latimes.com.

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Contact Information

Here’s how to reach the World Trade Center Assn. of Los Angeles-Long Beach.

Address: One World Trade Center, Suite 295, Long Beach, CA 90831.

Phones:

(213) 680-1888 in Los Angeles

(562) 495-7070 in Long Beach

(818) 997-6187 in San Fernando Valley

(562) 801-4384 in Pico Rivera

(818) 548-3155 in Glendale

(714) 647-5492 in Orange County

(909) 680-1774 in Riverside